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Texas high-speed rail project faces fight over eminent domain

As far as David Risinger Sr. is concerned, just because a company calls itself a railroad doesn’t make it one.

Especially, he said, when the company in question, Texas Central Railroad and Infrastructure Inc., didn’t exist until 2012 — and to this day owns no depots, locomotives, tracks or ties.

That’s why when Risinger, who owns a 220-acre farm near Ferris — about 25 miles south of downtown Dallas — was contacted by a land consultant representing the high-speed rail company who was seeking permission to enter his property for a survey, he refused.

Texas Central Railroad and Infrastructure, which is trying to buy up land for a proposed high-speed rail line between Dallas and Houston, then filed a lawsuit alleging that Risinger, 81, had no right to stand in the way of the project.

That lawsuit and more than 30 others filed in counties up and down the corridor are the latest in a series of legal moves that have raised eyebrows along the proposed Texas Central Railway route.

“They said I’m costing them millions of dollars and the project was so big that it just could not be stopped,” said Risinger, whose family has raised cattle and grown cotton, corn and other crops on their Ellis County property since 1892. “I want to know who gives a private company the right to come and take my property — for their profit.”

The courthouse drama is only part of the activity.

Texas Central also is gobbling up purchase options on land along the route, offering property owners upfront payments equal to a percentage of the purchase price in exchange for their cooperation. The options give the company until December 2019 to decide whether to buy the land outright and pay the owners the balance.

A handful of property owners have accepted the offers, officials on both sides of the issue say, although the precise number cannot be determined by public records.

The land rush is reminiscent of the early days of a big oil and gas play, with property owners receiving mineral rights bonuses whether or not the explorer actually drills a well on or near their land.

Except this time, the payoff isn’t black gold bubbling out of the soil — but instead a $12 billion to $18 billion, Japanese-style bullet train.

Eminent domain

In its quest to accumulate land, the company cites a state law dating to 1876 that allows a railroad to take private land in Texas for the public good, even if the railroad itself is a for-profit, private company. Such laws have been used for decades by electricity providers, river authorities and oil and gas pipeline concerns to acquire property through eminent domain.

But Risinger and about three dozen other property owners situated between Dallas and Houston who have been slapped with similar lawsuits argue that the law was never intended for a bullet train.

The lawsuits are just the latest twist in the effort to build what could be the nation’s first truly high-speed rail line. Using technology from Central Japan Railway Co., trains capable of traveling 205 mph would leave stations in Dallas and Houston about every half hour.

At that speed, it would be possible to travel between Texas’ two largest metro areas in about 90 minutes, including one intermediate stop near the unincorporated Grimes County town of Roans Prairie, east of Bryan/College Station and west of Huntsville.

Texas intrigue

The bullet train project has become a twisted tale of Texas intrigue.

People on both sides agree that the issue of whether high-speed rail is a legitimate use of eminent domain will likely be a flash point during the next legislative session, which begins in January.

And with the company’s self-imposed deadline of 2017 to begin construction on the rail line looming, both supporters and opponents of the project are unsure of how the whole thing might play out.

Peter LeCody, president of Dallas-based Texas Rail advocates, said a recent decision by a federal Surface Transportation Board to not take jurisdiction of the project and instead let the issue of eminent domain be decided within Texas makes the project “a coin flip.”

“By making this an intrastate railroad, Texas Central Railway may be dealing with the future political whims of the state Legislature,” said LeCody, a longtime supporter of passenger rail expansion in the area.

Local officials in several counties are joining forces to defeat the project. Grimes County commissioners last month approved a new regulation requiring anyone wishing to build a high-speed rail line across a county road to first provide proof that they have eminent domain authority under state law.

The requirement is similar to rules applied to other entities wishing to cross county roads, including utility companies and even farms and ranches, County Judge Ben Leman said.

No delays

Despite the opposition, company officials say they’re on target to begin running the futuristic trains in 2021.

Tim Keith, chief executive of Texas Central Partners, the parent company developing the rail line — and which includes Texas Central Railroad and Infrastructure Inc. — said he welcomes a debate over eminent domain in the upcoming legislative session.

Even though many state leaders have been at the forefront of calls to tighten up state laws to further protect private property from outsiders, Keith believes those officials will remain receptive to a project that can be built with private dollars rather than taxes.

“The state Legislature has protected certain industries that were for the common good, and we’re a railroad so we are among them, along with telecommunications, power lines and public agencies such as those that build roads,” Keith said. “I think the leadership of the state will allow business to flourish. I also think they’re going to increase protections for Texans in determining how and when eminent domain is used.”

