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The Good, the Bad, the Texas High-Speed Rail Line

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texas high speed rail line

The Good, the Bad, the Texas High-Speed Rail Line

By Duke Dennis

Brady Redwine of Texas Central Partners (TCP) recently addressed a group of Texas A&M real estate professionals about the high-speed rail line where he highlighted:

  • TCP is currently in the land acquisition phase of their project.
  • The total project cost will be between $10 and $12 Billion.
  • It will take less than 90 minutes to travel from Dallas to Houston and vice versa traveling at speeds of up to 200 miles per hour.
  • Construction is scheduled to begin in late-2017.
  • Rail line is scheduled to be fully operational by 2022.
  • Upon opening the rail line will employ 1,000 full-time workers.
  • Each train can carry 400 passengers per ride.
  • Trains will leave every 30 minutes during peak hours and every hour during off-peak hours.
  • Starting and stopping stations will be located proximate to public transportation (i.e. Dallas Area Rapid Transit (DART) and Metropolitan Transit Authority (METRO Houston))

texas high speed rail line

The positive implications of the rail-line range from new development, to increased tax revenues, increased tourism and offering an alternative mode of transportation.

There are a couple of proposed sites for the start/stop rail stations in Dallas, but the most popular, according to public support, is Union Station, just northwest of the Cedars.  If the rail-line were to go to Union Station, the demand for land to develop and re-develop would sky-rocket instantly as travelers would want to live close to their new mode of transportation.  Another positive of the potential redevelopment would be the increase in tax revenues experienced by the areas adjacent and near to the new rail station.  With new developments going up to be close to the rail line, property values and subsequently property taxes would rise.

According to the TxDOT, it is estimated that nearly 50,000 Texans travel back and forth between Houston and Dallas-Fort Worth at least twice per week.  The volumes of those traveling, coupled with changing views on airline travel are leading to support for the rail line.  Airlines are becoming more and more of a hassle for passengers.  Long security lines and the need to arrive multiple hours before the flight are prompting passengers to look for alternatives.  The rail-line will offer weekly travelers a viable alternative to both driving and flying.  Given the time to board and travel, the rail line will be quicker than that of both cars and planes.  The “alternative form” of travel also applies to the fact that the rail-line will use electricity, as opposed to gas or coal-power, as its form of energy.  Making this a faster, clean and green rail-line.

Despite the potential positives, landowners are concerned that their land could be negatively impacted due to eminent domain.  To calm these concerns, TCP is going out of their way to avoid eminent domain to access land for the rail line’s use, but rather use land contained in, or adjacent to, previously existing easements for the rail line’s path.  In addition, the technology being used for the train has been refined over the past 50-years to operate quietly, use low amounts of energy and produce low amounts of carbon dioxide, which will further reduce the impact on landowners’ properties.  For comparison, the bullet-train can hold up to 400 passengers, the same as a Boeing 777, but consumes 1/8th the energy and produces 1/12th the carbon dioxide.  These advances in the technology will mean the line will not burden those living nearby with any pollution, whether it is noise pollution or environmental pollution.

As a native Texan, Texas A&M Aggie and resident of Dallas, I am very interested to see how the rail line plays out, especially as the line will relate to future commercial real estate development opportunities.  No doubt real estate developers and investors will be brainstorming on how to best develop and invest in projects/properties in and around the future rail line.  Metropolitan Capital Advisors will be ready to advise its clients on financing strategies as development around the rail line evolves.

The author, Duke Dennis, is a Senior Analyst in the Dallas office of Metropolitan Capital Advisors.  Duke can be reached at ddennis@metcapital.com (972) 267-0600.

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