Early Actions for High Speed Rail by University of Pennsylvania Stuart Weitzman School of Design

r o f y g e t t a s r t a S e h s t s C r e o n A N e n v i e o t i h i t t g e r e r p o f a m g y o e g C e M t A t a s r n t a o i S e g h s t s e r r e a tiven e No i h t t Early Actions e r p y fo g f o r High Speed Rail e t a University of Pennsylvania|School of Design Department of City and Regional Planning Spring 2012 Studio Final Report

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UNIVERSITY OF PENNSYLVANIA SCHOOL OF DESIGN The University of Pennsylvania carries on the principles and spirit of its founder, Benjamin Franklin: Entrepreneurship, Innovation, Invention, Outreach and a pragmatic love of Knowledge. Franklin’s commitment to meld theory and practice has remained a driving force in the university’s academic and social mission. The University of Pennsylvania School of Design embodies these principles as well, linking a diverse range of disciplines through a design perspective. The school encompasses Architecture, City and Regional Planning, Landscape Architecture and Urbanism, Fine Arts, Historic Preservation, and Urban Spatial Analytics. The City Planning Masters Program within the School of Design integrates academic planning theory with practical, client-based applications of planning.

During the program’s final semester, students participate in a capstone studio that serves as the culmination of their planning work at Penn. Incorporating the skills gained during two years of study, the studio project requires a team of students, under the guidance of professional practitioners and faculty, to collaborate on a real project addressing an ongoing planning challenge. This year’s studio builds upon the past work of the PennDesign 2010 and 2011 studios which focused on the design and implementation of High-speed Rail in the Northeast Megaregion. The 2012 studio uses lessons learned from these past studios to put forth a series of strategies to improve connections and expand transportation capacity across the Northeast, support an integrated financing approach, encourage economic growth and development, and provide the benefits of this investment to a wide variety of stakeholders. The studio would like to extend its gratitude to the instructors Marilyn Jordan Taylor and Robert Yaro for their guidance in producing this report. The studio would also like to thank the distinguished team of professional advisors who provided invaluable insight throughout the semester.

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studio team Ryan Bash, Master of City Planning, Public/Private Development Andrew Bean, Master of City Planning, Transportation

Ella Carney, Master of City Planning, Land Use and Environment

Alexandra Church, Master of City Planning, Transportation; Master of Historic Preservation Liza Cohen, Master of City Planning, Transportation

Christopher DiPrima, Master of City Planning, Transportation

David Dobkin, Master of City Planning, Public/Private Development Brooke Fotheringham, Master of City Planning, Transportation Tina Hu, Master of City Planning, Land Use and Environment Sandy Ngan, Master of City Planning, Transportation

Katherine Olson, Master of City Planning, Community and Economic Development Rachel Strauss, Master of City Planning, Transportation

Margaret Wood, Master of City Planning, Land Use and Environment Ema Yamamoto, Master of City Planning, Transportation

INSTRUCTORS

Marilyn Jordan Taylor, Dean and Paley Professor Robert Yaro, Professor of Practice

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Acknowledgements The studio offers its sincere thanks to AECOM, Parsons Brinckerhoff, and the Daniel and Joanna S. Rose Fund for their generous contributions to the studio and its planning workshop, which was held in London, England, from March 4 - 9, 2012.

The studio also extends particular thanks to Vincent Goodstadt, Former President of the Royal Town Planning Institute and Honorary Professor at the University of Manchester, who gave generously of his time to organize the London Workshop. We would also like to thank the London office of Kohn Pedersen Fox Associates, particularly Gene Kohn and executive assistant Lowri Banfield, for hosting and assisting the studio during the weeklong workshop.