Land play

Keith declined to disclose precisely how much land the company had either purchased or optioned along the line. He said he hoped that most property owners would embrace the project rather than force the company to take eminent domain action.

Two sources who have followed the land play said that so far only a small number of land owners have accepted the option contracts. They estimate that perhaps 20 to 50 property owners have been offered payments of several thousand dollars each.

“Those estimates are low by a wide margin,” the company said in a statement sent by email.

However much land has been optioned, many owners who don’t want to sell their property say they have been threatened by the company. Texas Central Railroad and Infrastructure and its consultants are quick to boast about their eminent domain authority, said Austin attorney Luke Ellis, who specializes in eminent domain law and represents two land owners who have been contacted by the company.

“Without question this project is unprecedented,” Ellis said. “I think there are many questions about whether high-speed rail constitutes public domain, and whether they are acting in the public good.

“They are telling the world they are a railroad company, yet they have no equipment and no operations,” he added. “That’s no different than you and I deciding we want to start a railway company, going to the secretary of state and for $325 filing our LLC and sending letters to private property owners saying we need your land.”

No foreign funds

Company officials also declined to say where the money for the land options is coming from, except to say it isn’t coming from Japan Bank for International Cooperation, an arm of the Japanese government that promotes the export of Japanese goods and services.

Japan Bank for International Cooperation conducted an investment-grade ridership and revenue study for the project in 2012, a Texas Central Partners official said. That study indicates the bank will eventually be interested in investing in the project, but company officials declined to elaborate on their relationship with the foreign entity.

The project would use Shinkansen trains like those that currently operate between Toyko, Nagoya and Kyoto. Central Japan Railway Co., also known as JR Central, would provide the rolling stock technology.

Closer to home, at least three Texans have signed on as investors in the project, including Fort Worth investment manager John Kleinheinz, Dallas developer Jack Matthews and Houston entrepreneur Drayton McLane Jr. So far, their combined contributions amount to $75 million, company officials said.

No federal law

Opponents of the project celebrated in July, when the Surface Transportation Board, an independent federal agency that resolves railroad disputes and oversees mergers, determined that the proposed Texas Central Railway line was not part of the national railway system and therefore did not fall under itsjurisdiction.

The ruling means that the issue of whether Texas Central Railroad and Infrastructure has power to use eminent domain to acquire land will be decided in-state.

That could be an uphill battle, opponents said.

“We are preparing for a huge fight in the Legislature. We think it’s going to be a major issue,” said Kyle Workman, president of Texans Against High-Speed Rail, a Jewett-based group of landowners, businesses and elected leaders along the proposed route.

Workman predicted that lawmakers would be quick to come to the aid of landowners who don’t want to be part of the rail project.

“They’ve gone to all the landowners and threatened them with eminent domain, and made them an offer of an option contract for three-and-a-half years,” he said. “During that time, those people can’t sell their property. They can’t change the use of their property.”

Texas Central Partners officials say they’re confident their message of providing a worthwhile transportation benefit for Texans will resonate during the legislative session. The company in July hired former Texas Transportation Commission member Jeff Moseley of Houston, who also is a former Denton County judge, to help communicate information about the project to elected officials.

Texas’ future

Closer to Fort Worth, the debate over the Texas Central Railway route has created uncertainty about whether other rail lines could be built, including a proposed bullet train from downtown Dallas to Arlington and Fort Worth.

Bill Meadows of Fort Worth, chairman of a Texas Department of Transportation committee exploring high-speed rail development in the Metroplex, said that if the Dallas-Houston route becomes delayed by eminent domain concerns, the Dallas-Fort Worth route might emerge as a more palatable candidate for the region’s first bullet train.

Several alternatives are being explored, including one in which bullet trains would follow the Trinity Railway Express commuter train route from Dallas to CentrePort Station near Dallas/Fort Worth Airport, then turn south along some seldom-used freight tracks running parallel to Texas 360 to Arlington’s entertainment district before following Interstate 30 into downtown Fort Worth. About 90 percent of such a project could be built on right-of-way that is already owned by public agencies supporting the high-speed rail concept, making it potentially more palatable to Texans who don’t approve of the use of eminent domain, Meadows said.

“Many people believe that Texas’ ability to develop high-speed rail will have to be demonstrated and proven, so it needs to be somewhere, and some proposers might consider this shorter, 30-mile section [in Dallas-Fort Worth],” Meadows said.

This report includes information from the Star-Telegram archives.

Gordon Dickson: 817-390-7796, @gdickson