Rail line would rely on new tax district to make it go

A proposed $3 billion commuter rail that would link Northern Colorado with Denver would draw its funding from a tax on new buildings in the areas it serves.

Whether the Northern Colorado Commuter Rail project ever picks up steam is the big question.

The group that crafted the proposal has called for as many as 94 stations at full build-out. The rail would travel along Burlington Northern Santa Fe, Great Western Railway and Union Pacific railway, connecting Northern Colorado communities along the way.

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Its proponents believe the project would reduce traffic and air pollution, but the construction costs would be borne by developers building structures near the rail line’s stations.

Money for rail projects isn’t in great supply nowadays.

The proposal comes amid complaints by cities near Denver that they may not see any part of a light rail system until 2044 despite the fact they have funded the FasTracks project since 2005. Taxpayers in Denver’s northern suburbs have contributed more than $240 million of the approximately $1 billion in tax receipts to RTD for commuter rail.

The Northern Colorado Commuter Rail also is not the only rail project under consideration in the region. The Colorado Department of Transportation plans to ask the federal government to fund a commuter rail service with nine stations connecting Fort Collins and Longmont using BNSF Railway Co. right-of-way.

Despite all of this, leaders of the nonprofit Northern Colorado Commuter Rail say they are undeterred.

They envision the tax on new structures within rail station districts would fund bond issues to generate the capital needed to build the first phase of the rail. Developers would pay the one-time, per-unit tax but homebuyers would get to ride for free.

The tax could amount to $16,000 for each dwelling unit, or $50 per square foot, said Dave Ruble, president of Northern Colorado Commuter Rail.

Ruble and his partner are assuming growth in the coming years would lead to an average of 1,000 new homes and 350,000 square feet of commercial space per station district.

Others who live outside the rail station districts would have to pay a fare to ride.

The plan is to generate about $33 million in revenue every time a rail station is built, said Ruble, who worked in the Colorado Department of Transportation’s planning department for three decades. He now owns a consulting business, DB Enterprise LLC.

The idea is that people would be willing to pay more for property because the rail would add value. And perhaps families might not have to buy a second car if they use the rail instead, Ruble said.

Loveland Mayor Cecil Gutierrez believes multiple transit options should be studied, including rail. As the population both increases and ages, governments will have to take a closer look at public transit, he said.

But he doesn’t think the public could stomach a tax increase in a still-weak economy where even the Colorado Department of Transportation has seen its share of budget cuts.

In Loveland, any fees charged to developers for the rail would add to capital expansion fees the city already charges to fund a variety of city services, including parks and the public library.

“That really adds a significant amount of dollars to those expansion fees,” he said.

Roger Hoffmann, vice president of the nonprofit, points out that adding lanes to Interstate 25 would cost taxpayers a great deal while not necessarily easing long-term traffic congestion.

The group will know more about the project once it commissions a consultant to do a $2 million feasibility study.

“This really would look at, ‘Is $16,000 too much? Is $50 too much? Do we have to offer them a free ride on the system or could we just charge them a fee and not offer any benefits?’” Ruble said.

The group plans to approach Northern Colorado city councils and businesses as well as state and federal governments to ask for contributions for the feasibility study.

Gutierrez would not predict how councilors would react to such a proposal, but he’s certain they would need more details.

“There’s a lot more work yet to be done, a lot more discussion,” he said. “I don’t think we can focus on one mode of transportation at this particular point in time.”

Residents have heard the group’s presentation at meetings and even Great Western Railway representatives have shown interest in the project, but Hoffmann and Ruble know getting it built won’t be easy.

As Ruble put it, “We’re probably five to 10 years away from even thinking about having operations begin.”