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How ‘Charlotte’s Grand Central Station’ got stuck

This was supposed to be the year construction launched on perhaps the most important public project to hit uptown Charlotte in years: a $150 million-plus plan to demolish the Trade Street Greyhound station and replace it with a modern transit hub anchoring a 23-acre office, residential and retail district.

But after more than a decade of planning, state officials leading the Gateway Station project still haven’t secured the money to pay for it or the consent of the railroad company that owns the tracks.

“It’s languishing,” said Ron Tober, the former Charlotte Area Transit System chief who helped launch the concept. “I still think it’s a good idea.”

He said city officials decided early on to let the state take the lead on the project, given the N.C. Department of Transportation’s strong relationship with Amtrak and the railroads.

State officials say they didn’t drop the ball, but acknowledge they misjudged how much public money it would take, as well as how hard it would be to get the sprawling project off the ground.

“We remain very, very interested in an uptown Charlotte station,” said Paul Worley, director of the DOT’s rail division. “It’s a location that we desperately want to have. It’s just a very complex project.”

The Grand Central Station-style plan would combine Amtrak and Greyhound service, eventual commuter rail from Lake Norman, and the city’s planned east-west streetcar expansion – all at one site. It could also help accommodate future transit lines to Charlotte Douglas International Airport.

City buses also would use the station – possibly docking at a below-ground depot.

A lot is riding on the long-awaited project, proponents say.

Without the station, there’s no uptown terminal to accommodate commuter trains CATS hopes to run from the Lake Norman area.

And the DOT has already placed a $23.7 million bet on the concept, buying 23 parcels along Norfolk Southern-owned tracks running through Third Ward and Fourth Ward. Planners envision privately-developed offices, shops and residences along the tracks near the station.

Charlotte leaders believe the station project can provide the same kind of spark as the Lynx Blue Line, which spurred more than $1 billion in development south of uptown.

One early estimate said the Gateway Station project would bring an estimated 1 million square feet of mixed-use properties and 11,000 new residents, turning a sleepy sliver of uptown into a bustling urban hub.

“If you look at cities like Chicago, these (rail stations) become major employment centers because they’re the terminus of commuter lines,” said Michael Smith, head of Charlotte Center City Partners. “This is an important regional asset.”

Freight vs. passenger trains

Current cost estimates aren’t available, but previous studies have said the station and nearby track improvements could cost anywhere from $150 million to $206 million.

Local officials had thought federal grants and money from Mecklenburg’s half-cent sales tax for transit could help get the project built.

But federal transit money has dried up. And a slowdown in consumer spending in recent years has hampered sales tax collections, leaving CATS facing a $5 billion shortfall for the 2030 transit plan that includes the Gateway Station.

The state is directing the project, but has committed little state money to it. The DOT has budgeted $600,000 for preliminary track engineering and $225,000 for preliminary engineering on the station itself.

Gov. Pat McCrory last year signed into law a new system for prioritizing transportation projects.

The new system takes effect in July; Worley said DOT hasn’t submitted Gateway Station for consideration because the agency must figure out how much the project will cost in today’s dollars.

The state is working with Norfolk Southern on that, but Worley said the process could take up to 18 months. The two sides met this month, he said, and agreed that the rail company would secure private consultants to do the modeling; the state would pay for it.

The railroad company is concerned about overloading its tracks with new train traffic.

About 30 Norfolk Southern freight trains a day go through the corridor. A 2009 study prepared by CATS said the new station could eventually attract 38 Lake Norman commuter trains each day.

With the new intermodal shipping facility near the airport also expected to increase Norfolk Southern’s freight traffic, the rail company is taking a wait-and-see approach on the station project.

“We have no objection in theory to the presence of the Gateway Station,” company spokesman Robin Chapman said. “Norfolk Southern is open to the idea provided there is sufficient capacity to handle both current and anticipated growth in both freight and passenger trains.”

Tober, the former CATS head, predicted tough negotiations ahead with Norfolk Southern. Railroads, he said, “are not fond of passenger trains getting in the way of their freight trains.”

Struggling with setbacks

Getting approval for major track improvements near uptown has already proven difficult.

After the recession, the state secured $123 million in federal stimulus money for track projects near uptown, including a freight tunnel. The tunnel was designed to decrease traffic conflicts between east-west and north-south freight and passenger trains.

But last fall, DOT officials said they shifted that money to other rail projects across the state, including Raleigh’s new $73 million downtown station. Worley said DOT moved the money in part because the agency had not reached an agreement with the Archer Daniels Midland flour plant straddling the rail line near the Brookshire Freeway.

“It’s certainly not what we had hoped for,” Davidson Mayor John Woods said of the state’s move to reallocate the money away from the track improvements. He heads a task force seeking support for the commuter rail line to Lake Norman.

Tober said Charlotte officials have privately expressed to him their frustration about the station’s slow progress. Asked about that, Deputy City Manager Ron Kimble said the state holds the reins, and the city is eager to “figure out our game plan” with DOT.

Also unclear is the role of the Houston-based Hines real estate firm, which announced in 2012 that the DOT had selected it as “master developer” to put the Gateway Station plan into action.

But Worley said the state has made too little progress on track modeling and preliminary engineering to let any development proceed. Rumors have spread locally that Hines dropped out of the project, but Worley said the company remains involved.

A Hines spokeswoman declined to comment.

Waiting for progress

So, what we’re left with is this:

The state wants to build the station, but doesn’t have the money or Norfolk Southern’s agreement to use its tracks. CATS wants it built, but is waiting on the state.

Norfolk Southern’s in the driver’s seat, but isn’t saying whether it will sign off. And the ADM plant could literally stand in the way of the Lake Norman commuter line, even if the money and agreements fall into place.

Speaking of which, state and local leaders say the best hope of getting it built today rests in a public-private deal in which a developer builds the station in exchange for the right to develop the properties around it.

Worley said officials had hoped such a deal could underwrite the project without taxpayer dollars. He remains hopeful, he said, but the work so far “reveals otherwise.”

“We’ll work and adapt to see what we can provide at a reasonable cost on the public budget,” he said.

New legislation would be needed to let the DOT do a public-private partnership. Huntersville Mayor Jill Swain is pushing for it. She dreams of a partnership deal to tackle both the Gateway Station and the Lake Norman commuter line.

“While there have been some lapses in progress,” she said, “I think those lapses may turn out to be good for us.”