70s Terminal Deficits: Just How Bad Was It?

[gokeefe]

The ribbon cutting reported today at Springfield Union Station made a brief mention of major improvements in the fiscal situation for the station (23% reduction in subsidy next year with more to come).

This story brings back to mind some of the terminals occupied by Amtrak in the early years and what must have been horrific operating losses incurred to operate them.

Some examples include Michigan Central Station (Detroit), Buffalo Central Terminal, Central Station (Chicago), Great Northern Station (Minneapolis), Union Station (Nashville), Broad Street Station (Richmond), St. Louis Union Station, and Tacoma Union Station.

Some of these facilities were true "terminal" stations in the corporate sense meaning they had been owned and operated jointly by multiple railroads.

With the recent success, previously unthinkable in most places, of so many station rehabilitation projects it seems like an opportune time to recall just how deep the hole was in the first place.

For those with any doubts a brief read through the "Terminal Planning", "Real Estate" and "Legal" section of the 1973 Amtrak Annual Report should put those to rest.

So ... To those who were there or have heard about it along the way ... "Just how bad was it?"

[Tadman]

I don't have first hand knowledge, as most were gone or shuttered by the time I was around. But I bet it was bad, and here's the math I'd back into:

1. Stations were seeing 3x/day each way, when once they had 25x-50x.
2. Assuming profit margins of 15% and even revenue contribution by each train.

That means that when 40 trains might result in 15-20% profit on the terminal property, three trains might cover something like 9% of the cost to operate such a station. Assuming a budget of $10m/year to run a big station (who knows if that is right??) that means they were covering $1m with $9m in losses.

Whoops.... big money down the drain there.

[gokeefe]

If you read between the lines from the report it appears that the terminal companies were not budging much (if at all) on rent. Amtrak makes it clear that they are addressing the problem through new station construction (planning for Staples Mill is highlighted). I found it remarkable that such a short period into the new operation that they had already made the pivot to smaller stations.

Still hoping to hear from other members who might have seen (or heard) just how bad it was ...

[Gilbert B Norman]

The jointly owned terminals provisions were covered in Section 4.4 of the May 1, 1971 Agreement. The provisions resulted in a confluence of parties on one side that wanted to stop running trains and another wanting to start running them.

I know first hand (again, I was in the industry on A-Day) that much litigation between Amtrak and the various Terminal Companies were the result. In essence 4.4 provided that the entire cost of the facility, even if Amtrak only had "one a day" would be borne by Amtrak. Why this provision was not challenged before signing on the strength of "unconscionable" (that's an "out" as our barristers around here will confirm), escapes me, but Amtrak had two courses of action. One was "suem" and the other was "split". They did both opening litigation against several Terminal Companies and also vacating in quite short terminals such as Cincinnati, Richmond Broad St., Jacksonville, and Kansas City.

I never did learn the results of the litigation, but the cost savings were immediate. That several of the terminals vacated Amtrak returned to was the result of ownership change and fair and reasonable access provisions. Had such been properly negotiated prior to A-Day, the "biggest losers" would have been ......guess who?

[mtuandrew]

I really think the AmShack (Amtrak Standard Station Program), there’s a thread around here on it too) was a brilliant idea. The fact that Amtrak doesn’t use a lot of them anymore is a testament to how much money they saved, and how they sustained service to communities who’ve since restored older stations or constructed new ones.

Does Amtrak have a new standard station design? A modern adaptation of the 300A, 150B, 50C, 25D and E (unstaffed) designs would help Amtrak build a unified image. Also, offering a standard rebuild program for the staffed originals (300AR-25DR, replacing any E stations outright) could be a good way to curry favor with small-town America while reducing costs.

[Greg Moore]

I haven't heard of any word about an updated standard set of designs.
That said, what I have seen is more towns are willing to invest their own money and design their own stations.

