OWOSSO – The State of Michigan is paying $1.1 million a year to lease 23 passenger rail cars it can't use — and likely won't use for at least another two years — as the taxpayer tab for the troubled project approaches $12 million and counting.
The 1950s and '60s-era double-decker cars are sitting in a rail yard in Owosso, where they are expected to remain for the indefinite future.
The Michigan Department of Transportation started leasing the cars in 2010 for two commuter rail passenger services proposed between Detroit and Ann Arbor, and Howell and Ann Arbor.
But nearly five years later, none of the cars has logged a single commuter passenger mile. There still is no funding and no operator for either proposed commuter service, required environmental studies are not complete, and in the case of the Detroit-Ann Arbor service, even the tracks won't be ready for another two years.
The state of Michigan is paying more than $1 million a year to lease 23 passenger rail cars it that likely won't be in use for another two to three years. (Photo: Mandi Wright Detroit Free Press)
So far, the state has paid the owner of the rail cars, Great Lakes Central Railroad, about $7.6 million to overhaul the cars and another $2.7 million in lease charges. But the per-car lease costs more than doubled in 2013 and 2014 as refurbishments were completed and the cars were certified as rail-worthy. Under the terms of the state's contract with the railroad, MDOT then had to start paying "in-service" rates that total about $3,000 a day, even though the cars are just sitting in a railway maintenance yard in Shiawassee County about 30 miles northeast of Lansing.
MDOT has paid another $1.1 million to its consultant on the rail car project, Pennsylvania-based Quandel.
The roughly $11.4 million spent as of Dec. 31 was mostly paid from Michigan's $300-million Comprehensive Transportation Fund, which is largely raised from fuel taxes and vehicle registration fees and is mainly used to pay for transit and rail.
Under state law, at least 10% of appropriations from the fund must be allocated for intercity passenger services, which includes rail projects. Michael Frezell, a spokesman for MDOT, said the project money came from that allocation and could not have been spent on roads, though it could have been spent on other eligible projects such as a bus service between two Michigan cities or another rail-related project.
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The project costs continue to grow, but are still small change compared with the $1.2 billion Gov. Rick Snyder wants to raise for additional road repairs through a May 5 ballot proposal that would raise the sales tax to 7%. Still, lawmakers expressed strong concerns about the expenditures after learning about them from the Free Press.
"They're betting on something that might not even come to fruition," said Rep. Marilyn Lane, D-Fraser, who is minority vice-chair of the House Transportation and Infrastructure Committee.
"I'm mad," Lane said. "If we have these dollars to peel off, we should be fixing the roads. For MDOT to jump so far out front on this is concerning."
Tim Hoeffner, director of MDOT's Office of Rail, conceded the project is "costing us more money than we wished it would."
Tim Hoeffner, MDOT Director Office of Rail, left, answers questions as Tim Huffman, senior electrical foreman for Great Lakes Central Railroad stands at right, on a refurbished 1950's era rail car. (Photo: Mandi Wright Detroit Free Press)
"I'm not going to try and spin this," Hoeffner said. "Would we have liked to have gotten the service up and running sooner? Absolutely. Would we have liked to have timed the lease and the overhaul of the equipment to better fit with the start of the services? Absolutely."
But Hoeffner said he doesn't think MDOT made a mistake. There's often a long lead time involved in securing equipment, so the department was right to tackle that issue before other needed items were in place, he said. He blamed a poor economy for the commuter rail services not getting up and running more quickly and said the project has been a boost to Michigan workers and businesses, with a large chunk of the renovation money spent in-state.
"Monday morning quarterbacking, hindsighting this, yes, we could have done a lot of things differently," Hoeffner said. "Based on the available information, and based on the estimated risks, we made sound decisions," and "time will tell ... whether or not we have failed miserably or been great visionaries."
Sen. Goeff Hansen, R-Hart, chairman of the Senate Appropriations Subcommittee on Transportation, said he doesn't want to say much until he has more information on the contract. The deal was signed during the administration of former Gov. Jennifer Granholm, a Democrat, but amended four times during the administration of Snyder, a Republican — each time to increase the contract's maximum cost.
"Any lease that we're not using for something does concern me," Hansen said. "I need to find out at the end of the day, what are their plans, what is the time frame, when are the cars going to be used."
Under its deal with Great Lakes Central, MDOT could have leased and overhauled just 15 of the cars. Hoeffner agreed that in hindsight it would have made sense to go with a smaller number than 23, since he estimates only five cars, including a spare, would be allocated to a Howell-Ann Arbor commuter service — the one he said he feels has the best chance of going into operation first — and nine cars would be allocated to the Ann Arbor-Detroit service.
For now, MDOT has been putting the cars on display in places such as Ann Arbor and Dearborn to drum up interest in the commuter services. The state agency is also looking for temporary and short-term uses for some of the cars — which were part of Chicago's Metra fleet before their sale to Great Lakes Central — to help offset the hefty lease costs, Hoeffner said.