PENN FACULTY AND ASSOCIATES David Hsu, Assistant Professor, PennDesign

John Landis, Crossways Professor of City and Regional Planning, Department Chair, PennDesign Laura Wolf-Powers, Assistant Professor, PennDesign

PENN STAFF

Roslynne Carter, Administrative Assistant, PennDesign Kate Daniel, Department Coordinator, PennDesign

Kait Ellis, Executive Secretary to the Dean, PennDesign

PROFESSIONAL ASSOCIATES Al Engel, Al Engel Consulting

Doreen Frasca, Frasca and Associates

Stephen Gardner, Vice President, Policy & Development, Amtrak Michael Likosky, Senior Fellow, NYU Institute for Public Knowledge; Director of the Center on Law & Public Finance, Social Science Research Council Donnie Maley, Northeast Corridor Commission Matthew Rao, Analyst, AECOM

David Seltzer, Mercator Advisors

Richard Voith, Principal, Econsult Corporation

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LONDON WORKSHOP FACULTY John Barna, Vice President; National High Speed Director, AECOM

Armando Carbonell, Senior Fellow, Lincoln Institute of Land Policy Mark Dwyer, Director, Cities Lab, Fundaci贸n Metr贸poli

David Kooris, Vice President, Regional Plan Association

Foster Nichols, Assistant Vice President, Parsons Brinckerhoff Mark Pisano, Senior Fellow, University of Southern California Dan Schned, Associate Planner, America 2050; Coordinator, Business Alliance for Northeast Mobility

LONDON WORKSHOP PARTICIPANTS James Bethell, Campaign for High Speed Rail

Mike Bodkin, Director of Growth Areas and Development, Kent County Council Sir Brian Briscoe, Chair, HS2

Neale Coleman, Director, London 2012

Isabelle Dedring, Deputy Mayor for Transport, Greater London Authority Harry Dimitrou, Bartlett Professor of Planning Studies & Director of the OMEGA Centre for Mega Projects in Transport at Development, University College London

Iain Docherty, Professor of Public Policy & Governance, University of Glasgow; Non-Executive Director of Transport Scotland Kathryn Firth, Chief of Design, Olympic Legacy Company David George, Kent County Council

Vincent Goodstadt, Honorary Professor, The University of Manchester

Sir Peter Hall, Bartlett Professor of Planning & Regeneration University College London Lord Michael Heseltine, Former Deputy Prime Minister and Chairman of Haymarket Group Board Peter Hetherington, Editor, Guardian Newspaper

Robin Hickman, Senior Lecturer, University College London Lucy James, Campaign for High Speed Rail

Tony Jordan, Vice President of Development, Canary Wharf Group Martin Simmons, Regional Planner

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Tim Stansfeld, Former Regional Strategy Director, South East Regional Development Agency UK Robin Thompson, Special Advisor to Mayor of London

Robert Upton, Deputy Chair of Infrastructure Planning Commission

Tony Vickers, Kingston University School of Surveying & Planning Ian Wray, Visiting Professor, Department of Civic Design, University of Liverpool

Cecilia Wong, Professor of Spatial Planning and Executive Director of Centre for Urban Policy Studies, The University of Manchester

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Contents EXECUTIVE SUMMARY 11 Introduction 31 CONNECTIONS 45 INTRODUCTION 45 A Legacy on Rails 46 A System on the Brink 48 Many Problems, One Solution 49 Why Rail? 50 Penn High Speed Rail Proposal 51 Phase 1 52 the gateway project 54 Results: Preparing for the Next Century 57 Capacity 57 The Philadelphia Perspective 61

ECONOMIC IMPERATIVE 65

Current Economic Geography 65 Economic Effects 68 Economic Impacts 75 Examples of HSR and Economic Growth 78 Capitalizing on HSR investments: Benchmarks for success 82 PLANNING AHEAD: OLYMPIC LEGACY 87 Introducing a Competitive Grant 90 LESSONS FROM COMPETITIVE GRANTS 92 Philadelphia 93 Conclusion 102

FINANCE STRATEGIES 105 Introduction 105 Summary of Project Costs 108 Regional Resources for Infrastructure Financing 110 Strategies to Capture Local Value Creation 118

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Strategies to Link Public and Private Investments 131 Bringing It All Together 136 Conclusion 139

Institutional Design 141 Current Context of the Northeast Corridor Building Support from the Business Community Coordinating Federal Leadership A Focused Institution for the Northeast EXPEDITED ENVIRONMENTAL REVIEWS A REGIONAL INFRASTRUCTURE BANK

147 147 149 149 152 153

MESSAGING 157

building support for megaprojects 157 THE HS2 MARKETING CAMPAIGN 158 marketing hsr in the northeast corridor 160 Key Stakeholder Groups 164 Messaging Example: Philadelphia 166 Conclusion 167

CONCLUSION 169 References and Citations

174

Appendix 188

Image Credits All images not expressly cited were created by the Studio team. This work is licensed under the Creative Common Attribution, which allows for noncommercial use, contingent on due credit to Penn 2012 HSR Studio.

