Texas Central HSR (Houston - DFW Dallas Fort Worth)

General discussion of passenger rail proposals and systems not otherwise covered in the specific forums in this category, including high speed rail.

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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby mtuandrew » Wed Jan 09, 2019 9:12 am

Interesting discussion indeed.

The one elephant in the room is potential real estate revenues. Like Amtrak and Brightline, TCRY intends to leverage commercial real estate at every station. Both ends will create new city centers, especially in Houston. How many millions a year will that contribute, in year 10 if not year 1? (I honestly don’t know.)

I’m not sure whether there will also be ROW usage by utility companies, but it would be unsurprising.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby Arlington » Wed Jan 09, 2019 1:39 pm

If WN fares vary between $100 and $260, what is the average DAL-HOU fare (from BTS?)
If the real number is significantly higher than the $100 I've been using, every bit of that flows to TC's bottom line estimates.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby dgvrengineer » Wed Jan 09, 2019 7:46 pm

I think TC's entrance into the Dallas-Houston market would generate a "price war" especially if they start to take a significant amount of business from the airlines. So they may not be able to get $100 or more per trip at least until things settle out.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby eolesen » Thu Jan 10, 2019 1:20 am

mtuandrew wrote:Interesting discussion indeed.

The one elephant in the room is potential real estate revenues. Like Amtrak and Brightline, TCRY intends to leverage commercial real estate at every station. Both ends will create new city centers, especially in Houston. How many millions a year will that contribute, in year 10 if not year 1? (I honestly don’t know.)

I’m not sure whether there will also be ROW usage by utility companies, but it would be unsurprising.


Yeah, not so sure about creating a new city center.... they’re favoring area that are brownfield development, but that doesn’t always mean it’s going to work.

Northwest Mall in HOU is the preferred site. The mall has been shuttered for almost two years, but had been sitting at 70% or less occupancy for most of the prior ten years. It sits right next to the interchange of US290 and I-610, which is otherwise a largely industrial area. Outside the mall footprint, the Houston ISD has an adjacent parcel where it has its admin offices, as well as a sports complex (large arena and several football/soccer fields. Access to the site is poor, as the interchange forces the nearest exits to be about a mile in either direction along 610. Extending the light rail network to the site would require about 7 miles on the green/purple lines.

The Dallas site is almost downtown, and considerably better. It’s on the light rail network, but also suffers to a lesser degree from poor road access.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby Arlington » Thu Jan 10, 2019 9:14 am

Both sites are essentially better than Brightline's in terms of potential. Similar "neighborhood from nothing" mechanics and two substantially-larger metro economies.

The Brazos/College Station area is interesting but there will undoubtedly be households where "he" works in Dallas and "she" works in Houston. It will be the ultimate "serve both markets" location for people who mostly work at home but have clients at either end. This is similar to what's powered NEC ridership at BWI and all of Amtrak Virginia.

All of which goes to: Don't minimize the potential that real estate will contribute substantially to TCs ability to pay back its loans.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby mtuandrew » Thu Jan 10, 2019 6:06 pm

Mr. Olesen: that Northwest Mall site looks like a gem in terms of redevelopment. The mall is half of the draw, but look at all the light industrial properties opposite the tracks ripe for adding value. Lofts are starting to creep into the area off Post Oak, and there are already high-rises across the freeway so it has some weight as a commercial center. Houston Independent School District is a draw in its own way, as an additional anchor for public transit and as a development relief valve (they have a LOT of surface parking lots that could be garages & mixed-use.) The highway access issue is real, but if Texas Central makes this their home, they will work with the state to vastly improve access from the Northwest and West Loop Freeways.

And, if TCRY does change its mind and move downtown later, congrats! they just created $500M in real estate value and a valuable suburban station like RTE, NCR, or MET on Amtrak.
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Re: Texas Central HSR (Houston - DFW Dallas Fort Worth)

Postby Jadebenn » Fri Jan 11, 2019 5:10 am

If I could stake out a middle ground here, I do believe the Texas Central project will be a government-subsidized venture; just not by our government.

Following Japan's other overseas HSR ventures, there's always been a financing component. The Japanese seem to have come to the conclusion they can't beat the Europeans on cost, so they use the offer of below market-rate financing to entice potential customers. In India, Indonesia, and Taiwan, the Japan Bank for International Cooperation (JBIC) has offered low-interest financing to help cover the costs of these Shinkansen projects.

Considering some of TCR's behavior (in addition to the fact that the JBIC has already given them $300M to bring the federal permitting process to a close), I have very little doubt that they have some sort of deal with TCR to do the same here as well. In fact, a lot of TCR's seemingly odd behavior makes sense when analyzed under this assumption, such as why the project's purpose as listed in the DEIS is NOT for a non-specific HSR system connecting Houston and Dallas, but for an HSR system utilizing the N700I system. TCR must have intentionally baked it into their EIS as part of their agreement with their Japanese backers.

Now, I doubt the financing for the Texas project will be as generous as some of the deals given to some of the less-developed countries above. Private investment will almost certainly be required to make up the difference. Still, I'd imagine they're planning to front a pretty significant chunk of it (if you'll pardon my hearsay, I've heard the current prediction is about half of the financial requirements, but don't quote me on that).
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