A Mobile City Council committee finished a meeting Thursday without making a recommendation regarding the Southern Rail Commission’s (SRC) funding request to bring passenger train service back to the Port City. However, amid concerns over port operations and financial burdens, the committee’s chairman sees a path forward for the request.
Councilman Joel Daves, chairman of the board’s finance committee, said the SRC’s request of a $3 million commitment could pass a Dec. 31 council vote if the item is made into a letter of intent rather than a firm contract.
“What I suspect is going to happen is the resolution will be tweaked in some way to make it clear it’s a letter of intent and not a contract,” Daves said. “I suspect that will pass.”
The city’s commitment would act as the local match for a federal grant that would fund the return of passenger rail from Mobile to New Orleans for three years. The service would be twice daily with stops in Pascagoula, Biloxi and Bay St. Louis.
The commitment would offset the operational costs for the train once the passenger-related revenue has been subtracted from it. Amtrak has based the $3 million figure on if an average of 38,000 passengers per year spent $18.33 each per trip. One-way tickets for the trip are expected to cost between $28 and $35. The commitment will not exceed the $3 million figure, but it can decrease if Amtrak does better on passenger-related revenue.
Despite the probable passage of the letter of intent, Daves said he has concerns over the financial impacts for the city after the three years have passed.
“There’s a whole host of unanswered financial questions,” Daves said.
Daves has calculated the service would need to be subsidized to the tune of $1 million to $2 million per year after the grant runs out.
“Absent some … embrace of the service from the public, the council will have to look at a subsidy of $1 million to $2 million,” he said. “We have to weigh that against everything else going on in the city. We’d be spending millions of dollars a year on something that is an amenity.”
Stephen McNair, a member of the SRC, said while there could be some need for the city to subsidize rail service after the three years of the grant have passed, he believes increased tourism activity could fill in the gap. He compared rail service to interstate highways.
“The city doesn’t make money off of the interstate, but it does bring in tourists,” he said.
As for infrastructure improvements, McNair said Amtrak would require upgrades to crossings as well as other changes. He said the SRC intends to ask Mobile County or the state to fund those changes.
Daves and Mayor Sandy Stimpson both have concerns the service could disrupt port operations. Stimpson said while his office is generally supportive of the effort to bring passenger rail service back to Mobile, it’s “premature” to jump on board with something on a conceptual level without finding out first if there would be any negative impacts to the port or local business.
Daves is hopeful an Amtrak, CSX and Norfolk Southern study could help determine the negative impact on the port and commercial freightlines.
Port CEO Jimmy Lyons said he has two main concerns over the possible return of passenger rail service to Mobile. One is traffic going to two port terminals near the mouth of the Mobile River. Lyons said the proposed move of the passenger train station from the downtown waterfront to Brookley might alleviate that concern.
Another, more pressing concern for Lyons is interruption to the port’s railyards and the way it moves freight. Lyons said the CSX line Amtrak would be using runs between the port’s railyards. When cars are being delivered, Lyons said, the port sometimes uses CSX track.
If Amtrak returns to service in Mobile, it will be given preference and the freight trains in its way will be forced to park on side tracks. One of those side tracks is in close proximity to where the port moves cars. With Amtrak service running 12 hours per day, Lyons said it’s possible the port could be blocked by freight trains on the side tracks. At night, a backlog of trains could also have an impact.
“If it does, in fact, block us, it would be catastrophic,” Lyons said. “There may have to be more sidings built and that would be expensive.”
Like Daves, Lyons said he hopes to see what the study has to say about the impact.
SRC Chairman Wiley Blankenship said the concerns about port operations are valid and he is willing to see if a Jan. 6 deadline for grant funding can be pushed back until after the study comes out.
“I assure you, we want to make sure any adverse impact to freight rail … is minimal,” he said. “We don’t want to hurt our economy by forcing something that doesn’t fit. We hope the impact is minimal.”
McNair said it is important for the council to vote on the letter of intent before Jan. 6 because without the letter, or the grant, the price for passenger rail service will double.
Previous studies done on the impact to the port have shown passenger rail service would have a “negligible” effect, Blankenship said.
“If we have to wait and see, I’m good with that,” he said. “I understand that.”
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