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Texas' rural roots and urban future are on a high-speed collision course

GRIMES COUNTY — John Stoneham’s knees don’t work like they used to, and it’s gotten tougher to count the cows roaming his 1,000 acres of land in southeast Texas. Sometimes newborn calves disappear into the tall brush and the 77-year-old can’t find them for days.

Three mornings a week, though, Stoneham still tosses 50-pound feed bags onto the bed of a mud-caked pickup like they weigh half that. Then he steers the truck around soggy patches on the Grimes County farm his family has owned for almost 150 years and fills the cows’ troughs.

“I like raising cattle — I enjoy it,” he said, taking shelter from an approaching downpour in a cluttered shed. “It’s just something I’ve always done, it’s something I know and something I’ll continue to do.”

The farms and homesteads in Grimes County blanket open land that for now is beyond the reach of Houston’s sprawling outer suburbs. The economic momentum and booming population growth that have transformed the state’s largest metro areas are distant phenomena in this and other rural Texas counties.

But all that could change if the bullet train comes barreling through.

Stoneham’s ranch is among thousands of parcels of Texas land that could one day be home to America’s first high-speed rail line. It’s also the site of a likely collision between two of the state’s most dearly held principles: Texans’ right to do what they want with their property and the free market’s ability to solve thorny problems with little government interference.

The outcomes could affect Texans for generations.

Privately owned Texas Central Partners plans to build a 240-mile bullet train line between downtown Dallas and northwest Houston within the next several years. It promises to speed passengers between the two cities in 90 minutes on train cars that travel 205 mph.

Company executives and elected officials in the state say connecting two of the nation’s largest business hubs with a landmark transportation project will further grow Texas’ already bustling economy. Many leaders in Dallas and Houston are on board.

“When you start thinking about doing business in multiple locations — international investors are flocking here,” said Linda McMahon, president and CEO of The Real Estate Council in Dallas. “What this would do for Dallas is it would connect with the port, it would connect with Houston, which is just another great economic charge in the state.”

Texas Central promises to get the $12 billion project done without taking public dollars other than through loans — and vows it will help increase tax revenue for scores of cities, counties and school districts along the route.

“Everything we do, everything we touch is grounded on financial feasibility,” said Carlos Aguilar, Texas Central’s CEO.

Central Japan Railway, the company that developed the technology for the Shinkansen bullet trains that run throughout Japan, is partnering with Texas Central and is eager to get a foothold in the U.S. market. For Texas Central leaders, it’s a chance to complete a showcase project and get in on the ground floor of what they expect will be a massive moneymaking opportunity.

Tim Keith, Texas Central’s president, said there’s lots of interest from investors who have been raising vast sums of money to get big infrastructure projects built in a nation whose new president vows to fix a crumbling network of interstates, bridges and tunnels.

But landowners along the way oppose the rail project for a litany of reasons. Some doubt Texas Central’s claims about how many riders it’ll attract and the train’s broad economic benefits.

Others don’t think a company using Japanese technology and equipment for a privately-owned transportation project should have the ability to use eminent domain to buy up their land.

Texas Central says it will only use eminent domain as a last-case scenario. But its claims that it has the power to do so have already spurred state legislation that aims to stop the project in its tracks. The company is expected to fight those bills.

“The effort to take away a safe, reliable and productive transportation choice runs counter to the values and principles of so many Texans who are clamoring for it,” said Holly Reed, Texas Central’s spokeswoman, in a prepared response to the legislation.

Opponents also don’t see why they should get behind a project that will change the characteristics of their land on its way to benefiting the state’s urban hubs.

“It’s not going to be an easement; they’re just going to cut and run a path through,” Stoneham said, gesturing to Grimes County pastures lined by stands of scrubby, bare trees. “So the place is basically going to be cut in half.”

"In the middle of great access"

In recent years, Texas cities have aggressively recruited corporate headquarters and expansions as a way of luring high-paying jobs and investment to the state. As a result, Texas’ economy has consistently ranked among the fastest-growing in the country.

Of the 10 counties through which the bullet train could run, Dallas and Harris, home to Houston, unsurprisingly saw the highest numbers of new residents during a 26-year period that ended last year. That ballooning population — and the largely open and flat terrain between the two areas — has made a high-speed train connection tantalizing.

The Dallas-Fort Worth metro area has 7.1 million residents, while the Houston metro area has about 6 million. Combined, they account for almost half of Texas’ nearly 28 million people.

“Talking about the fourth- and fifth-largest [regions] in the U.S., it makes it No. 2 behind New York,” Aguilar said. “That’s how important this is.”

The Houston station is likely to be in the Spring Branch neighborhood, about six miles outside downtown. It will be just west of Interstate 610, between U.S. Highway 290 and Interstate 10, where there are now light industrial buildings, empty lots and an apartment building south of the aging Northwest Mall. Texas Central officials see the area as ripe for the kind of redevelopment — hotels, restaurants, condominiums — a station could spur.

The station wouldn’t directly connect passengers to any of Houston METRO’s three rail lines, all of which are miles away. But Texas Central officials tout the proximity to three major highways and METRO’s Northwest Transit Center, a large bus transfer station across Old Katy Road from where the station may one day sit.

Company leaders say the location will give passengers a number of ways to connect to business nodes scattered throughout the city, including downtown, the Energy Corridor and Texas Medical Center.

“We’re in the middle of great access,” Reed said.

Dallas’ station, by contrast, will be just outside of downtown, south of Interstate 30. The station is envisioned as a vibrant, mixed-use gateway between the buzzy Cedars neighborhood and the central business district.

