Mobile city officials will decide a few hours before the brightly lighted MoonPie drops and ushers in the New Year whether they are on board with a financial commitment to bring Amtrak back to the Port City.

City Council members were asked Tuesday to subsidize a local match to a federal grant that passenger rail advocates believe will not cost more than $3 million over three years. The city commitment would not be needed until 2023, which is the year that the service connecting New Orleans to Mobile is expected to restart.

The timing is important. The council needs to vote on whether it will support a financial commitment for Amtrak’s return before Jan. 6, which is the deadline for matching funds to be dedicated toward a federal grant that’s paying for the lion share of the costs. The council’s only meeting before then is on Dec. 31.

“This investment is totally an offset for operational costs,” said Wiley Blankenship, president & CEO of the Coastal Alabama Partnership and chairman of the 21-member Southern Rail Commission that is charged with prompting passenger rail service and pursuing funding opportunities to support its mission.

“It’s Mobile’s decision to make,” he added.

‘Funding’

A rendering of what the proposed train station will look like in downtown Mobile, Ala. The rendering was first revealed during an informational session on Friday, July 12, 2019, at the Arthur R. Outlaw Mobile Convention Center in Mobile, Ala. The city wants to have the station located to the Brookley Aeroplex near the location of a future commercial airport. The relocation, according to city officials, would not alter the rendering of the proposed station. (Drawing by Mott McDonald and including in Southern Rail Commission's presentation on Friday, July 12, 2019).

The council’s finance committee is scheduled to meet at 3:30 p.m. Thursday at Government Plaza to further discuss the financial ramifications of the investment. The council’s potential commitment will serve as a so-called “local match” to a Restoration and Enhancement (R&E) grant through the Federal Railroad Administration to finance the service’s operations.

The city doesn’t have to dedicate money immediately. As proposed, the three-year commitment under what rail commissioners call a “worst-case” scenario -- where annual ridership is around 38,000 people who spend an average of $18.33 per trip – would cost city taxpayers $3 million from 2023-2025. Over five years, the subsidy would rise to $7.7 million.

Rail commissioners, however, are proposing what they believe is a more realistic “conservative” estimate of around 86,400 riders per year who spend an average of $30 per trip. Under that proposal, it would cost Mobile around $2 million to subsidize the train’s operations, and about $5.4 million over five years.

Ticket prices between Mobile and New Orleans haven’t been set yet, but early estimates indicate the fare costing between $25 to $40 for a one-way trip.

Paul Wesch, chief of staff to Mobile Mayor Sandy Stimpson, said the biggest concern for the city is the “method of funding and the schedule of funding” for the project. He said a financial commitment, if authorized by a supermajority of the council – five of the seven members – would come out of the city’s capital budget.

Wesch said the city would institute an annual cap on how much it would spend. As proposed, under the worst-case scenario, the city would spend $725,000 to support the service in 2023, or $339,000 under the conservative estimate provided by the rail commissioners.

City Council President Levon Manzie said the “financial responsibility” for the project remains a concern for city officials. But, he said, the “concept of a train service” connecting Mobile to New Orleans remains appealing.

He also said the commitments toward operations and capital improvements made in Mississippi and Louisiana, are a factor. The New Orleans-to-Mobile route includes four stops in Mississippi: Bay St. Louis, Gulfport, Biloxi and Pascagoula.

“The notion that there would be coastal train service from New Orleans to coastal Mississippi and not include Mobile, I just think that it’s untenable,” said Manzie. “We need to be a part of this service.”

‘Interruptions’

The council’s decision focuses merely on operational costs, and doesn’t include a commitment to other investments that are likely to be associated with Amtrak’s return. The service along the Gulf Coast has been suspended since Hurricane Katrina damaged the rail line in 2005.

An additional $2.2 million will be needed from an Alabama-based source to finance capital improvements between the Mississippi line and Mobile. That money would be matched with Alabama’s portion of a $33 million federal grant awarded in June through the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program. The CRISI money is being used to improve the rail line and get it ready for passenger trains. The line is currently use for freight service by CSX.

An additional $2.5 million could be required to finance the construction of a sidetrack that would connect the main rail line to a future train station at the Brookley Aeroplex. An estimated $3 million would also need to be dedicated for the construction of a new train station located at Brookley where city officials are hoping to relocate commercial air service.

It’s unclear how those investments would be funded. Alabama Gov. Kay Ivey hasn’t expressed much interest in backing the project. In August, Ivey said that her office needed to know the impact of passenger rail service on the Port of Mobile.

Jimmy Lyons, CEO of the Alabama State Port Authority (photo provided by the Port Authority)

Jimmy Lyons, CEO of the Alabama State Port Authority which oversees the State Docks in downtown Mobile, said that the project likely would interfere with freight traffic into and out of the Port of Mobile.

Lyons’ concerns focused on a train station being located in downtown Mobile near Cooper Riverside Park. But in recent months, the train station talks shifted to a new location at Brookley that would connect with a new downtown airport.

Said Manzie, “If the location is now geared toward a Brookley location, those concerns ought to be moot at this point.”

Judith Adams, spokeswoman with the Port Authority, said that concerns about stalling freight service through Mobile remain even if having a train station at Brookley – as opposed to Cooper Riverside Park – is preferable.

“While a location at Brookley would help alleviate rail service interruptions into the Port’s southern terminals, two passenger trains amounting to four transits over a 12-hour period will force freight rail to hold on the limited available side tracks so that passenger rail moves in and out of the city,” Adams said. “This creates both congestion and backups on one of the busiest rail corridors in the Southeast U.S.”

She added, “One of those sidetracks runs behind the International Trade Center and past the city’s public waterfront facilities Any freight rail train holding on this track blocks all freight railroad services into the main port complex. Not only does it block rail shippers in and out of the main port, but it also blocks access into the city’s downtown public waterfront.”

Wesch said that the Stimpson administration, which is pushing to have commercial airline services moved to Brookley from the Mobile Regional Airport in west Mobile, finds it appealing to have a train station located near the airport.

“There is a certain synergy to that,” said Wesch.

‘Compelling’

Rail advocates, meanwhile, are pushing the potential economic impact of having Amtrak services returned to Mobile. A report from the University of Southern Mississippi’s Trent Lott National Center, estimates Alabama would generate $5.48 million from improving the rail line alone. Overall, the total economic impact from increased tourism spending would be $11.9 million for every 1% growth in tourism which rail advocates claim is a very conservative estimate.

“From an economic standpoint and from the numbers of what we have collaborated on, there is a compelling story here for connectivity, tourism from New Orleans to here and vice versa,” said Dave Clark, president & CEO of Visit Mobile who is also a member of the SRC. “And the intermodal connectivity ... it’s an exciting thing to fly and have connectivity by rail.”

Alabama remains the lone holdout on dedicating funding for the project. Mississippi has already committed $15 million and Louisiana has ponied up $10 million on their CRISI matches. Both states are also required finance $3 million each on operations.

A number of cities along the rail line are also investing in train stations.

Wesch said that Mobile would not be able to finance what was required in Mississippi and Louisiana. He said that the capital costs will require an intergovernmental arrangement that includes the city, Mobile County and possibly the state.

“It’s a cobbling together of local funding,” said Wesch. “Thankfully, the total amount of is much less than what Mississippi and Louisiana have to come up with. If the sums needed were what they are (in the two states), the city would not have the ability to assist.”