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A private builder for Zip Rail?

A Minnesota-based transportation business has emerged as the possible private-sector answer to the Zip Rail funding question.

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The United States High Speed Rail Association hosted a three-day conference in Washington, D.C., where groups from around the country converged to outline plans for high-speed rail projects. One was the North American High Speed Rail Group, which says it hopes to build the Zip Rail between Rochester and the Twin Cities.
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A Minnesota-based transportation business has emerged as the possible private-sector answer to the Zip Rail funding question.

The North American High Speed Rail Group has been meeting with county officials and Minnesota lawmakers to pitch its proposal for high-speed rail service between Rochester and the Twin Cities, said Wendy Meadley, the group's chief strategy officer. She said North American has pulled together a group of investors interested in the rail line and that the project would also include an economic development component that's tied into the rail corridor.

"The economic development piece is exactly the model that we believe has been missing in America thus far. When you look at high-speed rail, it's active and thriving around the world," Meadley said.

For months, Olmsted County officials have said there has been interest within the private sector to build the proposed high-speed rail route known as Zip Rail, but this is the first time the name of a potential developer has emerged. Chuck Michael, a rail consultant for Olmsted County, said the county has vetted the group and that they are "extremely serious."

Michael added, "When someone is saying they are willing to pay for it, you really have to sit up and listen."

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The question of how to pay for the proposed high-speed rail line has been the biggest issue for advocates. The project is estimated to cost between $2 billion to $4 billion to construct. Meadley said the group would cover the total cost of the rail line's construction and operation. Since the project would not be contingent on federal or state funding, she said that would enable it to move ahead more quickly. The goal would be to complete the project by 2022.

Olmsted County Board of Commissioners Chairman Paul Wilson said the county has been looking to partner with a private-sector entity to move the project forward.

"The goal all along has been that we'd work with the private sector and the private sector at some point would be the main force behind it," Wilson said.

A Tier 1 Environment Impact Statement process is underway for Zip Rail and two routes are being considered — U.S. Highway 52 or Minnesota Highway 56. Meadley said the group's proposal calls for building a high-speed rail line along an existing highway on an elevated track. That would avoid cutting across farm fields. It would also connect Rochester and the Twin Cities with trains traveling more than 200 mph.

Compromise on Zip Rail?

On Thursday, the North American High Speed Rail Group will be available to meet with lawmakers to answer questions. The group's push to win legislative support comes as Rep. Pat Garofalo, R-Farmington, announced on Tuesday that he had reached a compromise with Zip Rail supporters.

Garofalo introduced a bill earlier in the session that would have blocked Zip Rail from being built. After working with project backers, Garofalo said he has agreed to a compromise that would allow a privately-funded project to move ahead. Under the agreement, taxpayer dollars could not be used for rail construction, rail acquisition, rail car purchases or the rail's operation.

"It protects taxpayers from what would be billions of dollars of potential liability while at the same time allowing a private-funded option," Garofalo said.

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He said he will seek to have that language included in a larger House transportation bill. It would still have to win support in the DFL-led Senate and from Gov. Mark Dayton.

The announced compromise caught Rochester-area lawmakers off guard who said they had not been part of the negotiations. Rep. Kim Norton, DFL-Rochester, said she was disappointed that she wasn't part of the discussions.

"I personally think it's a very bad idea to do this and that we should never close doors too soon," Norton said. "There are no proposals to spend any (public) money on Zip Rail, and yet we are going to put something in law that says you can't do it."

Rep. Nels Pierson, R-Rochester, was also surprised by news of the compromise. He said he has concerns about limiting potential funding options at this time.

"It's important to not treat this differently than any other transportation project," Pierson said.

However, Rep. Tina Liebling, DFL-Rochester, said she was pleased to see a deal reached.

"I'm glad to see we can reach some bipartisan agreement around this to allow this to move forward with the private-sector option," Liebling said.

She said, however, that she is concerned about prohibiting any public dollars from being used to acquire land in case a situation arises where a small piece of property needs to be acquired for the project. She said she'd like to see such land remain public. 

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Wilson said that Garofalo's legislation is in line with Olmsted County's plan to have private business take over development of Zip Rail.

Rep. Steve Drazkowski, R-Mazeppa, said he has also been working with Zip Rail supporters on a compromise to allow private construction to move ahead. He said his proposal would require financial assurances so that if the project fails, taxpayers aren't stuck with the cost. He is still pushing ahead with a bill that ties Destination Medical Center funding to Zip Rail. It would give the city of Rochester more flexibility in how it pays for DMC-related administrative costs in exchange for requiring no public dollars are spent on Zip Rail.

What happens next?

The Tier 1 EIS for Zip Rail is expected to be completed by the end of the year, Michel said. If North American moves ahead with its plans to build the project, the group would fund the Tier 2 EIS that is required. The estimated cost of that is between $30 million to $50 million, Michael said.

Meadley said her group doesn't plan to spend time trying to convince communities to back their proposal. Rather, she said the conversation could be focused on the project's potential to transform the region and ideas for what could be done as part of it.

She added, "We're going to demonstrate that it's economically viable."

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