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View of the Northeast from the International Space Stationi

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EXECUTIVE SUMMARY Introduction With 50 million residents, a $2.6 trillion economy representing 20 percent of U.S. GDP, and ten of the top fifty world research universities, the Northeast is a powerful economic driver for the nation.1 With more than 20 million additional residents expected by 2050, the demands on the megaregionâ&#x20AC;&#x2122;s already strained transportation infrastructure will continue to rise.

Today, every transportation mode in the Northeast is highly congested. Travel by rail, car, or air is increasingly snarled and frustrated by capacity shortfalls. Existing infrastructure is aging and can no longer meet safety and reliability needs. Because economic prosperity is strongly tied to connectivity and mobility, investment in the transportation system is essential to maintain the Northeastâ&#x20AC;&#x2122;s competitive position on the global stage.

The 2010 Penn Northeast HSR studio proposed a provocative long-term solution to the Northeastâ&#x20AC;&#x2122;s capacity problem: two dedicated high-speed passenger rail tracks from Washington, DC to Boston, Massachusetts. With top speeds over 200 miles per hour, and average speeds of around 150 miles per hour, these two tracks will infuse tremendous capacity to the entire Northeast while also adding reliability and reducing travel times along the whole Northeast Corridor (NEC) system. In this proposal travel times between Washington, DC and New York will be cut nearly in half, from 2 hours 50 minutes to 1 hour 30 minutes; and between New York and Boston, from 3 hours 50 minutes to 1 hour 45 minutes. Following the release of the 2010 studio report, Amtrak came forward with its own HSR proposal for the Northeast, which differed in its proposed alignment between New York and Boston but shared the basic service characteristics of the 2010 studio proposal. In 2011, a second Penn Northeast HSR studio focused on the benefits that the HSR network will bring to the Northeast Corridor and how such a network could be implemented and

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High-speed rail will bring everyone along the Northeast Corridor within one hour of Boston, New York or Washington, DC.

funded. Their report included an analysis of and proposal for a multi-tiered service plan that takes full advantage of the increased track capacity to improve rail service throughout the NEC. The 2011 studio also proposed the creation of a singlepurpose public benefit corporation responsible for the finance, design, implementation, and management of the Northeast HSR and related activities in the Northeast Corridor. Shortly after the release of the 2011 studio report, Amtrak announced the creation of a new Northeast Corridor Infrastructure and Investment Development division. This unit of Amtrak focuses on the critical funding, design, and policy decisions related to HSR and to improvements along the existing rail network in the Northeast Corridor. Building on the work of the past two years, this studio offers strategies for economic investments and global competitiveness in the Northeast Megaregion. These strategies begin with an â&#x20AC;&#x153;Early Action HSRâ&#x20AC;? project, which will build new high-speed tracks along the Philadelphia â&#x20AC;&#x201C; New York segment of the corridor, incorporating frequent, reliable, 37-minute service in this segment while also adding new capacity for commuter rail services in the corridor. The benefits of these investments will extend to travelers all along the NEC and in the rail corridors that connect to it.

Penndesign 2012 studio report The 2012 studio also broadens the scope of past studios by providing a comprehensive look at how improvements to the existing transportation network and investments in HSR can strengthen the megaregionâ&#x20AC;&#x2122;s economic competitiveness and help communities grow and benefit from these improvements. The report offers a set of strategies organized in five categories: Connections outlines the current condition of the existing transportation networks in the Northeast and details the Early Action HSR plan and how it can provide the needed capacity increases along the corridor.

Economic Imperative details the economic potential that HSR provides for the megaregion and outlines benchmarks for cities to capitalize on this potential.

