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Railroads, Auto Companies Remain Mute Over $700 Million Detroit Freight Investment

Proposal for expansion splits a citizens group

June 9, 2005 |
Great Lakes Bulletin News Service


Railroads ship a growing amount of freight through intermodal terminals. Detroit’s are capable of making 345,000 lifts a year. The demand exceeds the capacity and 100,000 shipments are diverted to intermodal facilities in Chicago, then trucked to Detroit, increasing truck traffic on state highways.

A proposal to build a modern rail yard in Detroit that makes it easier to ship freight by road and rail reaches a new milestone next week when citizens have a chance to publicly comment on the state’s draft environmental assessment. At stake in three public hearings scheduled for Detroit, and a fourth in Dearborn, is a 474-page study prepared for the state Department of Transportation that thoroughly evaluates the proposed Detroit Intermodal Freight Terminal’s consequences to the environment, public health, economy, and quality of life in Michigan’s largest city.

The DIFT — A Brief History
1992 – Legislature directs MDOT to address Detroit intermodal transportation
1993/94 – Early Assessment of Need and Vision
2001 – DIFT Project Feasibility Study
2002 – Environmental Impact Statement Started
2003 – EIS Alternatives Expanded Based on Public Input
2004 – EIS Prepared in Preliminary Form for MDOT/Review
2005 –

Draft Environmental Impact Statement
Four Community Hearings

2006 – Final Environmental Impact Statement
Recommended Alternative Report
2007 – Record of Decision

The modernized intermodal terminal, designed to efficiently transfer cargo from trucks to trains, or trains to trucks, is one of the largest rail transportation infrastructure projects ever proposed for southeast Michigan. The idea for the project originated with the state Legislature in 1992, when lawmakers directed the state Department of Transportation to consider how to increase Detroit’s capacity to accommodate the demand for intermodal shipments, which are expected by 2025 to be approximately double what Detroit can currently serve.

Last month, the state Transportation Department published a Draft Environmental Impact Statement that concluded the proposed terminal could cost $300 million to $700 million, create 3,780 jobs in Detroit — 2,245 of them at the facility — and as many as 5,220 more statewide. The study also found that the facility, which was originally projected to cost $130 million, would double the number of trucks using major roads in the area, and prompt more industrialization in southwest Detroit, the city’s fastest growing community.

Four Potential Scenarios
The National Environmental Policy Act requires the government to thoroughly evaluate the consequences of any major action that will use federal funds. The Draft Environmental Impact Statement evaluated the consequences of these four alternatives:

Alternative 1: Take no action.

The first alternative would result in 1,029 new permanent jobs by 2025. It would reduce carbon dioxide and nitrous oxides substantially, though this alternative would increase dust levels 30 percent.

  • No relocations.
  • $154.9 million in property tax revenue for the city and state by 2025.
  • 2,060 two-way truck trips daily.

Alternative 2: Improve and expand all four intermodal terminals in Detroit.

  • Relocate 11 residential units and 700 jobs.
  • Net job creation by 2025: 5,950 jobs
  • Cost $326.4 million.
  • Net Detroit and state tax revenue gain: $667.8 million by 2025.
  • 3,465 two-way truck trips daily.
  • Reduce carbon dioxide by 53 percent; nitrous oxide by 60 percent by 2025.
  • Noise levels at Livernois Junction are reduced substantially, principally from constructing noise barriers.

Alternative 3: Consolidate four terminals at Livernois Junction.

  • Relocate 83 residential units, 64 businesses, 1,200 jobs.
  • Net job creation by 2025: 9,050 (2,245 jobs will be at the terminal).
  • Cost: $697.7 million.
  • Net Detroit and Michigan tax revenue gain: $1.1 billion by 2025.
  • 4,130 two-way truck trips daily.
  • Reduce carbon dioxide by 73 percent; nitrous oxide by 65 percent by 2025
  • Constructing a perimeter road with landscaping on the north side of Livernois Junction.
  • Several abandoned properties, salvage yards, and industrial sites relocated.

Alternative 4: Consolidate intermodal operations at Livernois Junction; expand Moterm Terminal.

  • Relocate 33 residential units, 51 businesses, 1,000 jobs.
  • Net job creation by 2025: 8,819
  • Cost $668 million.
  • Net Detroit and Michigan tax revenue gain: $1.108 billion by 2025.
  • 3,825 two-way truck trips daily.
  • Reduce carbon dioxide by 74 percent; nitrous oxide by 66 percent by 2025.
  • Reduce dust by nearly 20 percent.
  • Noise levels at Livernois Junction are reduced substantially, principally from constructing noise barriers.
  • Construct a perimeter road with landscaping on the north side of Livernois Junction.
  • Several abandoned properties, salvage yards, and industrial sites relocated.

