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Backers of maglev train are betting big on a vision that has failed before

The Baltimore Sun

The circle of political power brokers and deep-pocketed investors hatched their plan more than three years ago, seeing promise in a project deemed wildly unrealistic by some and stubbornly unattainable by others.

With billions in backing from the Japanese government, the Northeast Maglev group envisions building a futuristic magnetic levitation or "maglev" train capable of transporting Baltimore homeowners to Washington jobs in 15 minutes, at speeds above 300 mph.

Plenty in Maryland think it will never happen or shouldn't, given the price tag in excess of $10 billion. Yet the group's members — including former U.S. Senate Majority Leader Tom Daschle, three former governors of Northeast corridor states, two former U.S. secretaries of transportation and Under Armour founder Kevin Plank — are so keen on the idea that they've already dropped $40 million into studying the economics of the project, without securing a dime of federal, state or local funding.

"What we really wanted to do was be sure we had a good handle on the entire project itself, what it looked like, what we could offer, what the benefits would be, where the money would come from," said Wayne Rogers, the group's chairman and CEO and a longtime political operative in the state. "All of the risk money and risk capital that we've been expending to date is all private money."

The group eventually wants to extend the line to New York and beyond to Boston, shattering existing travel times along one of the busiest corridors in the world.

It's a bold strategy that flips the burgeoning state model of public-private partnerships on its head. Most projects don't get started without first attracting federal funding, and big private investments are secured from future equity holders, not from bank loans, only after substantial design and preparation work is completed under government grants.

Rogers and his cohorts, instead, are betting that a $5 billion loan from the public Japan Bank for International Cooperation and a waiver of technology licensing fees from the private Central Japan Railway Co. on the front end will attract an additional $5 billion or more in federal and private investments.

"They would not make an offer of financing the project if they didn't think this project was realistic," Rogers said of the Japanese.

The group hopes that optimism will be contagious, or at least hard to ignore.

Others aren't sold, including some longtime backers of bringing maglev to the state.

"A project like this needs both state and federal buy-in, and because it's been out of the public eye for a while, people have lost interest in it," said Phyllis Wilkins, who led a 20-year push to bring German maglev technology to Maryland before retiring in 2012. "I know people who used to be supportive of the project who now say, 'If we can just get the Red Line built!'"

How the new proposal will stack up against the previous one remains unclear, mostly because many details about the new proposal remain unknown.

The group expects to need at least $10 billion, but the final cost will depend on the exact route, the amount of tunneling or elevated track needed, and a wide array of other factors, such as soil density and construction cost increases during development.

"When you're talking things that are measured in hundreds of millions of dollars a mile, a mile here or a mile there matters," Rogers said.

Still, the group believes the first leg from Washington to Baltimore will be financially sustainable with ticket costs similar to those for Amtrak's Acela service, which ranged from $42 to $95 Monday, depending on time and class of ticket. Extending the line to New York would make it an even bigger winner, he said.

The group predicts that the project — which would have three stations in Washington, at BWI Thurgood Marshall Airport and in Baltimore — would generate $437 million and 5,500 jobs annually from increased visitor spending in Maryland and increase median residential property values around the Baltimore station by 30 percent. It also would expand the employee pool for city employers and offer residents access to more jobs in a larger region.

Wilkins said her group, Maglev Maryland, was riding high once, too.

In the late 1990s and early 2000s, when the federal government was intrigued by maglev and asked for proposals to build lines around the country, Wilkins and her collaborators, including Bob Embry of the Abell Foundation and Jack Kinstlinger of contractor KCI, secured millions in funding to study maglev in Maryland. They got all the way through the notoriously laborious environmental impact study process and submitted a draft to the Federal Railroad Administration.

They'd mapped out pricing — putting the total cost around $5 billion — and ridership and ticketing costs, confident the state and other investors could build a financially viable system that riders could afford, Wilkins said. They had similar promises of more jobs, more activity, more tax revenue and higher household earnings.

Then the wheels came off.

The project started to draw the ire of local communities the rail line would pass through. Wilkins remembered going to a public meeting in Linthicum and seeing children holding "HELL NO MAGLEV GO" signs.

In 2003, state Sen. James "Ed" DeGrange Sr., the transportation subcommittee chair, who represents Linthicum, and state Sen. Edward Kasemeyer, the budget and taxation committee chair, who represents residents who also lived along the line, starting working on language to effectively block the state from investing in maglev, and eventually got it passed.

"It ran right through both our districts, and just didn't seem to make a lot of sense in terms of disruption," Kasemeyer said of the older proposal.

The administration of then-Gov. Robert Ehrlich was also skeptical, said Bob Flanagan, Ehrlich's transportation secretary and a current Republican candidate for state delegate in Howard County.

"Quite frankly, the people at [the Maryland Department of Transportation], the career people at MDOT, were always scratching their heads whenever anyone raised this issue," Flanagan said. "There was just a lot of skepticism about whether it could even be possible. They thought it very far-fetched."

Wilkins said DeGrange and Kasemeyer's budget language killed the project. The FRA, which got wind of the state's new stance, never responded to the submitted environmental report with comments, a standard step in any review. The federal funding dried up.

She said she wishes the Northeast Maglev group success, but questions whether they will be able to find "enough political will or comity to get the financial support."

Kasemeyer said he hasn't fully studied the new proposal, but doubts there is a way the service could attract enough ridership among commuters, given cheaper MARC and Amtrak options. (The one-way fare between the cities is currently $7 on MARC.)

"You're building something that doesn't have any practical application to it, other than a very small portion of the population that would be able to afford using it," Kasemeyer said.

Flanagan, running to represent District 9B, called the project a "far-fetched use" of public money.

Rogers said Northeast Maglev doesn't yet know how much funding it will need from the federal government — that depends on additional private investors. He doesn't expect to need state cash but will need some support from Maryland — perhaps just in getting the project through permitting. (The budget language blocking any state investment in maglev was repealed in 2011, in part at the urging of Rogers' group.)

In a statement, Nina Smith, a spokeswoman for Gov. Martin O'Malley, said, "We support investing in transportation infrastructure, believe in the promise of high-speed rail, and look forward to examining the specifics of the proposal."

Baltimore Mayor Stephanie Rawlings-Blake has backed the plans, as O'Malley did the previous maglev proposal when he was mayor.

The campaigns of Lt. Gov. Anthony Brown and Larry Hogan, the Democratic and Republican contenders to replace O'Malley, respectively, did not respond to requests for comment.

Kinstlinger, who led the past maglev project in Maryland with Wilkins, said that "something big is going to happen in the Northeast Corridor," but he doesn't know if it will be a high-speed steel wheel or maglev line. He hopes it is maglev.

"It's kind of an idea that keeps getting buried but keeps reappearing, because there is a lot of exciting potential in it. It's frictionless and it's fast, but much of it has to be financed by Wall Street," he said. "Wall Street is reluctant to finance new technologies, and for a lot of Wall Street, if it's not somewhere in the U.S., it's new — even if it's already operating somewhere else."

Embry, of the Abell Foundation, which helped finance studies for Wilkins and Kinstlinger and has long supported maglev in Maryland, said he has reserved hope for the new project.

The major investment from the Japanese makes "a big difference" in its chances, he said, but there remains the question of whether the group will be able to attract $5 billion more.

"I would think that the odds are against it, just as a lay person having no particular insight into the dynamics of Washington," Embry said. "But people with an agenda get ahead of those without one, so who knows."

krector@baltsun.com

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