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Allegheny Valley commuter train plan still idles along the tracks

By Michael Aubele, VALLEY NEWS DISPATCH
Sunday, December 25, 2011
Last updated: 10:39 am

While plans to start an Allegheny Valley commuter train move forward, financing obstacles exist. And the developers don't have any assurances they can overcome them.

The rail line from Lower Burrell to Pittsburgh's Strip District will need major government subsidies before it's built and after it's running:

• The private investor planning to finance the commuter rail line will have to provide funds until the federal government dedicates millions in grants to the project.

• Many projects throughout the United States are seeking to tap into the federal program that the developers want to use and there isn't as much money as there are requests.

• Once built, the rail line likely will need millions of dollars in subsidies from the state. There currently is no funding stream for it.

"There are legitimate questions you can't overlook," said Robert Ardolino, the developer pushing to build the line. "But I'm willing to face those questions head-on."

Despite these challenges, Ardolino said he's convinced everything will fall into place so that commuters between Lower Burrell and Pittsburgh will have another travel option within a few years. He has suggested the train line could enter the construction phase in 2013.

Construction funds

Ardolino expects a majority of the government assistance to come via $180 million from the Federal Transit Administration's New Starts program. He said he also expects to garner millions in grants from other federal agencies, such as the Federal Railroad Administration.

While FTA officials are aware of Ardolino's plans, they still haven't received a formal application for a grant. They cautioned that the money available through New Starts is highly sought after and the pot has dwindled.

An official with a Cleveland-based lender, First Service Commercial Loans, said as much as $350 million in private money is available for the project. But, said Russell Oates, a principal with First Service, his firm can't commit any money until the federal funds are in place.

He's hopeful that funding does come through because he believes the rail project is a viable investment.

Operational subsidies

To cover long-term operating costs, the train likely will need to be subsidized -- common for public transportation systems. Ardolino suggested the train would need only a nominal subsidy -- 88 cents per passenger mile, which is less than the national average of $1.42 -- from the state, which already is struggling to pay for existing services and programs.

At the rate Ardolino suggested, the state's subsidy could range from $20 to $23 for a trip from Lower Burrell to Pittsburgh.

The state subsidizes Port Authority of Allegheny County operations, including its light rail -- the T -- in Pittsburgh. An authority spokesman said he couldn't offer a subsidy rate per passenger mile for the T because the state's subsidy for PAT is given in a lump sum. He also suggested the comparison wouldn't be "apples to apples" because the proposed commuter train and light rail, electric cars are two different types of mass transit.

Much of the line for the commuter rail already exists and is used as a freight corridor by Allegheny Valley Railroad.

But running commuter service from Lower Burrell to Pittsburgh would require construction at both ends. It will be challenging to extend the tracks from their current endpoint in the Strip District because the proposal will have to clear environmental, financial and political hurdles.

State Rep. Frank Dermody, D-Oakmont, argued the state could be in a position to subsidize the project, saying, "It would be part of an overhaul of the transportation funding system in the commonwealth.

"I do believe, absolutely, that the commuter rail could be part of that. It would be part of the overall funding."

Dermody attacked Gov. Tom Corbett's administration for failing to immediately address the state's transportation needs, which Dermody described as "a $3 billion problem" of failing infrastructure and mass transit systems.

Corbett has said he won't rush to offer a long-term plan to increase transportation funding. An advisory commission he appointed presented him with a plan in August that it said would increase transportation funding up to $2.7 billion annually within five years. The governor hasn't implemented the recommendations or alternatives.

A spokesman in Corbett's office deferred comment about funding the proposed commuter train to PennDOT.

"Once we had an application or proposal, we would have to weigh that against other requests," PennDOT spokeswoman Erin Waters said. "Without increased revenue for transportation, it would be difficult to envision being able to give capital to a new project."

Wishful thinking?

For more than 20 years, it has been suggested that a commuter train should run between Pittsburgh and the Alle-Kiski Valley. Proponents have said a passenger train would offer benefits that include reducing traffic along Route 28, alleviating parking congestion in Pittsburgh and giving commuters a chance to relax during their trip.

There hasn't been much, if any, vocal opposition to the proposal. But with each passing year of little to no substantive progress, there are those who wonder if the train is nothing more than a pipe dream.

Frank Gamrat, senior research associate with the Allegheny Institute for Public Policy, noted public discussion about the proposed rail appears sporadically but has failed to produce anything beyond a feasibility study.

"It just sort of comes and goes," he said.

Gamrat said a major problem facing the project is a lack of available public money, pointing out that Port Authority of Allegheny County and Westmoreland County Transit don't have money to lend to it, and the same holds true for the state.

He suggested, however, that things could change if the economy rebounds.

"If the economy improves and picks up, this may gain some more traction," he said.

Ardolino and Oates said what makes the project a worthwhile investment is the potential profit from things such as development and advertising rights along the corridor.

"That's where you're going to make your money -- by generating a lot of business," Oates said.

He said his investors like the project because of its public-private nature, which would provide opportunities through tax incentives for development.

Ardolino said the project will create Transit Revitalization Investment Districts -- state-designated areas targeted for development -- along the corridor to provide for a range of development from housing to commercial near train stations through tax incentives.

He said that development and 13 other funding streams, ranging from utility easements and impact fees on development to advertising rights and fares, would support the train, which would be run by a licensed operator such as RailAmerica.

Wendell Cox, a transportation, demographics and urban policy consultant based near St. Louis, said he doesn't expect significant development to follow, simply because it hasn't happened along existing commuter rail corridors.

"There will be advocates who point out this little development or that one," he said. "But you're not going to find anything where a corridor has been transformed. Objectively speaking, there are no models to look at."

Ardolino, meantime, said he feeds off the skepticism.

"This is going to change the way the whole corridor looks," he said. "Your doubt is my motivation."