Study Results
According to the Draft Environmental Impact Statement, Detroit is Michigan’s primary center for intermodal shipment. Four major railroads ship freight through four large intermodal terminals in the region that are capable of making 345,000 lifts per year. The demand, however, exceeds the capacity. As a result some 100,000 freight shipments are diverted to intermodal facilities in Chicago and then trucked to Detroit, increasing truck traffic on state highways by an average of 2,000 trips a week.

The majority of public concern to date has focused on the state’s plan to build the new intermodal facility at the existing Livernois Junction Terminal in the city’s southwest side. That terminal, which neighbors have long complained is dusty, noisy, and ill-kempt, is owned and has been operated jointly since 1999 by CSX Corporation and Norfolk Southern. It is currently being improved with $10 million in public and private funding.

The three other intermodal terminals in the Detroit region are the Oak Terminal and the CP Expressway operated by Canadian Pacific Railway, and the Moterm Terminal operated by Canadian National in Ferndale, an inner ring Detroit suburb. The proposed Detroit Intermodal Freight Terminal, if it is built, would likely consolidate the operations of the four facilities in a larger and modernized facility at Livernois Junction.

Lifeline or Intrustion?
The proposed new intermodal terminal comes at a dire economic moment in the Detroit region’s history. Manufacturing jobs are leaving Michigan by the thousands each year. The city itself has a huge budget deficit. Where once the proposal was viewed as an intrusion, it is now seen by some as an economic lifeline, an opportunity to attract hundreds of millions of federal transportation dollars.

The real rub is how the proposed new terminal could affect southwest Detroit. In the late 1990s, as the idea of modernizing and expanding the Livernois Junction terminal gained momentum in the state Department of Transportation, residents and civic leaders in southwest Detroit grew restive about the consequences to one of the city’s thriving neighborhoods. Clearly, there was an opportunity to develop more business activity and jobs, a result viewed as a decided improvement for the community. But when early maps appeared that showed the proposed new terminal might cause dozens of homes and businesses to be moved or demolished, residents quickly voiced their opposition.

The very last thing that southwest Detroit needed, said civic leaders, was to tear down more buildings. Residents also expressed concern about the number of two-way truck trips through the community, which the state initially estimated at 8,000, five times as many as today.

The community’s response to such a large industrial expansion was not surprising. What was unexpected was the near-complete absence of public support for a modernized and expanded intermodal terminal from the very industries it was designed to serve: railroads and auto manufacturers. When reporters asked executives what they thought of the proposed intermodal terminal, the response was usually a startling indifference.

Industry Unusually Subdued
That continues today. In an interview, a top executive of Canadian Pacific Railway, which would move two of their operations under one of the alternatives described in the draft environmental study, said the company is “largely indifferent” about that proposal or any other.  “We could work with any of the scenarios,” said Director of Government and Public Affairs Randy Marsh.

Mr. Marsh also noted that his company was not swayed that there was a strong economic argument for any of the proposals. “There could be a business argument that it would be better,” said Mr. Marsh, indicating doubt that such a large investment would pay off for his company.

A public affairs executive at CSX also said his company has not taken a public position on any of the proposed alternatives identified in the draft statement.

B.J. Wargo, an executive with Norfolk Southern, said that any of the three alternatives that propose to expand and modernize intermodal freight operations in the Detroit region would be “more effective for everybody.” Still, neither Norfolk Southern nor any of the other railroad companies are publicly campaigning for any alternative.

Environmental Justice 
The draft environmental study evaluated whether the Detroit Intermodal Freight Terminal would disproportionately and adversely affect minority and low-income populations in Detroit, a requirement of President Bill Clinton's 1994 executive order on environmental justice. The environmental justice aspects of the project were taken into account because every one of the alternatives affected communities with high minority populations. Nearly half of the people living around Livernois Junction, for instance, are minorities, and one-quarter of the residents live below the federal poverty threshold, according to the study.
      The authors of the environmental study interviewed residents and determined that the major community concerns in the community around Livernois Junction were heavier truck traffic, air pollution, and depreciation of property values. The study's authors concluded that there would be no or “minimal” adverse effects to minority and poor populations from expanding existing terminals, or consolidating intermodal shipments at
Livernois Junction.

The same holds true for the auto manufacturers. A Ford executive said his company does not have an opinion. General Motors has privately told state lawmakers that a new intermodal freight terminal at Livernois Junction or any other place is a priority for the company, but the company has not made that position public.

A Divided Community
Southwest Detroit leaders and residents are not nearly as reticent, nor is the community response consistent. Communities For A Better Rail Alternative, based in southwest Detroit, is the major civic organization that has closely followed the development around the proposed rebuilt freight terminal. The organization’s leadership is split on how to respond, with some leaders hoping to encourage economic development around a vastly improved and cleaner site, and others strongly opposed to any expansion at all.

