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Details emerge about Zip Rail backers

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Questions far outnumber answers when it comes to North American High Speed Rail Group and its proposal to build a high-speed rail line from Rochester to the Twin Cities.

It's been nearly a month since North American publicly acknowledged its interest in privately building and operating the high-speed rail line, known as "Zip Rail." Company leaders have met with lawmakers behind closed doors to discuss their plans for the rail line, which could cost between $2 billion and $4 billion to construct. But little remains known about the company and its investors.

However, some key details have emerged: The company is backing an effort to bring the World's Fair to Minnesota. In addition, North American plans to develop real estate in connection with the project, which could help generate money to cover its high cost.

The proposal is expected to get national attention Wednesday afternoon in Washington, D.C., when North American Chief Strategy Officer Wendy Meadley joins Olmsted County Commissioner Ken Brown and Olmsted County rail adviser Chuck Michael on a panel to discuss the project at the U.S. High Speed Rail Association.

Brown said the county has been meeting with North American representatives for a couple of years. But when it comes to providing information about the company and its investors, Brown said that's up to North American to release.

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"It's their announcement and we know a little bit, but I'm not at liberty to talk about it," Brown said.

Meadley declined to provide information regarding North American's Chairman Joseph Wang and its President and CEO Joe Sperber. In an email, Meadley said that information will be provided "when we are in a position to move forward with the corridor."

Zip Rail opponents have been critical of North American for not releasing more information to the public. Last month, the group hosted a private meeting with lawmakers at the Capitol. So far, no one from North American has testified before a legislative committee — even as lawmakers consider legislation that would prohibit any public funding for the high-speed rail line.

Concerned about quietness

Heather Arndt, with Citizens Concerned About Rail Line, told a House panel last week she's deeply concerned about North American's unwillingness to discuss their project publicly.

"Refusing to step forward, to me, brings to question the integrity and sincerity of the statements they've made behind closed doors," Arndt said.

According to the Minnesota secretary of state website, the "North American High Speed Rail Company" was established as a Limited Liability Company in August of 2014. Sperber is from Stillwater and previously was CEO of HexFuel, which makes a device that improves the performance of diesel engines.

Sperber had an unhappy departure from HexFuel, however. In August 2014, Hexfuel sued Sperber and two other former employees in Ramsey County District Court, accusing them of defaming the company and stealing its clients. Hexfuel is seeking more than $50,000 in damages. The defendants have denied those allegations in a counter claim and are seeking damages of more than $50,000 for HexFuel's "abuse of process."

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North American has assembled an advisory board with some big names on it. After the first story about the company ran on March 18, the group removed the names of advisory board members from its website — except for the name of board chairman Bill Goins, worldwide account manager at FedEx based in the Twin Cities. Meadley said Goins is out of the country and unavailable for an interview before the paper's deadline.

Other members of the volunteer board include Chris Terry, vice president of business development for Knutson Construction in Rochester, and Dale Wahlstrom, former president and CEO of St. Louis Park-based LifeScience Alley.

Ties to World's Fair effort

North American is a founding sponsor of an effort to bring the World's Fair to Minnesota in 2023. It's worth nothing that Meadley previously worked as strategic communications lead for Expo 2023, the group working to bring the World's Fair to Minnesota, according to her LinkedIn profile. North American representatives have said their goal would be to have the rail line operational by 2022.

Rep. Nels Pierson, R-Rochester, said he has met with officials from North American a couple of times but does not know much about the company. During those talks, he said, representatives emphasized they are interested in building and operating an elevated high-speed rail system with private money along U.S. Highway 52. The group also would be seeking to develop real estate in connection with the project. Pierson said it's a proposal that appeals to him, but he still has a lot of questions.

He added, "Ultimately, how do you protect the taxpayer from this if it has to be bailed out?"

Olmsted County Commissioner Sheila Kiscaden said North American's proposal to privately fund a high-speed rail project has never been done in the United States. She said it's now up to the Minnesota Department of Transportation to vet the proposal.

Kiscaden added, "We really will rely on the Minnesota Department of Transportation to move forward from here. How would this group of investors or other group be able to bring that project forward?"

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Rep. Kim Norton, DFL-Rochester, said North American is waiting for the results of the second phase of the environmental analysis before making a decision about whether to move ahead with the project.

"People want answers to their questions that there aren't answers to yet because it's too early," Norton said. "And I know that's really frustrating to them, but that's just the truth of the matter."

Related Topics: NELS PIERSON
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