Local in Ann Arbor

For many months, it has been hard to find out what is going on with the Fuller Road Station (FRS). One senses that behind the curtain, people are moving scenery around, but the play seems to be stalled between acts.  The University of Michigan was planning to have its Fuller Road parking structure ready for use by June 2012.  It is difficult to see how that can happen now, since construction has not begun (apart from the sewer and stormwater construction approved by the Council in June 2011).

Mayor John Hieftje added to the mystery with his open public letter last July.  That letter, as our post of the time describes, was more about the benefits of (rail) transit than about the proposed structure itself.  What has been planned to date is a parking structure for the University of Michigan, but the Mayor prefers to stress the eventual train station intended for the location.  This is most likely related to the difficulty in defending a structure built only to provide parking for the UM, as recent commentary at a PAC meeting indicated.

Mayor John Hieftje on CTN

Now the man behind the curtain has spoken again.  The mayor was interviewed recently (November 23, 2011) on “Conversations”, a program on Ann Arbor’s Channel 19 (CTN) conducted by interviewer Jim Blow (see recording here).    Just one minute of that interview dealt with Fuller Road Station.  Some parts are difficult to hear, but a transcript has been made.  (The interviewer’s questions were abbreviated slightly.)

Here are the relevant statements from the Mayor’s comments.

So what was that again?  The Mayor seems to be conflating the original Phase I (parking structure) plan for the site with the future train station when he talks of the match for the $40 million for the train station.  The Fuller Road parking structure has been reported by AnnArbor.com as estimated at $40 million.  A more accurate figure is likely $46,550,000, as approved by the UM Regents in 2010.  That figure does not include site preparation of approximately $3 million, which, as the UM memo notes, is borne by the City of Ann Arbor.  (Ed. note: Presumably this includes the sewer work now underway.)  Although concept drawings include a location for a future train station adjacent to the parking structure,  what is being discussed currently is a parking structure, as we detailed in our post, Fuller Road Station: It’s All About Parking.

The UM memo also notes that UM agrees to pay 78% of the costs of construction of the parking structure, with the city picking up 22%;  this is consistent with the original Council Memorandum of Understanding .  The UM memo authorizes only a total “not to exceed” amount of $36,309,000 and also notes that the City will pay for an environmental assessment.  That means that in order to pay for its share of the parking structure, the city would need to come up with $10,241,000 (in addition to the cost of site preparation and the environmental assessment).  But how does that reconcile with the Mayor’s statement that “the plan is that the city puts no money into this”?  No wonder that, as he says, “the conversation got a little convoluted”.

Additional hints that the process has been drifting askew were provided by comments at a recent Ann Arbor Public Art Commission meeting where, according to the Ann Arbor Chronicle, AAPAC commissioners were told that the public art for Fuller Road was being put on hold because the project was delayed by “as much as 6-12 months”.  But in an interview by AnnArbor.com, the Mayor said that “two to three months sounds more reasonable to me”.  The difficulty, according to that article, is that UM and the city attorneys are negotiating on a “construction, operations and maintenance agreement for the first phase” (i.e., the parking structure).

But it seems from here that there are two outstanding difficulties:

• The continued assertion on the part of the Mayor that we can move right ahead on the train station.
• A lack of understanding about where the city’s portion ($10+ million) of the construction costs is coming from.

Rumor and speculation hold that the city is trying to persuade the UM to make a loan of the city’s portion, to be paid for from parking revenues.  This idea was brought up by the Mayor in his letter of last summer,  but there has never been confirmation from the UM that this would be satisfactory.

Will Uncle Sam Really Make Us a Gift of a Train Station?

A puzzle all along has been that the Mayor has seemed to possess a blithe faith that somehow money will materialize to pay for the final train station realization of the  FRS. (The “$40 – some million of Federal money for the build-out of the train station” does not currently exist.)   And he continually assures us that this will not be at the expense of Ann Arbor taxpayers. But his assurance appears to be built on a poor understanding of current transportation funding.

Much of the belief in the possibility of a future Fuller Road train station seems to be based on an award received recently as part of a Federal grant to support Michigan high-speed rail between Dearborn and Kalamazoo (the line to Chicago).   As stated in Congressman Dingell’s announcement,  “The… funding will allow Ann Arbor to begin engineering and environmental documentation required to design and construct a new intercity and high-speed rail station, drop-off areas, rail platform and other work, including track, switches and signals.”  The crucial words here are “begin…documentation”.  In other words, this is only a grant for planning, especially to complete a NEPA (National Environmental Policy Act) report, which is required for all projects seeking Federal funds.

