The terminology is important for reasons beyond its own sake. Being a railroad or not determines whether Texas Central is entitled to use eminent domain as it surveys and acquires property. State law allows railroads and certain other private companies to use eminent domain to seize land for projects in the public interest. But in February, in response to a lawsuit by a landowning couple in rural Leon County, a district court ruled that Texas Central did not have that right. The firm is “not a railroad or interurban electric company,” the judge stated, because it hasn’t laid track or run a train yet.
Texas Central contends that it is indeed a railroad, and points to an earlier court decision from Harris County where a judge said so. The company says it would prefer to acquire privately held land through amicably struck commercial sales, and has already secured more than 30 percent of the land in its preferred right-of-way. But in the all-but inevitable event that it can’t seal 100 percent of those deals, it plans to keep fighting the Leon County case in court to secure those eminent domain rights, Holley Reed, the managing director of external affairs at Texas Central, told CityLab. [...]
But the Texas Central project differs from California’s high-speed rail in many ways. Chiefly, it is an investor-backed undertaking, not a publicly subsidized project. Texas Central has said that it plans to spend more than $15 billion to build and run its planned 240-mile route from Houston to Dallas, in partnership with Central Japan Railway, which will help implement the shinkansen technology. Construction won’t begin until funding in full has been raised among investors, the firm promises (one bill moving through the Texas legislature would codify that promise in law). Citigroup and Mitsubishi are advising its intricate financing structure, and Renfe, the Spanish rail operator, has signed on to run the trains. Texas Central company might apply for federal loans, but the project won’t be funded by state or federal grants. [...]
It’s hard to dispute that the project is indeed risky in some basic respects, though. The United States has never seen a privately operated high-speed rail line; Florida’s partially opened, investor-backed Brightline project in Florida—now dubbed Virgin Trains USA—is the closest example, but it has the major advantage of using an existing right-of-way and is still a ways from judgment. And it’s true that few rail lines around the world operate successfully on ticket sales alone. (Even Japan’s rail systems, which are unusually profitable, make a big chunk of proceeds from shrewd station planning and advertising.) In the U.S., the best-performing passenger train routes link the densely packed cities of the Northeast Corridor, which have extensive public transit networks. Neither Houston or Dallas particularly qualify on that front. “This is Texas. People have pickup trucks and want to drive cars,” Workman said. “This is the recipe for the worst, most colossal failure financially.”
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