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Lone Star Rail asks Austin for new commitments

Monday, December 1, 2014 by Tyler Whitson

Lone Star Rail District representatives have revealed new details about a proposed passenger rail corridor between Georgetown and South San Antonio — with several stops in Austin — and are asking the city to amend an interlocal agreement that City Council approved last December.

The proposed LSTAR commuter service would utilize the current Union Pacific freight line corridor that runs through downtown Austin. Lone Star plans to relocate freight operations so that it can run up to 32 trains per day, seven days a week, and feature a 75-minute express service from downtown Austin to downtown San Antonio.

Lone Star representatives told the Council Audit and Finance Committee last Monday that they need the city to extend certain deadlines, set new financial participation levels for local stations, grant development fee waivers, sponsor any needed zoning changes and allow Lone Star to temporarily use the city right of way for construction, if necessary.

Lone Star consultant (and former Council Member) Betty Dunkerley told the Monitor that the rail district needs to demonstrate that it has local support for the project’s future operations and maintenance costs before it can request capital funding from the state and federal governments.

“What we’re trying to get (local entities) to do,” Dunkerley said, “is give us that commitment on future operations and management so that we can go to the feds and state and say, ‘Mother, may I?’”

Dunkerley said that she hopes Council will approve the amendments at its final meeting Dec. 11, adding that Lone Star has been working with the current Council on the agreement for the past three years.

Lone Star’s most significant request is that the city commit 50 percent of the property tax growth from the areas within a half-mile of the new stations for rail operations and maintenance, using a tax increment financing agreement that the city set up in last year’s contract. Council set the participation requirement in that contract at zero percent, but not to exceed 50 percent.

If Council amends the agreement, the city would theoretically set aside half of the tax revenue from nearby growth above a predetermined baseline. The city would not be obligated to release the funds until Lone Star reaches certain performance measures that demonstrate the project’s feasibility. Otherwise, the city would retain the funds.

Council Member Laura Morrison expressed some skepticism about the new 50 percent participation request. “One of the things that is most striking to me is that the reports and analyses that we have suggest that 50 percent is too much for our finances,” she said, seeking clarification on how to reconcile the conflicting information.

Chief Financial Officer Elaine Hart pointed out that market studies have only supported a 36 percent participation rate from predicted rail-induced growth.

Lone Star consultant Joe Lessard said that he believes the request for additional growth participation — which Morrison pointed out would essentially come from the city’s general fund — is necessary for the rail to provide additional benefits.

“If we’re going to anchor the downtown, if we’re going to provide enough service that there is economic development around the stations, if we’re going to have an impact on affordability, we believe those items justify the additional increment,” Lessard said.

Morrison requested more information about exactly how much the additional request would cut into tax revenue from regular growth. “We, as policymakers, have to think about what the impact is on our other services and other areas of town,” Morrison said.

Dunkerley said the requested amendments are similar to what her organization secured with San Marcos and hopes to secure from other nearby participating cities and entities, including Kyle and Travis and Hays counties. She added that San Marcos has pledged support above and beyond 50 percent to ensure it meets the minimum requirements.

Kyle has a contract pending its council’s approval by January, and Hays and Travis counties don’t currently have agreements.

Dunkerley said that these entities are waiting to see what Austin chooses to do before moving forward.

Lone Star is also asking the city to extend deadlines written into last year’s contract. This would move the original deadline for Lone Star to sign funding agreements with “key Central Texas local governments” from January 2016 to May 2017, and push the requirement that Lone Star secure capital funding and a relocation agreement with Union Pacific from January 2020 to January 2021.

Lone Star also expects to secure interlocal agreements with Austin Community College and the cities of San Antonio, New Braunfels, Buda, Round Rock and Georgetown in 2015.

Lone Star Rail Manager Joe Black said there are currently seven stations planned in Austin.

From north to south, they are adjacent to the new Apple campus on Parmer Lane, at McNeil Junction where the line crosses the Capital MetroRail Red Line, near the Domain on Braker Lane, on Anderson Lane east of MoPac, on 35th Street near MoPac, on 6th Street and Lamar Boulevard and slightly south of Slaughter Lane.

Lone Star is working with Union Pacific to construct a new freight line far east of the current corridor. It has already initiated an environmental impact study for the new bypass and expects to begin public communication in January.

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