2008-02-13

FasTracks Slowing Down

Just when they sell off the lots around Union Station to meet a $200 Million shortfall in the improvements necessary to make the station a hub for rail and bus operations, RTD is finding itself looking at more potential red ink. Failed negotiations between Union Pacific and Denver's Regional Transportation District (RTD) for sales of key tracts of land near downtown Denver's Union Station have led RTD to consider other properties and consequently change the alignment of some routes. This is likely going to lead to further analysis like environmental impact assessments and other unanticipated costs in both time and money.

So why did UP price itself out of the market on real estate? Two factors have been offered as an explanation. First, freight traffic by rail is at an all-time high. Railroads are laying down considerable amounts of cash to expand capacity. Selling off any usable assets--even if they're not likely to be used--doesn't sit well with the bean counters. This is compounded by the second factor. Railroads have long been out of the business of acquiring land, and the government doesn't exactly hand out land grants anymore. Buying private land piecemeal can't be all that appealing to a railroad executive at Union Pacific, but that's exactly what the folks at RTD are going to have to do. The speed of which is going to be anything but FasT.