CSX Deal: Relic of a [For Now] Bygone Era

In this economy, CSX will not lightly walk away from more than $600 million in cash and system improvements, liability or no. FDOT probably still wants to hand that money over to the company. In fact, it’s already done so to some degree in the form of ongoing overpass improvements in north central Florida. Buddy Dyer is out begging for $20,000 in legal expense money so lawyers can try to figure out a way around the senate. Democracy in action. (Funny that with all the money spent on John Thrasher and other uber lobbyists during the session, Dyer is reduced to panhandling for this. You would think GrayRobinson would just pick it up for him.) Anyway, this isn’t over. But it’s worth taking a moment for some post mortem thoughts before this deal reveals itself as the undead zombie vampire that we fear it might be.

1) First and foremost, this plan, it seems to me, represents the apotheosis of the Florida land boom mirage of the middle of this decade. Everything about it screams early 2005. It’s the product of 2005 land values, hammered out by an imperial, sunshine-be-damned Republican governor who got rich through the classic “conservative” paths of inheritance and developer welfare and by John Mica, a corporate socialist Republican congressman who raised tons of campaign cash from Big Freight Rail and later was against stimulus spending before he was for it. It relied upon perpetual 45 degree upward growth projections for Florida’s population and international shipping container traffic, not to mention contributions from local governments that signed on when they were artificially flush with property boom tax money. CSX and company dressed up all of this in the language of progressive priorities like transit and emissions reduction – “greenwashing,” it’s called. The crash of the housing bubble, and all that ensued, eviscerated much of the underlying logic of the plan. The deal would have committed itself — and our money — to a model of Florida that no longer exists. The shape of the next plan will depend largely on the type of Florida that emerges over the next few years.

2) The politics and future of Florida rail: Fascinatingly, opposition to this deal did not break down along party lines. As Dan Tracy wrote recently in the Orlando Sentinel, senators had many and various reasons for opposing the deal. But I would suggest that grassroots opposition broke down into roughly two camps – those who like rail and transit, but hated this specific deal, and those who just generally consider rail a waste of money. I’m in the former camp. I always considered this plan harmful to the long-term prospects of rail throughout Florida because of its cost, geographical patterns, and commitment to use CSX’s lines on CSX’s usurious terms. Those people who claimed it was a stepping stone for other rail systems never, ever explained how that could be.

Many props to the St. Pete Times editorial page for recognizing this in a recent editorial:

The political and business leadership in Tampa Bay can learn a few things from the failed effort — one they foolishly embraced in hopes of securing support from Central Florida for bay area rail down the road. Tampa Bay sent the wrong message to CSX about how much this community would be willing to pay for similar use of the freight corridor. The trick for Tampa Bay was not necessarily to see SunRail succeed at any cost, but to have its terms be reasonable enough to sell the public on rail in Tampa Bay. That is going to be difficult enough under the most favorable terms to the public.

Precisely.

Indeed, TBARTA has put together what seems to me a reasonable, well-conceived plan that lays out a series of multi-modal projects and projected costs – starting with light rail [as Orlando should have] – and making it clear that it all requires publicly approved funding. Tampa and Hillsborough County may place a sales tax referendum on the ballot in 2010 to fund a light rail program. The Orlando plan had no such ongoing funding base, just a commitment from local county governments to cough up money they don’t have, forever.

Those, like me, who opposed this deal more or less from the left, recognize that transit does not pay for itself any more than roads do. We, the citizens, must decide to pay for it. I personally would vote for the Tampa rail tax in a heartbeat. I would also support some sort of statewide gas tax or sales tax dedicated solely to mass transit, with an appointed board to disperse money to projects designed with public value in mind. Hell, I would support placing a ban on construction of new road capacity for 10 years and channeling all state capacity spending into bus, rail, and car-sharing service. I’d spend much more money on rail and integrated transit plans, if the plans make sense and are designed with public benefit in mind. I’d even support kicking in money to CSX if the company acted like a partner, rather than a dictator. For me, it’s a question of value, not cost. I saw very little value, and much active harm, in this deal.

All of this will require reform of FDOT, an organization that basically functions right now as a risk free, interest free investment bank for development and business interests. On top of that, it is, in the words of one Tallahassee reporter I spoke to, “institutionally opaque.” Opaqueness and billions of dollars almost without exception make a bad mix. Someone, hopefully with a title that sounds like inspector general or St. Pete Times reporter, will now crawl down DOT’s throat over this deal and identify just how much money it may have already spent and how legal its behavior in this deal may or may not have been.

A reformed DOT, backed by a new passenger rail friendly Obama administration, could begin to challenge CSX rather than treat the company as a senior arm of the government. I voted against high speed rail twice (Sorry, Doc) because I didn’t think it belonged in the constitution. I still don’t. I remain agnostic, but convinceable, on the actual idea. But one major potential benefit would be the construction of a new, publicly-owned rail corridor along I-4, which CSX could not control. There’s a reason why CSX fiercely backed Jeb Bush’s effort to repeal HSR in 2004. Once the state commits to using I-4 to connect Orlando and Tampa, rather than the A/S line, CSX begins to lose its lucrative grip on the future of rail policy in the state. Depending on engineering realities, I’d like to see a freight line accompany the passenger line. Tie it into the A and S-line. Railroad law is complex, but I think CSX would have to allow the state to do that because of anti-trust rules. I also think it would have to allow rival Norfolk Southern to access that line through the A and S lines. [I could be wrong on this, though.] In any event, think of rail line as oil. It’s a scarce commodity that becomes more valuable the less of it there is. With the right carrots and sticks, maybe CSX could be enticed/bullied into using I-4 and freeing up the A/S line for true commuter rail for Orlando, Lakeland, and Tampa.

