Rural Commuter Rail

[Charles5]

Joseph,

Just out of curiousity. I'm not asking you to reveal any secrets that may jeopardize your business interests here, but would you be willing to indicate if you have had any significant or serious interest from entities looking to establish a station? I don't need a number, name, or quantity, just curious about whether people are willing to put any money on the table (and I'm not referring to conducting a study). If so, would those entities be looking at stations in the urban centre, the suburbs, or out in the semi-rural areas?

[roger1818]

I suspect the stations won't be where people on this forum are expecting. For example, the Barrhaven station would likely be near where the tracks cross McKenna Casey Dr. The developer could buy all of the land surrounding it to develop and would apply a restrictive covenant on the properties that the owner must pay the fee to the station when the property is sold.

[Charles5]

Roger,

I concur. In my previous analysis I indicated that physically there are only two spots to locate a station in Barrhaven, that being in the NE (the VIA station) or in the SW (McKenna Casey). The challenge in the McKenna Casey location from a pure business perspective is how to generate any traffic at the station. Few folks on a train from outside of the city limits would get off there in my opinion, and most folks in Barrhaven proper would be better suited to use OC Transpo to go to the city core. Without people getting on and off trains, the value of the station diminishes and subsequently the increase in property value near the station would be minimal.

On top of that, if you look at the property density there it is primarily single family homes and an industrial park. The density would likely not generate the revenue even if you could convince folks to 'voluntarily' give money to the rail company.

I'm no lawyer, but I don't believe a restrictive covenant would apply in these circumstances as it deals with what a property owner can do with their own property. I'd be interested in getting some legal input as to the potential for a condo corporation imposing fees like this on the individual unit owners within the complex.

[roger1818]

Charles,

You are assuming that the intent Moose is to serve the general population. It isn't. It is to serve those who buy properties in their special markets. I agree there currently isn't sufficient density in that area, but it is up to the developer to change that. As for affecting property value, as long as the people in the special neighbourhood can use the train to get into town, it will help their property value. Not serving existing neighbourhoods well is a feature, as only the new properties will benefit from the station, boosting their value, not the existing properties (a scarce commodity has more value than a common one)

As for the restrictive covenant, I am not a lawyer either, but I suspect if a restrictive covenant doesn't apply, likely some other mechanism can be used (what mechanism is used to apply condo fees?). Even if it wouldn't hold up in court, the station owner likely has deeper pockets than the home owner to fight the legal battle.

[AndyMEng]

Originally Posted by roger1818

Charles,

You are assuming that the intent Moose is to serve the general population. It isn't. It is to serve those who buy properties in their special markets. I agree there currently isn't sufficient density in that area, but it is up to the developer to change that. As for affecting property value, as long as the people in the special neighbourhood can use the train to get into town, it will help their property value. Not serving existing neighbourhoods well is a feature, as only the new properties will benefit from the station, boosting their value, not the existing properties (a scarce commodity has more value than a common one)

As for the restrictive covenant, I am not a lawyer either, but I suspect if a restrictive covenant doesn't apply, likely some other mechanism can be used (what mechanism is used to apply condo fees?). Even if it wouldn't hold up in court, the station owner likely has deeper pockets than the home owner to fight the legal battle.

Bringing me back to the Scandinavian model, specifically Stockholm. Inter-city light rail transit is operated for-profit by a private enterprise, with no tax monies going to it. They operate on Stockholm's main lines accessing the centre of the city. Tickets can be purchased to travel on either the inner-city light rail/subway AND/OR the SJ lines (called a TiM pass). Monthly passes (according to Wikipedia) are 2000KR for an Uppsala-Stockholm pass (which is a crazy expensive pass).

I used one of these trains, it was about $5 for one-way to a suburb. It was awesome, the stations approaching 'downtown' split the lines into two platforms with four running lines. You could transfer from your SJ line to the metro line seamlessly. The transfers worked in the approach to downtown, as the SJ line terminates at points approaching the city. Downtown is wild for transit: tunnels, rivers, roads, and a crazy network of rail tunnels and bridges.

https://en.wikipedia.org/wiki/Public...t_in_Stockholm

When (if) Ottawa has inter-city lines, regional transit should be organized along with Via, Moose, and OC Transpo to avoid doubling up on infrastructure.

