New cities on board commuter rail plan

Woonsocket-based Boston Surface Rail Co. agrees with three other New England cities to cooperate on passenger rail network

WOONSOCKET – Officials in four cities from three states have preliminarily agreed to consider becoming small-scale equity stakeholders in the Boston Surface Rail Company in a bid to tap federal resources for what is now envisioned as a $200 million commuter rail service with seven stops from Bedford, N.H. to Providence.

BSRC founder and CEO Vincent Bono hailed the informal accord as a milestone for the rail startup after meeting with officials from Nashua, N.H., Worcester and Lowell, Mass., and Woonsocket, at BSRC’s One Depot Square headquarters on Monday.

All, he said, have agreed to continue working toward the approval of a memorandum of understanding (MOU) with BSRC that would make them micro-shareholders in the corporation and require them to form financial oversight committees – a prerequisite to accepting certain grants from Federal Transit Administration.

“No pun intended,” said Bono after the meeting, “but in principle everyone is on board.”

At issue is a pot of roughly $10 million a year from the FTA’s Urbanized Area Formula Grants program. As a freestanding, private company, BSRC would not qualify

for the money – it must team up with a government agency in order to do so – something that wasn’t part of the company’s original business model.

BSRC or its corporate track hosts, including Genesee & Wyoming, parent company of Providence & Worcester Railroad, would receive 90 percent of the proceeds, but its municipal partners would get to keep the balance, using it solely for infrastructure improvements associated with the railroad or other transportation projects – including sidewalks, roads and traffic signals, according to Bono.

“It could mean a quarter million dollars a year for the city of Woonsocket, for example,” he said.

Bono said the state Department of Transportation already gets about $10 million a year from FTA formula grants, a sum it shares with the Massachusetts Bay Transit Authority for running commuter trains across tracks owned by Amtrak.

Instead of forming partnerships with the municipalities as a vehicle for carrying the formula grants, Bono said he could have proposed a similar arrangement with RIDOT to achieve the same goal. But Bono avoided doing so because he doubts much of the financial benefit that would accrue to DOT would have trickled down to Woonsocket.

The strategy he chose was designed precisely to maximize the benefit for commu- nities from which he intends to draw riders.

“I know their goals are more aligned with mine,” he said. “If a government entity is taking money that I help generate I want to see it spent where my riders are.”

The 44-year-old rail entrepreneur calls the opportunity “a real win for the four municipalities because it empowers them in a way that doesn’t involve waiting for the state government” to plan and execute transportation improvement projects.

The MOU calls for a fivemember “financial oversight committee,” with one member appointed by BSRC and one by each of the municipal partners. The chief duty of the municipal partners would be to provide the company with 90 percent of the proceeds from the FTA formula grants, but they would also be responsible for promoting the rail plan, identifying public resources to get it going and financial oversight.

While the mood at One Depot Square was celebratory after the initial meeting, BSRC staffer Wayne J. Denham, a mechanical engineer who recently began working on planning and regulatory issues for the company, put the status of the talks in perspective.

“Basically,” he said, “we’ve reached an agreement to work towards an agreement.”

Among those present for press availability at the meeting was Blake Collins, a former spokesman for Mayor Lisa Baldelli-Hunt. Bono said he has hired Collins as a consultant for governmental outreach. The City Council eliminated Collins’ position from the 2018 budget and he cut ties with City Hall, effective June 30.

Bono said he has also hired former RIDOT Deputy Director John Guarino as a consultant, due to his familiarity with federal railway grant programs and his “extensive background” in rail operations – the fruits of a prior stint with New Jersey Transit.

Founded in 2013, BSRC was conceived as a $3 million, privately financed project with a handful of rail cars designed to serve a Worcester-WoonsocketProvidence commuter rail loop, primarily as an alternative to Route 146, a stretch of road that’s plagued by bottlenecks, potholes and hairpin ramps designed for the vehicles of yesteryear.

If all goes according to plan, BSRC will still run its first carson the WorcesterWoonsocket- Providence loop, but he’s pushed back the projected launch date from late 2018 to mid-2019 at the earliest. And getting the rest of the loop operational will take even longer.

“We’re thinking we can do it in five years, if we keep our feet to the fire,” he said.

The new plan is vastly more complicated and costly, and even if Bono’s effort to pull in new municipal partners is successful, the FTA money would bankroll only a portion of the anticipated startup costs. Bono said he intends to raise the balance of the estimated $200 million price tag from private partners and, if necessary, by borrowing it from the federal Railroad Reinvestment and Improvement Fund.

In the latter event, Bono said, none of the municipal partners would share any liability for the loan.

In addition to Nashua, Lowell, Worcester, Woonsocket and Providence, the expanded footprint for BSRC commuter service now includes stops in Bedford, N.H., just north of Nashua, and Ayer, Mass., just north of Worcester. There are no plans at the current time to expand the line to Woburn or Boston, just south of Lowell, because the MBTA already dominates service in the region.

Bono said BSRC is branching into areas from which the company believes are underserved by alternative transportation options and therefore will generate the most rail riders.

“There’s still a lot of work to do with other host railroads as well as regulatory issues to address, such as Positive Train Control (PTC),” Bono said.

As part of the proposed MOU with BSRC, the prospective parties to the pact may make no public comment to the media unless it’s a joint statement. Thus, there was no press availability with them after their meeting with BSRC at the historic downtown train depot opposite City Hall.

According to Bono, Nashua was represented by members of its finance and economic development departments; Worcester by its department of intergovernmental affairs and Woonsocket by the law and planning departments. He said officials from Lowell participated via Skype, the Internet videoconferencing system.

Bono said BSRC had been in informal talks with the municalities about the proposed memorandum of understanding for about two months.