The goal is to also tie it into Dallas Area Rapid Transit’s sprawling light-rail train network.

North Texas leaders hope the station will jump-start development in the southern half of Dallas, which has languished behind its northern counterpart for decades.

“As we put together the terminus, the epicenter is going to change in the city of Dallas,” Mayor Mike Rawlings said. “As I’ve always said, we need to grow south — this is going to be right at the doorstep of southern Dallas and allow us to bring great retail.”

Praying for a better deal

Texas Central said this month that it had secured the ability to survey property owned by more than 3,000 people and businesses. The company also said it has land option agreements on 30 percent of the parcels it needs for the entire project. But it isn’t releasing the number of parcels that could be needed for the line or how much of the 240-mile route is represented by its land option agreements.

Company officials say that’s partly because federal officials are still reviewing the project and the route isn’t finalized. Furthermore, they say, the company wants to protect its proprietary interests from potential competitors.

“What needs to be understood is that the first deployment of high-speed rail in America — in the hemisphere — is highly sought after,” Keith said.

Opponents balk at those arguments.

“We qualify for the unbelievable power of eminent domain, but we don't have to show you our numbers,” is what Limestone County landowner Blake Beckham hears.

He hasn’t let Texas Central or its representatives onto his rural weekend retreat, which he plans to turn into a wedding and event venue. Beckham is a Dallas attorney who has done pro bono legal work for opposition group Texans Against High-Speed Rail. Grimes County Judge Ben Leman is chairman of that organization.

The group argues that Texas Central shouldn’t qualify as a railroad company with eminent domain powers because it doesn’t currently operate a railroad.

Leman said survey permissions and land option agreements the company has secured shouldn’t be seen as signs of support for the project. He said landowners sign such documents out of fear of the company’s claims of having eminent domain authority.

“It’s them signing something they’re hoping and praying would be a better deal than eminent domain,” Leman said.

The opposition argument

Texas Central executives are adamant they’ve approached landowners as neighbors. They’ve hosted information meetings. They’ve emphasized that the train will create maintenance and construction jobs and send tax revenue to communities statewide.

Terry Sanders started out like many rural landowners: adamantly against the bullet train that will likely mean bulldozers for the Grimes County home he and his wife had lovingly built for retirement.

“We were just opposed to it to the 10th degree,” he said. “If they came by, we wouldn’t even talk to them.”

Then a drive to Houston — and a 5-mile traffic backup because of a flipped trailer — changed his mind. Sanders and his wife bought the 7 acres in Plantersville about a decade ago for roughly $10,000 an acre. Texas Central, he said, paid them $25,000 upfront with the option to purchase the land for about twice what they paid, a deal he said was “more than fair.”

But Leman of Texans Against High-Speed Rail said current land prices aren’t fair compensation for what will squash future property value increases from the sprawling development creeping north from Houston. Soon, Leman said, it’s bound to boost land values in Grimes County, too. But if land has a high-speed train running through the middle of it, he fears it’s a much tougher sell.

“We want to facilitate the infrastructure that encourages the best of the growth,” Leman said. “We need a healthy mix of business and residential development. What this project would do is bisect the heart of where a lot of this growth would potentially be.”

Spinoff development ahead

Texas Central executives argue there’s no evidence showing that a rail line decreases property values. They also see a development boom in Grimes County because it will be home to the line’s third station. An exact location hasn’t been announced.

“As you can imagine, we have some ideas on where it could work the best and we’re working towards those solutions,” Reed said.

In 2015, Texas Central released a study it commissioned that estimated the line would spur $36 billion in economic development over 25 years. The libertarian Reason Foundation, meanwhile, predicted this month that the project would leave taxpayers on the hook for billions of dollars because it won’t be profitable.

Some of the high-speed rail bills filed in Austin this week seek to mitigate the negative impacts on land if the project fails. One bill also would have the Texas Department of Transportation and Legislative Budget Board provide an analysis on such matters as the project’s feasibility and impact on property values.

Charles Gilliland, an economist at Texas A&M University’s Real Estate Center who tracks property values, said rural land values have been rising since the 1960s.

But it’s tough to predict exactly if or when rural land values will skyrocket as sprawl from urban areas approaches, he said. It’s also hard to tell how a high-speed rail line would affect rural Texas since there’s no other American predecessor to examine.

“Essentially, everybody over there would like to have a study at their fingertips that would show exactly what the impact’s going to be,” he said. “But to my knowledge, nothing like that exists.”

One thing is clear: Demographers and economists say Texas’ cities and suburbs are swelling, while the proportion of people living in rural areas declines.

“Large cities are good for growth, good for wealth creation and welfare,” said Pia Orrenius, a senior economist with the Dallas Federal Reserve. “That paints a much more negative picture for the future of rural areas.”

Retirement home

That puts people like Stoneham in a tough spot. He wants to pass his land on to his kids — but, he noted, “kids these days don’t seem to want to work out here.”

Stoneham said Texas Central offered him about $900,000 for the roughly 50 acres of his land the company would need — “way too low.”

He thinks his son might be interested in leasing it out to someone else who thinks they can make money running cattle. And one of his grandkids, at least, loves visiting.

He stopped the truck on a small hill, looking out past the tall transmission towers placed on the land decades before, after his father gave a power company easements. Stoneham was working with an architect to build a little house there, where he could live out his days among the cows.

But the house is on hold. It would be right in the bullet train’s path.

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