PLUS, the existing lines to Arnprior and to Carleton Place/Smith's Falls should be utilized, with a terminus/transfer at Bayshore Mall. IMO these lines could be used with our current trains no problem. A good first start for regional rail transit.

I love the idea of MOOSE, but I just can't see that particular business model working. Nobody's going to voluntarily pay, you'll get intensification...just outside of the perimeter. Taxes, high user fees, easier routes on existing lines with simple platforms/infrequent service using OC Transpo trains are the only ways that this would work...

[Joseph Potvin]

Originally Posted by roger1818

Charles, You are assuming that the intent Moose is to serve the general population. It isn't. It is to serve those who buy properties in their special markets. I agree there currently isn't sufficient density in that area, but it is up to the developer to change that. As for affecting property value, as long as the people in the special neighbourhood can use the train to get into town, it will help their property value. Not serving existing neighbourhoods well is a feature, as only the new properties will benefit from the station, boosting their value, not the existing properties (a scarce commodity has more value than a common one)

Bingo. Roger1818 wins the beer.

Originally Posted by roger1818

As for the restrictive covenant, I am not a lawyer either, but I suspect if a restrictive covenant doesn't apply, likely some other mechanism can be used (what mechanism is used to apply condo fees?). Even if it wouldn't hold up in court, the station owner likely has deeper pockets than the home owner to fight the legal battle.

No restrictive covenants -- they tend to degrade re-sale value. I wonder if anyone on this blog thread has looked up the "common element commercial freehold condominium model". There's the purely contract-based variant too, under various names. Nelligan O-Brien Paine refers to these as "Joint Use and Management Agreements" (JUMAs).
http://nelligan.ca/article/whats-a-juma/
http://www.changelabsolutions.org/pu...-use-agreement

BTW, some in this thread insist that diverse people can't cooperate for tangible mutual benefit. Their dismissive tone sounds very familiar to me. It's what the naysayers used to say about free/libre/open source software back around 2000-2010. Then the International Space Station, Google/Yahoo/Amazon/eBay/et.al., the Large Hadron Collider, the Nuclear Test Ban monitoring seismographs buried in the ground, and most of the smartphones and tablets of the world, were running free/libre/open core OS's. The naysayers still said nobody could earn any serious revenue that way, then RedHat earned its first billion in annual revenue in 2012, and reached more than $2B annually in 2016. Who in their right mind would pay RedHat money when you could just download CentOS? Ah, but that' software, the naysayer will counter, nuthn' like trains. Really? They're both mission-critical networks. Whether bytes or butts, they have to get delivered on-time and intact, and certainly in both, lives depend on multi-layered systems resilience (e.g. both MASAS and Search & Rescue Canada run on free/libre/open stacks).

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium Moose (Mobilité Outaouais-Ottawa: Systèmes & Enterprises) | www.onyvamoose.com

[Joseph Potvin]

Originally Posted by Charles5

Joseph, Just out of curiousity. I'm not asking you to reveal any secrets that may jeopardize your business interests here, but would you be willing to indicate if you have had any significant or serious interest from entities looking to establish a station? I don't need a number, name, or quantity, just curious about whether people are willing to put any money on the table (and I'm not referring to conducting a study). If so, would those entities be looking at stations in the urban centre, the suburbs, or out in the semi-rural areas?

Yes. Several, including urban, suburban and semi-rural, both private and public sector. Some are quite surprising, even to us.

MOOSE will only open the formal "request for proposals" once we've completed the design-feasibility-cost-revenue work, so that our published criteria, and our internal financial criteria are further developed.

For some reason, the participants in this blog thread heavily emphasize residential, mostly implying single family homes. I'm surprised that the commercial (from retail to technology park) market segments haven't received much comment here.