[Backshophoss]

You have to figure on some locations wanting to stay away from the "cookie cutter" designs, ABQ lost the Santa Fe designed station to fire,
moved ticket office into what was the "Indian Curio" building while the City worked on getting the Land of the Demo'ed Avarado Hotel,
the burned down station to create the transit hub for ABQ Ride(local bus),and a combined Inter=city bus/Amtrak station,both built
with design elements from the Avarado Complex of buildings that graced Downtown ABQ for years
This also got rid of a '60's era bus depot/shop built by Greyhound that was falling apart and an eyesore.

[mtuandrew]

Hoss: I’m thinking more for the smaller cities and towns that have stations (or don’t), and want something better than a bus shelter on a platform. Like GFK for instance, they still have an AmShack (don’t recall if it’s a 150B or a 50C) that replaced the Great Northern’s depot.

Sorry for the convo detour, everyone.

[gokeefe]

I know first hand (again, I was in the industry on A-Day) that much litigation between Amtrak and the various Terminal Companies were the result. In essence 4.4 provided that the entire cost of the facility, even if Amtrak only had "one a day" would be borne by Amtrak. Why this provision was not challenged before signing on the strength of "unconscionable" (that's an "out" as our barristers around here will confirm), escapes me, but Amtrak had two courses of action. One was "suem" and the other was "split". They did both opening litigation against several Terminal Companies and also vacating in quite short terminals such as Cincinnati, Richmond Broad St., Jacksonville, and Kansas City.

I am curious why the Terminal companies held on instead of immediately making concessions. These were all jointly operated by the railroads ... Was the intransigence by the Terminal companies a result of railroad owners' desires to rid themselves of even indirect involvement in passenger rail service?

[Gilbert B Norman]

Mr. O'Keefe, to be party to the motivation to put such an "unconscionable" provision on the table was above my pay grade. I don't think the Incorporators and their consultants such as Arthur Andersen really knew the intricacies of Terminal Company accounting. Amtrak wanted to start running trains so I think there was some "just give it to 'em".

The impact of a terminal with a large number of trains was hardly that of where there was "one a day".

I also learned that Santa Fe, "on the fence" about signing up to start, darned near didn't when they were confronted with being the sole user of Dearborn with "one a day" or entering CUS under their Tenants agreement. They were concerned if Amtrak would pay the "unconscionable" access, and since being a tenant, as they were at Dearborn, and not sure if 4.4 would apply. Their fears were allayed just in time.

Finally, I wish I knew more about LAUPT - "three a day" on A-Day. But sorry, I don't.

[gokeefe]

Mr. Norman are you saying that ATSF was concerned whether Amtrak would be willing to pay for access to Dearborn or CUS? Or do you mean whether or not there were implications with regards to rent to either party post A-Day based on who was operating the Super Chief (to whichever terminal)?

[TDowling]

As Amtrak was conceived in 1971, more or less the nadir of American railroading, and keeping in mind the fact that new businesses tend to incur large deficits in their first few years, major hardships wouldnt surprise me. Throw in the fact that its a federally operated enterprise in what was and is in theory a free enterprise economy, and you have a major crap chute.

[Tadman]

Mr. Norman are you saying that ATSF was concerned whether Amtrak would be willing to pay for access to Dearborn or CUS? Or do you mean whether or not there were implications with regards to rent to either party post A-Day based on who was operating the Super Chief (to whichever terminal)?

He's saying that ATSF was 50/50 on joining Amtrak, and they decided to do so because they were worried that CUS terminal fees would be obscene, or alternatively, Dearborn Station terminal fees would be even worse as ATSF was the only tenant left in that scenario. Evidently they felt those were the only two options.

I wasn't there at the time time, but I'm not clear why they didn't follow N&W's lead and run their Super Chief and Grand Canyon (only trains left?) from the N&W commuter platform mid-day. N&W decamped from Dearborn and used a track off to the side but not on-premises for their 1x to Orland Park. I don't know for sure, but it sound like they had similar reasons.

There are a few pics out there somewhere of this side terminal, but they're quite rare.

[ExCon90]

Where did ATSF service their trains in Chicago--in their own coach yard, or was it done somewhere on C&WI? I've never really thought about it.

[R36 Combine Coach]

Wasn't St. Louis Union Station part of TRRA (a terminal association of private railroads)?