Possibilities include Amtrak using some of the cars on its Grand Rapids-Chicago service, Hoeffner said. That would require cars with handicapped-accessible restrooms. Initially, Hoeffner opted to refurbish the cars without restrooms but has since reconsidered. MDOT recently spent $300,000 to equip two of the cars with handicap restrooms and may pay to put similar restrooms in other cars, he said.
In the meantime, Michigan Auditor General Doug Ringler has also been looking into the expenditures and a report to the Legislature is expected soon.
Carmine Palombo, deputy executive director of the Southeast Michigan Council of Governments, has been working with local officials on developing the commuter rail services. He said there's enthusiasm for the projects all along the proposed lines, but the best bet for the Detroit-Ann Arbor service might be if the new Regional Transit Authority of Southeast Michigan decides to include the proposed service in a four-county transit-related ballot proposal planned for November 2016.
Rail upgrades are under way for the next two construction seasons on the rail line the Ann Arbor to Detroit service would use, and both Hoeffner and Palombo said they don't want to start that service during construction work that could cause delays.
"The real key on both of these services is that without a commitment from the local communities to provide funding to help cover the operating deficits of the service, they're not going to get moving," Palombo said.
Michael Cicchella, a former supervisor of Northfield Township in Washtenaw County, said he worked hard on promoting the commuter service in 2007 and 2008 before stepping aside in frustration. He cited resistance in Livingston County government for the project not proceeding when he thought it should have.
It's too bad, Cicchella said, because commuter rail service between Howell and Ann Arbor could save lives by taking thousands of commuters a day off heavily congested U.S.-23.
Hoeffner said it can cost $2 million to $3 million per car to purchase new cars, and $400,000 to $500,000 per car to purchase new equipment. On that basis, the cost of the project — which now approaches $500,000 per car when renovation costs are included — is not out of line, he said.
Still, "without having firm dates as to when these services are going to start and what all of that is, I believe that it is prudent to question what we've done," Hoeffner said.
Easy solution to this is to sub-lease the cars back to Metra as backup or to another Commuter agency and recapture some of the money being spent.
Another option is explore with Amtrak new service using the cars as equipment.
Maybe Detroit to Toledo OR Detroit to Lansing?
CMStPnP Easy solution to this is to sub-lease the cars back to Metra as backup or to another Commuter agency and recapture some of the money being spent. Another option is explore with Amtrak new service using the cars as equipment. Maybe Detroit to Toledo OR Detroit to Lansing?
Amtrak used to have a Toledo-Detroit service. Michigan is studying a Detroit-Lansing-Grand Rapids service, but any potential start-up would be years away.
I'm surprised the article did not mention the $ million in damages done by vandels during last winter storage in Cadillac, MI.
Why is Trains Mag. not reporting on this why are they dropping the ball?I reported on this 3 years ago and nothing.
Ross Capon of NARP is to blame for dropping the ball here its time for new leadership at NARP. He knew about this and did nothing.
trackrat888 Ross Capon of NARP is to blame for dropping the ball here its time for new leadership at NARP. He knew about this and did nothing.
And how is this situation his fault??
trackrat888Why is Trains Mag. not reporting on this why are they dropping the ball? I reported on this 3 years ago and nothing. Ross Capon of NARP is to blame for dropping the ball here its time for new leadership at NARP. He knew about this and did nothing.
Might as well ask why are YOU dropping the ball, if you knew about it three years ago and have done nothing ... are probably still doing nothing other than commenting here.*
You need to explain why you think that either NARP or Trains Magazine are supposed to have the power to deal with this situation, either in a political or executive sense.
*Fair disclosure: I'm 'dropping the ball' too by not being in a position to make a positive difference in this situation. In part this is because I live far away from the region concerned, do not vote there, and have no standing as an 'influencer' with any of the agencies or political figures concerned. I'll grant you that NARP or Trains are organizations with more recognition -- but would their opinions carry that much more weight with the people already making the decisions?
I rode the Amtrak Amfleet-I Detroit - Toledo service once or twice. It was intended as a connection for the Lake Shore, since Amtrak was not providing the service the Central (PC and NYC) had provided direct east via the Canada Southern - Michigan Central - NYCentral System directly east to Buffalo. NY or Boston to and from Detroit or AnnArbor were frequent trips for me, starting at age 10 on the Empire State Express in 1942 and last in the summer of 1995, with the Amtrak connection a bus, I ended up flying. I guess there still is a bus connection, and possibly I would have been better off using it.
Trinity Transportation http://trinitytransportation.com/ provides connecting service between Detroit and Toledo.
Johnny
ATK's Detroit-Toledo service was actually an extension of one of the Wolverine (CHI-DET) trains that continued to Toledo. In the early 90s I rode from a connection off the Lake Shore from Toledo to Battle Creek. At Detroit, the train backed into the former station near the old MC Terminal. Eventually the Wolverines were extended north past downtown Detroit to Pontiac, which eliminates a Toledo extension. The new M-1 light rail line will connect the new ATK station to downtown Detroit.
