Economy & Economic Development  January 18, 2008

What killed Fort Lupton UP facility?

DENVER – On Jan. 4, negotiations on a deal already two years, $23 million, and dozens of community meetings in the making hit an impassable roadblock. The following week, Union Pacific Railroad announced it would not be building a multimodal rail facility near Fort Lupton. The project, which was expected to have a $3 billion economic impact in Weld County, was too expensive for the Denver-based Regional Transportation District.

RTD had approached UP over a year ago about relocating some of its Denver facilities so that RTD could acquire those properties for its FasTracks expansion and a commuter rail maintenance site. RTD, which would pay for the relocation, reached an agreement to give UP $40 million for early design work and a feasibility study, with a cost analysis.

Over the coming months, UP selected a relocation site – 640 acres between Fort Lupton and Brighton, east of U.S. Highway 85 – and embarked on an economic impact study and a community outreach campaign. For members of the impacted communities who attended meetings detailing the project as if it were a done deal, it was surprising that cost negotiations would have only recently began.

Officials with both RTD and UP say that’s because it’s taken a year to come up with a cost analysis for the relocation.

“In negotiations, you have a number of complex issues you work towards to see if they’re interested in selling, and how it would work. It’s a very long-term process and not something that gets resolved in a short window,´ said RTD spokeswoman Pauletta Tonilas. “They had to do their study and early design work for the location they would want to relocate to and that’s what’s been going on for the last year. We didn’t know the price until recently when they submitted a proposal that is just way over the mark of what we have budgeted.”

Tonilas would not disclose the price in that proposal, or identify RTD’s budget “mark.” She said UP’s asking price was confidential as part of contract negotiations, and that she was not privy to the information.

The Denver Post has reported that UP wanted $700 million – a figure neither Tonilas nor UP officials would confirm or deny.

RTD looks for alternatives

Whatever the figure was, Tonilas said it was presented in a Dec. 21 proposal to RTD executive staff that has been working on negotiations, including general counsel, assistant general manager of planning and development, chief engineer, senior manager of engineering and technical services manager.

Those officials then flew to Omaha to meet with UP executives. They had their last negotiating session there on Jan. 4 – until RTD stopped the process.

“It was determined at that time that because that was the cost that they proposed and held to that we said we were going to have no choice but to look at some other alternatives for portions of FasTracks because it was just not going to be affordable for us,” Tonilas says.

Mark Davis, a spokesman for UP, characterized what was presented to RTD not as a proposal but as the engineering study itself.

“We were providing the study for them to make the decision,” he said. “This was the study that RTD has asked us to put together. We provided them with the engineering study and cost estimate for relocation and RTD felt the cost was prohibitive and they elected to look at other options.”

Davis said UP had no need to relocate because the railroad is satisfied with its current Denver facilities, which are not at capacity.

“The key thing is that we have other projects that we’re working with RTD on and we will continue to work with them on a case by case basis,” he said.

Half the money spent

Of the $40 million RTD agreed to pay for UP’s study of the relocation, Tonilas said $23 million had been spent.

“That is all that will be expended on this effort now, and that will become part of an overall agreement – that we’ve made that investment already.” She said negotiations will continue with UP for other properties RTD would like to purchase for FasTracks. “We have a very good relationship with UP and expect that to continue,” she said.

The change in plans will cause RTD to re-evaluate segments of all four commuter rail corridors, including the Northwest corridor to Boulder and Longmont.

“The northwest rail corridor is still planned and being pursued,” Tonilas said. “Nothing has been taken off the table. The corridors continue to move forward. We’re having to reconfigure portions of our corridors to see if there’s a way to avoid certain UP properties and still build the corridor.”

She said the outreach that occurred -both in the Denver area for the proposed maintenance facility and UP’s community meetings in Weld County, where some Fort Lupton residents voiced spirited opposition to the plan – were a normal part of the planning process and not premature.

“When you go through the process, it doesn’t always mean the end result is going to be the project you planned,” she said.

DENVER – On Jan. 4, negotiations on a deal already two years, $23 million, and dozens of community meetings in the making hit an impassable roadblock. The following week, Union Pacific Railroad announced it would not be building a multimodal rail facility near Fort Lupton. The project, which was expected to have a $3 billion economic impact in Weld County, was too expensive for the Denver-based Regional Transportation District.

RTD had approached UP over a year ago about relocating some of its Denver facilities so that RTD could acquire those properties for its FasTracks expansion and a commuter rail maintenance site.…

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