Texas Central Partners came out with a "very important study" on Thursday morning that declared that the private company's plan to build a Houston-to-Dallas bullet train will bring big money to the entire Lone Star State.
If things go according to plan, Texas Central Partners officials say that by 2021, they will have a Houston-to-Dallas bullet train line (Japan Central's N700 Shinkansen) toting passengers between the two cities at speeds of up to 200 mph within 90 minutes. Critics of the high-speed rail project have maintained that the bullet train will benefit people who live in Houston and Dallas while those in the rural counties will lose their land through eminent domain without getting anything out of it, as we wrote in our August 20 cover story, "On the Line."
But this new study released by Texas Central on Thursday morning is a bid to show that everyone in Texas will win with the bullet train, since it's estimated the project will pull in about $36 billion in "economic benefits" over the next 25 years, according to a press release by Texas Central. The study, conducted by Insight Research Corp. of Allen, predicts that the project will have “substantial and long-lasting” economic benefit to the state.
“Texas Central’s high-speed rail project will have a substantial and long-lasting positive impact on the state’s economy. It not only will help alleviate growing congestion on crowded roadways but also give the state additional tax revenue for its purposes and projects," Texas Central Partners CEO Tim Keith stated, according to the release.
We were offered a phone interview with Keith this morning. While we were waiting on his phone call, we asked company spokeswoman Sophia Reza if we could get a copy of the actual report while we waited on Keith. Within four minutes of our request for a copy of the study itself, we got a brief email from Reza informing us that Keith was no longer available by phone, but would gladly answer our questions via email. Despite emails and phone calls to Texas Central today, as of this writing, the company has yet to send us a copy of the actual report it cites in its press release today. (
We'll post a copy here if we ever get it. *See update below)
The first thing Texas Central highlighted in the release summarizing the report is the possibility that the company will pay "nearly $2.5 billion in tax revenue to the state, counties, local municipalities and school districts between now and 2040" because of the investment on the line. Texas Central also reiterated once again that it does not plan on taking federal grants for construction or public subsidies for operation. After going through the usual spiel about tax benefits and how the project won't be federally funded, the release got down to the nitty-gritty and summarized the details of how exactly the high-speed rail line will have a $36 billion economic impact. For one thing, the $36 billion includes the $10 billion that Texas Central plans on spending on the project's design and construction, according to the release.
The study estimates the project will create about 10,000 jobs per year for years while the system and maintenance facilities are being built. Once the line is up and running, the study projects, there will be about 1,000 permanent jobs for employees along the route, adding up to a payroll of about $80 million, according to the release. The study also predicts there will be about 4,000 jobs indirectly created as Texas Central and its employees spend their money and put it back into the state economy, according to the release.
The study also claims that "significant" retail, residential and office developments will spring up around both the Houston and Dallas rail stations, which, you know, makes sense. Texas Central also announced plans to invest more than $1 billion in Grimes County as it is slated to be the site of a Brazos Valley Station to be located "somewhere between Bryan/College Station and Huntsville" that, according to the release, "could attract retail and large-lot residential development."
That nod to Grimes County is interesting since the people in that county haven't exactly been thrilled with the idea of the bullet train running through their area. Officials in most of the rural counties between Houston and Dallas have spoken out against the project, but Grimes County Judge Ben Leman has been a particularly vocal opponent of the project. Leman contends that the high-speed rail line won't benefit people in Grimes since rail tickets will be priced competitively with airline tickets, placing the bullet train out of reach for many residents. Plus, he says the bullet train will only further isolate the county by getting in the way of highway expansions that local officials have been counting on to finally connect the county with Houston.
But despite the criticism, Texas Central officials are pushing ahead. They've raised about $75 million from Texas-based investors so far, so they need to get only about $925 million more to be good to go. Representatives have said the plan is to start construction in 2017.
*Update 5:00 p.m.:
After we requested a copy of the study that the press release was based on, Texas Central acquiesced. Sort of. Spokeswoman Sophia Reza sent over an email that stated that the attached document was the one we requested. The thing is, the attached document was a six-slide PowerPoint, not the independent study conducted to show the economic benefits Texas Central's project will bring to Texas.
So we didn't get the actual study, but we did get the "economic impact report summary." Here's what we learned from the overview:
The study defines economic impact as the benefit to the general economy of the State of Texas, shown as a multiplier on all new capital and operating expenditures of the proposed high speed rail infrastructure and operations, plus that of the planned private development adjacent to the HSR stations.
The actual report produced by Insight Research Corp. is titled "Texas Central's High Speed Rail Corridor and Related Private Development Houston to Dallas/Fort Worth, Texas; October 13, 2015."
The company calculated the tax rate to determine the possible tax revenue based on the rates in effect now. Methods for tax rate regulation were pulled from the Texas Constitution and the State Tax Code.
The direct number of jobs added to Texas was calculated based on Texas Central's assumptions. The number of indirect jobs added was based on "geographically specified U.S. Bureau of Economic Analysis multipliers."
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SHOW ME HOW
Economic impacts shown in private development are based on assumed third-party developments near the rail stations.
So, we didn't get the actual report, but we did get a mildly interesting slideshow. Plus, every slide was marked "private and confidential" which made us feel a little fancy. Anyway, here's the document:
If we ever get the actual report we asked for we'll be sure and update.