Crazy Rail Transit Capital Costs

I don't know what it is about rail transit advocates, but for some reason they seem to believe that capital costs of rail construction are somehow irrelevant.  There is no other way to explain this (thanks to a reader for the link):

A new rail station that opens next Wednesday in Ramsey could give the Northstar Commuter line the ridership boost it needs for an eventual extension to St. Cloud, an Anoka County official says.

But even as a ribbon-cutting ceremony Thursday heralded the arrival of the seventh station along the line, others have questioned the cost: about $13 million, or an average of roughly $130,000 for each of the 100 new daily round-trip riders the station is expected to attract. Some also wonder whether the new station will merely siphon riders from the two stations on either side of it.

But apparently the rail authority thinks the skeptics are being too pessimistic.  They expect it to be MUCH better:

Anoka County Commissioner Matt Look, a former Ramsey council member, predicted the new station will exceed the 100 daily round trips that Northstar officials hope it will generate. With a bus line being discontinued because of the station's arrival, and a 230-unit apartment complex going up near the site, Look said the station could increase Northstar's overall ridership by 25 percent. Based on current figures, that would be a rise of about 600 rides per day.

So the station's greatest supporter is optimistically expecting 300 daily round trip riders per day.  That makes the cost of the station per round-trip daily rider "only" $43,000.    Or approximately enough to buy every rider a new Prius and still save about half the costs.


  1. Noah:

    Matt Look and his amazing know-all see-all crystal ball predicts that more than a few of the residents of 230 apartment complex have jobs at the other end of the train line.

  2. mark2:

    Maybe they should only allow people who work at the other end of the line, to live in the apartments. And force them to get rid of their cars as part of the rental agreement.

  3. Broccoli:

    There are all kinds of benefits for this rail station that aren't accounted for:
    1) Residents and businesses who disliked having their neighborhood destroyed donated money to politicians to fight it
    2) Developers who exist of government contracts donated money to politicians to support it
    3) Lawyers collected fees in the imminent domain court cases
    4) The city was able to obtain federal grant money, leveraging the green cred gained from expanding there commuter rail, for more bike paths.
    5) The city gained relief from the EPA Air quality gestapo by expanding the rail system, because while a rail system has never been shown to reduce emissions since not enough people ride it, it is still the favored method of the EPA to increase air quality
    6) Several environmental impact surveys were commissioned, employing many fresh environmental engineers who would otherwise be unemployed.
    I mean, there are probably 100s of government created artificial absurdities that were satisfied by building this rail station. We got to count those!

  4. MNHawk:

    You all scoff but just wait until you see the ridership on game day Sundays, as we Minnesotans go to our new billion dollar Vikings Stadium, funded by the free money obtained from gambling. After that it's on to building a new Choo Choo Train line, practically to my front door, funded by another billion plus of free money from Washington DC.

    Good times.

  5. aczarnowski:

    There's another way to explain it - other people's money doesn't mean anything to the people spending it.

    And I'm one of those other people. Everybody is infatuated with rail around here. We're still remodeling the old St. Paul rail station to link our second, new, light rail line to long range passenger trains that won't be arriving for a long time. Where does everybody think people are going? Question any of this and you get shrugs and "it'll be nice." Nice? Nice! Gah.

  6. Russell Steen:

    They also use the trick of switching from counting round-trip to counting single trip -- making appear like a six times increase to a casual reader.

  7. Ukko:

    The Northstar line runs on an existing Burlington-Northern Santa Fe freight line. Imagine what the capital costs would have been otherwise.

  8. Allen:

    This line has been a long running disaster. The preceding project was to run it twice as far to St. Cloud. But it's overly optimistic ridership projections weren't enough to meet the Fed's arguably low standards. So they chopped it in half and squeaked in for some federal grants.

    Ticket sales are currently covering @ 20%-25% of the operating costs which means the line is bleeding a million dollars per month. That's on top of the $325+ million that was spent to start up the line. Liberally amortize that over 20 years and that's another $16+ million a year it's losing.

    The future doesn't look bright, either. On the plus side, downtown Minneapolis does have about 160,000 jobs ( about a 1/10th of all jobs in the Twin Cities ). However, like other large metros, the core has been losing jobs for a long time while newer large suburbs have been experiencing large gains. It's more and more likely that the few people living along the route and using Northstar will need to make use of the 2 highways running near the line, one right next to it, to drive to get to their jobs in the future.

    Starling indicated that the largest increases in employment over the last 12 years have taken place mostly in the outer-ring suburbs, while the developed core of the region has lost jobs.

    She said the bigger gainers include Maple Grove, 13,000 jobs; Eagan, 6,300; Richfield, 5,800; Shakopee, 5,200; Woodbury, 4,400; Golden Valley, 3,600; Lakeville, 3,500; and Blaine, 3,000.

    The biggest losers over the last 12 years: Minneapolis, 21,000 jobs; Bloomington, 17,000, and St. Paul, 13,000.

  9. randian:

    In government accounting capital costs are a one-time expense, so they do not appear in future-year budgets.

  10. Mark:

    I like the commuter train. I ride it from Elk River, a NW suburb, downtown to the light rail and then to the airport. The train is very efficient and comfortable and the parking is free (when you are gone 6-10 days, that is more than $100 in savings on airport parking).

    Even though the cost of a round trip cost $50, it only cost me $6.50 ($4.25 to the airport, then $2.25 from the airport because the light rail ticket allows transfer to all buses and trains).

    Thanks for the subsidy, taxpayers!!! (sarcasm alert!)

  11. MNHawk:

    I agree with you. I'll most certainly take the choo choo to Minneapolis when the SW line goes to within a few blocks of my front door. If my unborn grandchildren want to throw a billion dollars my way, to get me to Minneapolis a couple of minutes faster, who am I to argue? I just wish run times wouldn't cut in half, right when the games let out and people want to ring the things. Oh well, the army of managers coming out of our finest colleges of Political Science know what's best. If one little choo choo running every half hour when the Twins game gets out at 10PM is best, than that's what's best!

  12. obloodyhell:


    }}}} other people's money doesn't mean anything to the people spending it.

    Friedman pointed this out decades ago. Spending comes in four classes:

    1) You can spend your own money on yourself. When you do that, you work hard to get the best value, you try to get the most for your money.

    2) You can spend your own money on somebody else. For example, You buy a birthday present for someone. Well, then, you care somewhat about the present, but you're very careful about the cost.

    3) You can spend somebody else’s money on yourself. Think "Gift Certificate" -- Again, you're going to aim to get the best value possible for the money.

    4) You can spend somebody else’s money on somebody else. Your boss tells you to buy a present for his secretary, and gives you the money. You have no stock in this trade, really. You get neither the benefit of the gift, nor does it come from your pocket. You've no concern, really, for the value in return for the money. So you don't care that much about it. And ALL government spending falls into this class.


  13. SamWah:

    And...they'd be paying gasoline taxes. And registration/reregistration fees. Likely for pollution inspections.

    As for those apartments, Portland suggests:

  14. irandom:

    Nah, just don't build any parking to force people onto public transit.