Karen Kavanaugh, policy director of Southwest Detroit Business Association and co-chair of Communities For A Better Rail Alternative, praised the state for its diligence in conducting the evaluation. “Number one,” said Ms. Kavanaugh, “MDOT listened to community concerns.”

Ms. Kavanaugh said that as the co-chair of Communities For A Better Rail Alternative, she is convinced that expanding intermodal activity is “a positive move for Michigan, and for the country.  We don’t want to miss that move on the local level. We have to make sure that we support the host location.”

She noted that the new road within the Livernois Junction railyard, and some landscaping were among two of the Communities for a Better Rail Alternative’s proposals that were incorporated into the preferred alternatives. The road and landscaping proposals are a response to years of activism about the condition of Livernois Junction.

“The community has had a history of trying to get the railroads to simply maintain their property and they just won’t do it,”  Ms. Kavanaugh said. She said Communities For A Better Rail Alternative is seeking formal negotiations with the state Department of Transportation to address this concern and several more.  

Democratic State Representative Steve Tobocman, who also is a member of Communities For A Better Rail Alternative, declined in an interview to “endorse any of the alternatives at this time.” Although Alternatives 2 and 4 look better than the third, he said, Mr. Tobocman also insisted that a larger intermodal freight terminal in his district would degrade air quality, increase truck traffic, and damage the community’s appeal to residents, new businesses, and visitors. The area is “already close to an untenable place because of the trucks,” said Mr. Tobocman, and the Livernois Junction rail yard is “unsightly.”

Split Over Goals
But Kathryn Savoie, a co-chair of Communities For A Better Rail Alternative, said she and other members of the organization are adamant that truck traffic not increase in the neighborhood and that the Livernois Junction terminal not grow in size.  Any of the three action alternatives proposed in the draft environmental study would result in more truck traffic and an expansion of the Livernois Junction facility.

Ms. Savoie opposes any negotiations with the state Transportation Department until the state commits to not expanding the Livernois Junction terminal. The issue of whether or not to talk to MDOT has split Communities For A Better Rail Alternative. Ms. Kavanaugh said the group’s “actual existence is in question.”

Government officials also weighed in on the draft environmental statement. Heidi Alcock, one of three people working on the DIFT project in the Detroit City Planning Commission, said it was good to see “more alternatives”. But, she said she was disappointed by what she viewed as the report’s weak economic, health, and air quality assessments.

Ben Korhman, MDOT’s communications director, defended the quality of the technical analyses, asserting they were “done with the best available and approved methods.” Mr. Korhman also said that the health “impacts would not fall disproportionately on any specific group,” an assertion that drew this response from Detroit City Council Pro Tem Ken Cockrel: “That makes no sense to me. The areas are overwhelmingly minority and low-income.”

Detroit City Council President Maryann Mahaffey agreed. "That is unbelievable. It's southwest Detroit," she said. "It's Hispanic and African-American. They are already struggling to survive."

Mrs. Mahaffey added, "The community is terribly and justly angry about the loss of housing, about the encroachment of industry, and about the push to get the project into their area."

Mr. Cockrel also raised questions about how serious the rail companies and shippers are about building a larger and more modern intermodal freight terminal at Livernois Junction, or anywhere else in the Detroit region. He noted the indifferent public attitudes of industrial executives and asked, “Why does the project continue to have such momentum when the people that should care most aren’t saying anything?”


June 13, 2005

Canadian Pacific Responds

Editor's note: After reading the Institute's June 9th article on the Detroit Intermodal Freight Terminal, Randy Marsh of Canadian Pacific Railroad clarified the company's position, which differed from what he initially told our reporter, Jeremy Babener. We stand behind Mr. Babener's work.

But we also wanted to share Mr. Marsh's letter, containing this passage, with our readers: 

"The DIFT project is one of the best examples of multi-modal transportation planning that I am aware of. Such planning is vital for the region's continued economic well being. I did NOT state that I was 'not swayed that there was a strong economic argument for any of the proposals' but, rather, I noted that we were not convinced that any of the proposals was clearly better than the others and that there were positives about all.

"Also, I did not suggest that such a large investment would not pay off for CPR, as the writer suggests, but, in fact, indicated that an argument could be made, based upon the study results found by the DIFT review, that a consolidated terminal model with railroads co-located could lead to more modal shift of cargo to rail, thereby achieving many more of the public benefits sought by governments like: lowered overall transportation emissions, reduced highway congestion, etc, and therefore could be a preferred option from the public perspective.

"Notwithstanding this, we look forward to and fully support the continued progress of this project regardless of the proposal chosen."

Randy Marsh
Canadian Pacific Railway

Jeremy Babener, a student at Haverford College, reports and writes for the Michigan Land Use Institute’s news desk this summer. Reach him at Jeremy@mlui.org.

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