I rode on these cars on this years sri polar express. Nicely done. Classic commuters cars but would not be suitable for Amtrak inter city service.
ROBERT WILLISON I rode on these cars on this years sri polar express. Nicely done. Classic commuters cars but would not be suitable for Amtrak inter city service.
They could work with an interior rebuilding to allow for more legroom. C&NW used 96-seat gallery bi-levels on the "Peninsula 400" and "Flambeau 400".
MidlandMike ATK's Detroit-Toledo service was actually an extension of one of the Wolverine (CHI-DET) trains that continued to Toledo. In the early 90s I rode from a connection off the Lake Shore from Toledo to Battle Creek. At Detroit, the train backed into the former station near the old MC Terminal. Eventually the Wolverines were extended north past downtown Detroit to Pontiac, which eliminates a Toledo extension. The new M-1 light rail line will connect the new ATK station to downtown Detroit.
Why does that eliminate a Toledo extension? In the early 90's I used to work on the 15th floor of the GM HQ building on Grand Avenue and if memory serves me correctly, not very distant from the New Center Amtrak station is a wye that takes trains to the Michigan Central Terminal and connections with the line to Toledo.
Quite a view from the GM Building you could watch the former GT for hours move trains up and down the line and use that wye. BTW, the New Center Amtrak station was supposed to be temporary until Detroit got it's act together on both a rail routing and station closer to Downtown. That was Amtrak's view. Detroits view is that this station is the new Detroit station because of the financial condition of Detroit.
Not sure if they replaced the prefab structure yet in the New Center Area but that was intended to only be there 10-15 years until they could replace it with a more permanent station building, the New Center station itself was built with temporary in mind and it's not going to last long before it needs replacement. Amtrak choose the location more for operational flexibility (proximity to those rail junctions).
The Penninsula 400 even had one gallery car configured as half a parlor car with individual swival seats both upstairs and down. Maybe the Falmbau did also.
Rode the 400 Milwaukee - De Pere. After an Electroliner ride from Chicago.
CMStPnP MidlandMike ATK's Detroit-Toledo service was actually an extension of one of the Wolverine (CHI-DET) trains that continued to Toledo. In the early 90s I rode from a connection off the Lake Shore from Toledo to Battle Creek. At Detroit, the train backed into the former station near the old MC Terminal. Eventually the Wolverines were extended north past downtown Detroit to Pontiac, which eliminates a Toledo extension. The new M-1 light rail line will connect the new ATK station to downtown Detroit. Why does that eliminate a Toledo extension? In the early 90's I used to work on the 15th floor of the GM HQ building on Grand Avenue and if memory serves me correctly, not very distant from the New Center Amtrak station is a wye that takes trains to the Michigan Central Terminal and connections with the line to Toledo. Quite a view from the GM Building you could watch the former GT for hours move trains up and down the line and use that wye. BTW, the New Center Amtrak station was supposed to be temporary until Detroit got it's act together on both a rail routing and station closer to Downtown. That was Amtrak's view. Detroits view is that this station is the new Detroit station because of the financial condition of Detroit. Not sure if they replaced the prefab structure yet in the New Center Area but that was intended to only be there 10-15 years until they could replace it with a more permanent station building, the New Center station itself was built with temporary in mind and it's not going to last long before it needs replacement. Amtrak choose the location more for operational flexibility (proximity to those rail junctions).
I would guess the wye you saw near the New Center was Milwaukee Junction (to the east) where CN's former passenger line went to their Detroit treminal. The line to the demolished terminal is now an urban bike path/park called the Dequindre Cut. There is still a wye (to the west) to the old MC Terminal, but the point of my post was that the train from Chicago, heads north to Pontiac after the Detroit stop, the opposite direction from Toledo.
It is about three miles from the wye (CP Scotten) which, as well as I can tell, turns the Pontiac-bound trains towards the current Detroit station, which would necessitate backing a Chicago-Detroit-Toledo train that distance. This may be the same wye, which is about a mile from the MC station, mentioned earlier, which would have been used by a Chicago-Toledo train that ran into the MC station.
I do not recall if Amtrak was already running trains to Pontiac at the time that the connection was made in Toledo. If so, only two trains were serving Pontiac instead of the three that currently serve that city.
I looked up the history of the Wolverine and Lake Cities services on Wiki. The lake Cities (CHI-DET-TOL) ran 1980-95. The Pontiac extension for two of the Wloverines started 1994. So there was a year or so of overlap of both Toledo and Pontiac trains. I could not find out if the New Center and the MC am-shack both operated concurrently during that year. At the end of the year, the Lake Cities just became anothe Wolverine service Pontiac train. The New Center station being 3 miles off the CHI-Toledo route would make reconstituting the Lake Cities problematic. I also doubt that Michigan would want to divert a train from Pontiac. There was a proposal from an Ohio group for a Cleveland-Toledo-Detroit route, but I don't see a political path for that right now.
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