Joseph Potvin
Director General | Directeur général
Moose Consortium (Mobility Ottawa-Outaouais: Systems & Enterprises) | www.letsgomoose.com
Consortium

[Truenorth00]

I guess this confirms that Moose will be a vector for sprawl. It's hilarious that the City didn't want to take the LRT outside the greenbelt at first, lest sprawl get promoted. And now we have a private operator proposing to hijack a city owned rail corridor to get sprawl going into overdrive.

Andy,

The Stockholm model is irrelevant to what Moose is proposing. In Stockholm you have a private sector rail operator charging fares and operating the system. Moose says they can impose a voluntary tax that will generate them enough revenue to avoid charging fares, have cafes onboard the trains and offer free daycare at the stations. I'm not even making any of this up. Read their website.

If regional transit is to be delivered, one would hope the primary purpose is to serve the interests and needs of area residents, not to cater to developers' whims above all else.

[Truenorth00]

Originally Posted by Charles5

Joseph,

Just out of curiousity. I'm not asking you to reveal any secrets that may jeopardize your business interests here, but would you be willing to indicate if you have had any significant or serious interest from entities looking to establish a station? I don't need a number, name, or quantity, just curious about whether people are willing to put any money on the table (and I'm not referring to conducting a study). If so, would those entities be looking at stations in the urban centre, the suburbs, or out in the semi-rural areas?

You don't expect an honest answer do you?

It's not like he's going to come on and say, "The mayor told me to stuff it."

They've got the backing of a Chinese investment firm. That's all I've seen publicly.

I sincerely doubt they have any interest from the province or the City beyond, "Yeah we'll read your proposal." If there was the slightest bit of interest from anyone important beyond that, we'd have already had some news about how this was going to be incorporated into Stage 2.

Oh. And Joseph, don't throw around examples you aren't personally knowledgeable about. I've worked on major SAR procurement. The parts that matter to saving lives don't work on FOSS, from the software used in flight planning, to the software used by the sensor suites onboard SAR aircraft to system software for the aircraft's flight controls. None of it is FOSS. At best, some of it is built to common standards, those being NATO/US MILSTDs. And even that's not true for most software that is mission essential in that business.

[acottawa]

Originally Posted by AndyMEng

Bringing me back to the Scandinavian model, specifically Stockholm. Inter-city light rail transit is operated for-profit by a private enterprise, with no tax monies going to it. They operate on Stockholm's main lines accessing the centre of the city. Tickets can be purchased to travel on either the inner-city light rail/subway AND/OR the SJ lines (called a TiM pass). Monthly passes (according to Wikipedia) are 2000KR for an Uppsala-Stockholm pass (which is a crazy expensive pass).

I used one of these trains, it was about $5 for one-way to a suburb. It was awesome, the stations approaching 'downtown' split the lines into two platforms with four running lines. You could transfer from your SJ line to the metro line seamlessly. The transfers worked in the approach to downtown, as the SJ line terminates at points approaching the city. Downtown is wild for transit: tunnels, rivers, roads, and a crazy network of rail tunnels and bridges.

Stockholm is an operating contract: the local transportation authority pays MTR to operate trains. Ottawa has a similar arrangement for the LRT, it is in no way similar to the model being proposed by Moose.

[acottawa]

Originally Posted by Joseph Potvin

For some reason, the participants in this blog thread heavily emphasize residential, mostly implying single family homes. I'm surprised that the commercial (from retail to technology park) market segments haven't received much comment here.

Because that is who wants to live in rural and exurban areas you're trying to serve. You have yet explain an incentive for a business or someone seeking higher density living to want to be out there (and pay moose for the privilege).

[AndyMEng]

Originally Posted by acottawa

Stockholm is an operating contract: the local transportation authority pays MTR to operate trains. Ottawa has a similar arrangement for the LRT, it is in no way similar to the model being proposed by Moose.

I'm just trying to brainstorm opportunities for MOOSE to work with, not trying to equate their present business model to Scandinavia, where train networks are everything.

