Where (I Think) The CSX/ILC Deal Stands

It’s important to understand that for Lakeland, as far as I can tell, the CSX deal presents a single potential problem in three parts. That problem is the possible creation of an expanded, multi-track, industrial rail corridor – and all the disruption that would bring – running through the downtown core, where city taxpayers have spent millions to create elegant, livable spaces.

The first part of the equation is the rail hub in Winter Haven, with its location along the rail line that runs through downtown and its longterm plans for container and vehicle-shipping growth. Bill Rufty with The Ledger had a pretty good rundown of the tactical facts surrounding the state Department of Community Affairs’ decision to accept approval of the hub last week. And as I noted before, Kevin Sandridge, at the Florida Mortgage Blog, makes a good faith effort to understand the project and its implications. At his invitation, Chuck and I have commented over there.

While the hub approval is certainly bad for Lakeland, and sets the table for further bad things, it’s not end of the world in and of itself. Call it 20 percent of the problem. The other two parts of the problem are: the second phase of the ILC development, a 900-or-so acre business park; and the state deal that diverts freight trains from Orlando to a line running through west Florida and Lakeland, creating a single freight superhighway for CSX in order to allow for commuter rail in Orlando. The third part is what Paula Dockery and Dennis Ross successfully stopped in last year’s legislative session. I’ve described the entire threesome as state implementation of CSX’s Florida business plan.

I do want to take issue here with something Rufty wrote: Initially, the reports were that the planned Winter Haven rail facility and the commuter rail and indemnification deal were tied together, but CSX officials meeting with The Ledger editorial board earlier this year said the two are not now dependent on each other.

This is, of course, silly. The $500+ million deal to create the freight highway still includes $23 million for “relocation” of Orlando’s Taft Yard operations to the Winter Haven hub. I’ve never heard “relocation” defined. I doubt it’s for renting moving trucks. Instead, I’d be willing to bet it is synonymous with “construction.” Internal emails and documents from throughout this process make it clear CSX and the state consider these things related. I’ll be happy to provide them to anyone who cares to read them. Or you can just take my word for it. They’re related. Why do you think JD argued so forcefully on the floor of senate for the relocation deal?

It is true that CSX has said it will build the rail hub whether or not the Orlando relocation deal happens. But CSX has always maintained, to my knowledge, that Orlando cannot get commuter rail unless the company gets its hub. Please, if anyone can point to any evidence to the contrary, I’m happy to publish it.

Memo to Bill, who is good guy and not the regular Ledger reporter on this story: Just because CSX or FDOT tells you something does not make it true. If it helps their cause to say they’re related, they’ll say that. If it helps to say they’re unrelated, they’ll say that, too.

Ultimately, we don’t know how the remaining 80 percent of the problem will play out. We do know that if Paula Dockery not risked her political career – and some fierce citizens not risked ridicule and hard feelings – to fight the relocation deal last session, we’d be looking at 60 percent of the problem locked and loaded – and the worst 60 percent at that. We’d have no leverage at all and not even a sham rail corridor study to fall back on. The dream of a useful statewide rail system would be pushed further into the future.

As it is, I think events have somewhat overtaken all of this. As I wrote over on Kevin Sandridge’s Florida Mortgage Blog: “Much has changed since this deal was first announced. The most prominent thing is the economy. Supporters of this sold the benefits of this whole package based on 2004-2005 growth rates of vehicle sales and consumer product container traffic and Florida population. I saw the graphs and powerpoints. All of those things have cratered, and gas is plummeting. Who knows if this is a temporary thing, or if Florida really is “over” as the Wall Street Journal reported a while back? But it does seem to me that all of the economic assumptions underpinning this deal – and that goes for skeptics and impact-worriers like me, as well – are [somewhat] out the window.”

Predictions are something of a sucker’s game at this point.

Certainly, all indications are that the Orlando cabal will be back at it hard this year. And now JD has control of the state budget. On the other hand, the budget politics of this are absolutely putrid. What’s the opposite of bail out? What do you call it when you just hand a superprofitable company tax money? A bail-in? At a time when we have at least a $1.5 billion state budget deficit and the principals at my kids’ schools are telling horror stories of funding cuts. And oh yeah, they want us taxpayers to foot the liability for any crash CSX causes. If the dirty trial lawyers [offpsring of one, I can say that] continue to object to this liability arrangement, the deal has a good chance of flaming again.

You can tell how bad the political optics are on this simply by watching the People’s Governor, who is the perfect political weathervane. Everything I hear from people in and around this deal suggests Crist is fairly tight with CSX and very much wants to make this deal happen. And yet, he’s never been willing to stick his neck out for it politically. He knows how it plays when people actually pay attention to it.

At the same time, there’s a very real possibility that Congress and the Obama administration will pump major federal stimulus funding to the states for infrastructure and transit projects. And Joe Biden has a passion for Amtrak.

What does that mean for us? I have no idea. More variables. So keep watching, and don’t believe that everyone has thrown in the towel. The final 80 percent of this problem will live and die with the trial lawyers, budget politics, and how annoyed DCA is at having to swallow the Godawful development order for the hub. They may be just annoyed enough to make it awfully difficult to build on the remaining 900-acres after CSX gets what its hub and sells out.

Creative Commons License photo credit: Chuck Welch for Lakeland Local

2 thoughts on “Where (I Think) The CSX/ILC Deal Stands

  1. Hey Billy – thanks for the link love – and for your kind words. It’s very much a political machine at work – now, as much as it’s ever been. The recent news from Illinois confirms this. Folks would like to believe it’s a problem relegated to the “City of Broad Shoulders,” but they’d do well to keep posted on this blog – as there are definitely issues to watch out for in our neck of the woods.

  2. Hey Billy – thanks for the link love – and for your kind words. It’s very much a political machine at work – now, as much as it’s ever been. The recent news from Illinois confirms this. Folks would like to believe it’s a problem relegated to the “City of Broad Shoulders,” but they’d do well to keep posted on this blog – as there are definitely issues to watch out for in our neck of the woods.

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