Of course, any plan of that sort would certainly run into opposition from the “Axe-the-Tax” type folks, who acted as enemies of our enemies in this deal. And their objections are legitimate. Building true transit infrastructure would cost an enormous amount of money and would certainly require some kind statewide -and probably local – transit tax. That means referenda – or political leaders who are willing to get unelected over such a deal because its long-term benefits are so good. It would take guts. Supporting the current CSX deal brought that same level of political risk, but with no long term benefit. Thus you have the result.

3) Lakeland’s issues: I took a shot recently at Lakeland city government – minus Justin Troller and Howard Wiggs – over the letter it sent urging state senators to dismiss any communication from Lakeland-area folks who opposed the deal. The “official” position was that the city supports the deal, as long as rerouting language accompanied the final bill.

Anyway, it’s one thing to write a letter saying that people in our community have strong feelings about this deal, which we respect, but think are best addressed by supporting this deal. I have no problem with that. But don’t say – without any public discussion in advance of the letter – that some of your citizens “have conveyed the erroneous impression that the City of Lakeland is opposed to the passage of Senate Bill 1212” – and please contact the city government only for the real scoop. That’s insulting and anti-democratic. It suggests that government doesn’t care what the people have to say and discourages public participation. Coupled with the Chamber’s literal begs for CSX deal support, this whole process has not been official/aristocratic Lakeland’s finest hour.

While I don’t have any real gripe – in concept – with the city government trying to build rerouting into the deal, it’s worth noting that this approach didn’t yield any tangible results for the city to lose.

If the rerouting – and the billion or so dollar price tag accompanying it – had been added to the deal contract, and thus enforceable in court, the city would have stood on firmer ground in warning that opposition to this deal might cost us. Likewise, if the city or DOT had secured any public hint that CSX was willing to use the Van Fleet line, they could argue that Lakeland deal opponents are taking a risk. But neither of those things happened. Instead we got meaningless legislation and a taxpayer-funded study which was then ripped away because it was only a bargaining chip.

Whatever happens in this deal, freight traffic through Lakeland will only be rerouted if the big regional powers to our east and west realize it benefits them to change the flow of freight in the state. (See the I-4 freight line idea.) No one in an executive position of power in state government cares what happens to Lakeland, per se. I think a number of people in such capacity care about I-4 corridor connectivity and development. In the best case scenario, by staking this deal in its ghoulish heart, we have kept the state and regional powers from committing to a flawed and anti-transit model and given them space to come up with something much better. Worst case scenario, they do this anyway in an underhanded end run around the senate. In that case, we’ve lost absolutely nothing and have hung a political risk around the necks of supporters.

4) My goodness, it is quiet over in Haven blog land. Surely Bob Gernert wants to insult/sic the authorities on us some more. But he’ll have to step up his game if he wants to match the “forces of evil” / “knuckledragging Neanderthals” smack coming out of Orlando.

And there you have it – for now. I look forward to writing about new subjects, though probably not as much as you look forward to reading about new subjects. But thanks for following this.

10 thoughts on “CSX Deal: Relic of a [For Now] Bygone Era

  1. “In this economy, CSX will not lightly walk away from ($432 million) in cash and system improvements, liability or no.”

    On what information are you basing this opinion?

  2. “In this economy, CSX will not lightly walk away from ($432 million) in cash and system improvements, liability or no.”

    On what information are you basing this opinion?

  3. Little confused that I seem to be interrogating myself about what I wrote without remembering doing so. It’s a like a scene from Fight Club.

    Anyway, I would describe that statement as informed conjecture. I do not have a source telling me that specifically. Rather, it’s like saying, “Tim Tebow is a bull, and he’s going to run the ball relentlessly against Tennessee this year.”

    I thought it would be clear that my first line was written in that spirit, but apparently not. I probably should have said, “I think, in this economy, …” To be clear, I have no firsthand information from a source saying CSX will not easily walk away. I could be wrong, though I doubt it. I’ll acknowledge it if that proves to be the case.

    But feel free to sue. :)

  4. Little confused that I seem to be interrogating myself about what I wrote without remembering doing so. It’s a like a scene from Fight Club.

    Anyway, I would describe that statement as informed conjecture. I do not have a source telling me that specifically. Rather, it’s like saying, “Tim Tebow is a bull, and he’s going to run the ball relentlessly against Tennessee this year.”

    I thought it would be clear that my first line was written in that spirit, but apparently not. I probably should have said, “I think, in this economy, …” To be clear, I have no firsthand information from a source saying CSX will not easily walk away. I could be wrong, though I doubt it. I’ll acknowledge it if that proves to be the case.

    But feel free to sue. :)

  5. Ack. I think I may have misread the comment slightly. I base that on common sense. $432 million is a lot of money. Companies are in the business of making money. Free money, in a terrible economy, is free money. I base it on that, mostly.

  6. Ack. I think I may have misread the comment slightly. I base that on common sense. $432 million is a lot of money. Companies are in the business of making money. Free money, in a terrible economy, is free money. I base it on that, mostly.

  7. Billy –

    #1 – You’re arguing with yourself; and
    #2 – Free money in any economy is free money. I wouldn’t throw it out of bed for eating crackers.

  8. Billy –

    #1 – You’re arguing with yourself; and
    #2 – Free money in any economy is free money. I wouldn’t throw it out of bed for eating crackers.

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