[roger1818]

Originally Posted by acottawa

Because that is who wants to live in rural and exurban areas you're trying to serve. You have yet explain an incentive for a business or someone seeking higher density living to want to be out there (and pay moose for the privilege).

It is possible that commercial market segments would support certain stations. For example, I'm sure the loss of the steam train resulted in a loss of business for Wakefield businesses, so it might be worth their while to sponsor a station. It is also possible the Kanata North Business Association would like to support a Kanata North station (their mandate is to "promote the area as Canada's largest tech park"). There may be other examples.

Having said that, I still believe this venture is a long shot.

[Charles5]

Joseph,

I do hope that if you do get to the RFP stage that a better perspective on this vision of yours is provided. As an investor, I understand well the concept of risk and reward. In everything that MOOSE seems to publish the risk is minimized or even trivialized. I paraphrase:

There is no risk to taxpayers as this is all privately funded.
The commuter can pay what they want, no risk there.
Even investors don't seem to have any risk. They only share in the profits as land values rise.

I do hope that when it actually comes down to this affecting folks financially that there is an open and transparent explanation of where the money is going and what the potential risks are. I also hope that the financial risks are not simply passed down from large corporations to tenants, members, etc through increased fees or rents.

[acottawa]

Originally Posted by Charles5

Even investors don't seem to have any risk. They only share in the profits as land values rise.

Somebody has to pay all of the capital costs in advance and pay operating costs until property values rise.

[Charles5]

That's what I'm trying to get at. I was paraphrasing MOOSE with those words, that isn't my position.

There is significant risk involved here, someone has to come up with the upfront capital with no assurances of return. Operating costs need to be met through property value increase, higher rents, etc yet there are no assurances that the market can bear this or that housing prices will continue to rise (whether or not you are in proximity to a station. Yet MOOSE seems to ignore all the risk in anything it publishes in an attempt to generate interest and promote itself.

[Truenorth00]

You mean somebody has to pay for the "free" daycare at the station and the cafe bars being planned on the trains? Say it ain't so.

[roger1818]

Originally Posted by Charles5

.There is significant risk involved here, someone has to come up with the upfront capital with no assurances of return. Operating costs need to be met through property value increase, higher rents, etc yet there are no assurances that the market can bear this or that housing prices will continue to rise (whether or not you are in proximity to a station. Yet MOOSE seems to ignore all the risk in anything it publishes in an attempt to generate interest and promote itself.

I have delt with enoght startup CEOs to know how they tick and Joseph isn't much different. They are great salesmen and spin masters, looking at only the positives and ignoring the negatives (there is an excuse for everything). They also insulate themselves from the facts and surround themselves with people who tell them what they want to hear so they can truithfully deny knowledge of the extent of any issues that arise (I knew someone who got in trouble for reporting bad news directly to the CEO of a startup).

VCs with any experience know this and will do their due diligence to get to the truth. They know there is risk, regardless of what the CRO says. However, every investor has to a first investment and it likely will be a bad one. Even experienced VCs bat less than 500.

[Charles5]

Joseph,

Perhaps you can clarify something for me. I've been reviewing your Business Model and it seems to differ somewhat from what I've interpreted from your comments on the site. Specifically it goes back to the Station Owners. I got the impression from your earlier statements that Station Owners were the ones collecting the revenue from the property owners and using that to operate the station as well as contributing to the operations of the rail line. However, the graphic on your website suggests otherwise. In the image it appears that all revenue from properties goes to the consortium and none to the station owner. In fact, the station owner also has to pay fees to the consortiun in exchange for the "business opportunity".

Can you clarify, is the graphic the way things are expected to transpire, or do station owners get to take a share of the revenue stream from increased property values?

Image can be found at Letsgomoose on the following page: https://www.letsgomoose.ca/business-model/

[Charles5]

is there any way to post an image to this forum without it being a link to a URL? I've created a graphic of my own (jpg) that I was hoping to include with some comments.