In the announcement and description of the High-Speed Intercity Passenger Rail Program (HSIPR) grants, details are given about what source funds for each grant come from, and specifically what they are to pay for.     Here is what the money awarded for the Fuller Road Station (title: Individual Project – Preliminary Engineering / NEPA) is actually to pay for.

This project is for the completion of preliminary engineering and environmental documentation required to design and construct a new high-speed rail station in Ann Arbor, MI to serve the Chicago to Detroit high-speed rail line.

Apparently just the fact that a Federal grant was bestowed for this very limited purpose is taken as assurance that the entire amount will be forthcoming.  In an email, the city’s transportation program manager Eli Cooper said,

The fact the FRA has funded the preliminary engineering and environmental documentation is the strongest evidence we have to date regarding the federal commitment to the Ann Arbor Station project. …to apply for final design and construction funding we would need to have completed preliminary engineering to have the information required in the application….a long standing practice that once a federal investment is made in the preliminary phases of work, and the funded work is completed satisfactorily, future phase(s) are generally awarded funding when applications are submitted.

But that is an erroneous assumption, and a frighteningly naive one.  All Federal grants are not the same.  It’s the source that counts.

Where the Money Came From

In President Obama’s stimulus program, formally named the American Recovery and Reinvestment Act of 2009  (ARRA), high-speed rail systems were given a special priority. As explained in this post from the Midwest Interstate Passenger Rail Commission,  the money made available for our Michigan high-speed rail enhancements were not originally designated for Michigan at all, but were part of a large pot of money ($2.4 billion) refused by the State of Florida.  Of this, Michigan received a lucky $400 million.  Most of Michigan’s windfall was prudently invested in improving our rail corridor between Detroit and Chicago (our important Detroit-Chicago Amtrak service).  There were rail improvements in the West Detroit area (signals, repairs), repairs to track along the corridor, and the state was able to buy a section of the track that had been owned by Norfolk Southern.  The freight company had not been maintaining the tracks for passenger service and there were many delays.  The “donation” from Florida helped Michigan to make many repairs and adjustments that will really help this important passenger rail route.  Several train stations were also renovated or, in the case of Dearborn, reconstructed.

Here is how the grant allocation breaks down:

There are several important points here.

• This was a one-time opportunity.  The stimulus program is over.  The rejection of a grant by Florida meant a windfall for Michigan.
• The money for the Ann Arbor station was only for completion of a NEPA assessment.  It was not for any aspect of actual station construction, unlike the other grants to communities along the Detroit-Chicago line.
• As Congressman Dingell warned in his September announcement celebrating the grant award, the High-Speed Rail program (HSIPR) was facing “recission” in the House of Representatives at the time.  This has become reality.  The President proposed $1 billion; the Senate proposed $100 million; the House agreed to $0.00 (and the House’s version prevailed).  (Summary of transportation bill amounts here.)  There is no more money in the program.
• Even if we were to get a Federal grant to build a full station, such grants generally require a 20% matching contribution by a local entity.  For most transportation projects, that 20% of the total has been paid by the State of Michigan.  (And the state has paid the matching amount for the $2.8 million planning grant.)  Here Hieftje seems to be saying that matching money for the train station would be provided by the UM.  Is he hoping to count the money that UM is spending on the parking structure as a “match”?  If so, what is the statute of limitations on that?  Can we use money that UM spends next year to match a grant for a train station sometime in the indefinite future?

It seems that now, as before, we have more questions than answers.

UPDATE: As suggested by the first commenter, I erred by saying the $2.8 million was only for the NEPA assessment.  It was also for some preliminary engineering and planning work.  (But not for any construction.)  We’re still talking documentation.

SECOND UPDATE: The impact of Troy’s rejection of its $8 million grant is unknown.  News reports say that the money will be “reallocated” (a Chamber of Commerce spokesman was quoted in the Free Press article  as saying it would go to other states).

Historical note:  See the January 2010 article in the Ann Arbor Observer where Mayor Hieftje suggested that the value of the land might be credited toward the city’s cost of the Fuller Road Station.  That idea has been dropped, evidently.

THIRD UPDATE:  A press release that is undated but was made public on February 10, 2012 announces that the University of Michigan is pulling out of the agreement to build parking at the site of the Fuller Road Station. 

“After months of fruitful discussions, we received new information from the Federal Rail Administration regarding the eligibility of monies for the local match. This information altered project timing such that we could no longer finalize a proposal under the current Memorandum of Understanding,” said John Hieftje, Mayor of Ann Arbor.

Note: Posts about Fuller Road Station and other transportation topics are listed on our Transportation Page.

This entry was posted on December 9, 2011 at 7:19 pm and is filed under civic finance, Sustainability, Transportation. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site.