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Firm Claims Train Will Have $36 Billion Impact

The private firm trying to build a bullet train between Dallas and Houston has released a study claiming it would pump more than $30 billion into the state economy over the next 25 years.

The Japanese Shinkansen is a high-speed trail used by JR Central in Japan. A private company is planning to build a rail line between Dallas and Houston using the same trains.

*This story has been updated throughout.

A proposed bullet train between Dallas and Houston could pump more than $36 billion into the state economy over the next 25 years, including more than $2.5 billion in local and state taxes, according to a study commissioned by the private firm developing the project.

Texas Central Partners hopes to transport passengers between the two cities in less than 90 minutes beginning in 2021. The company expects to spend $10 billion on the initial design and construction of its 240-mile system but believes that impact will be compounded, largely by development around its three stations and the hiring of thousands of workers.

While the project has drawn strong support in Houston and Dallas, many communities in between have questioned whether the train would bring them any benefit. Texas Central CEO Tim Keith said Wednesday he hopes the study by Allen-based Insight Research Corporation will help address those concerns.

“It’s a substantial and long-lasting impact on the state’s economy but really, more importantly, it’s a lasting impact on each community that we will be engaged with,” Keith said.

Dallas and Houston would likely see the most private development from the bullet train. The study predicts a station in each city will draw millions of dollars in private development, including high-rise office buildings, retail development and thousands of new residential units.

Texas Central is planning a third station in Grimes County to serve the Brazos Valley region, including College Station. Grimes County alone will see more than $1 billion in economic impact through the combination of the company’s investment and the development it spurs, according to the study.

“We’re hoping to make a meaningful impact on their community,” Keith said. I think the development would be well beyond the footprint of Texas Central’s investment.

Texas Central has seen some of its strongest opposition in Grimes County, where commissioners unanimously approved a resolution opposing the project in June. County Judge Ben Leman is among the founders of Texans Against High-Speed Rail, a group that formed earlier this year to derail the project. Its president, Kyle Workman, said last month that the bullet train remains a boondoggle destined to fail.

“There’s a significant difference between the company’s view of this project, and most of the surrounding public,” Workman said. “There’s not been any compelling arguments made that this will be financially viable."

Texas Central has said it has no plans to take public funding to cover the system’s operating costs, though it has not ruled out federal loans designed to provide low-interest financing for large transportation projects. The company has partnered with Japanese train operator JR Central to debut that company's bullet train technology in Texas. About half of Texas Central’s funding could come via a loan from the Japanese Bank for International Cooperation, a state-owned entity in that country designed to help finance projects that encourage exports.

The company expects to hire 10,000 jobs a year over four years of construction. After that, Texas Central predicts a permanent workforce of about 1,000 employees.

Along with the stations, Texas Central is planning for maintenance centers every 30 to 50 miles to maintain the track system, Keith said. Each center would employ 12 to 24 people.

Because it’s a private entity, the company is expecting to pay property taxes to cities, school districts and other taxing entities along its entire line for its tracks, maintenance facilities and stations, as well as state and local sales taxes. That’s expected to total $2.5 billion through 2040, according to the study.

Despite Texas Central’s rosy predictions, many residents and officials remain skeptical of the company’s plans. While efforts to kill the plan during this year’s legislative session failed, critics vowed to continue the fight into the next session in 2017.

"We feel very confident going forward we’ll have a much better run at it," Workman said last month. “We’re going to continue to galvanize support in Dallas and Houston and areas in between."

Editor's note: The original version of this story reflected a Texas Central study that found an economic impact of more than $30 billion. The company later provided the Tribune with an updated version of the study that found an economic impact of more than $36 billion.

Disclosure: The Texas Central Railway is a corporate sponsor of The Texas Tribune. A complete list of Texas Tribune donors and sponsors can be viewed here.

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Economy Transportation High-speed rail