Financing presents several possible strategies to use a mix of regional taxes and financing tools to fund the construction and management of HSR on the Northeast Corridor while minimizing the need for federal support. Institutional Design describes the institutional arrangements needed to manage the planning, design, and construction of HSR on the Northeast Corridor.

Messaging demonstrates the importance of generating broad public support for large infrastructure projects and outlines a strategy for advancing HSR and a 21st century rail network in the Northeast Corridor.

HSR in the Northeast megaregion will dramatically reduce travel times, bringing major cities closer to New York and each other.

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Connections The primary challenges presented by the existing rail system include a lack of reliability, inadequate capacity, and uncompetitive travel times via rail. Phase I of this proposed HSR system addresses these issues and provides greatly improved service the 10 million passengers that ride Amtrakâ&#x20AC;&#x2122;s Northeast Corridor each year.2

Amtrak calculates that 22 of 66 Main Line Northeast Corridor (NEC) segments already exceed 75% of practical capacity, and 8 segments exceed 100%. The entire Trenton to New York and intra-Philadelphia segments are now taxed beyond their design. With catenary wires dating back eight decades and trans-Hudson tunnels more than a century old, the passenger rail infrastructure of the Northeast is becoming increasingly unreliable.

The current system is also constrained to the scope of its last major investments, which were made several decades ago. As a result, the system is not designed to accommodate a Northeast Corridor of over 50 million people. Amtrak is limited to two trains per hour north of New York due to the demands of the MetroNorth commuter rail system. New Jersey Transit has reached the limit for trains it is able to operate under the Hudson River during peak hours. New Yorkâ&#x20AC;&#x2122;s Penn Station, the nationâ&#x20AC;&#x2122;s busiest rail hub, is severely congested during rush hour. However, the roads Many of Main Line Northeast Corridor segments are nearing practical capacity, severely hindering their reliability.

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and airspace of the Northeast are even more constrained and congested than the rail. For several reasons, rail improvements will be the most effective means of addressing mobility in the northeast. As such, alleviating the bottlenecks in the current rail system is imperative to mobility in the Northeast, particularly as the population continues to increase. Phase 1 consists of $10 billion in strategic improvements along the length of the Boston to Washington, DC rail corridor and a $30 billion Early Action segment, which features two dedicated HSR tracks from Philadelphia International Airport to the new Moynihan Station in Midtown Manhattan. The Early Action segment also includes a new station at Market East in Center City Philadelphia, two new rail tunnels under the Hudson River to Manhattan, and the expansion of the Penn/Moynihan station complex in New York.

The strategic improvements to the existing rail corridor are designed to extend the benefits of additional capacity, reliability, and time savings to the remainder of the corridor not being served by the Early Action HSR segment. These improvements include track straightening and grade separation to improve operational efficiency, and station expansion to provide more additional space within stations and at track level to accommodate future ridership growth.

The proposed Phase 1 project.

Penndesign 2012 studio report Early Action HSR and the related strategic improvements will be able to solve the mobility problems of the Northeast in a more effective manner than any other type of transportation infrastructure investment. These investments will improve reliability by building new tracks for high speed trains and by improving the existing commuter and regional rail tracks and providing redundancy. Having two new high-speed tracks will not only relieve the existing congestion on the Northeast Corridor, but it will also create enough new capacity to meet the regionâ&#x20AC;&#x2122;s mobility needs for decades. Commuter systems such as New Jersey Transit will benefit from having less congested tracks, two With HSR, PHL will not only be closer to New York, but it may also begin to serve as New Yorkâ&#x20AC;&#x2122;s 4th airport.

new Hudson River tunnels and extra platform and track space available in Manhattan.

Phase I of this project also brings improvements for the regionâ&#x20AC;&#x2122;s air travel. Early Action HSR will bring Philadelphia International Airport within one hour of Manhattan, essentially providing New York City with a fourth major airport. Because Newark Liberty International Airport will also have an HSR stop, many short-haul flights will be able to be replaced with rail service, freeing up valuable space for larger, long-distance flights carrying more people. The increased reliability from these Phase I improvements will also allow passengers to count on train travel as a dependable connection to air travel, rounding out a balanced and robust transportation network for the Northeast Megaregion.

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Economic Imperative A recent report by the Economist Intelligence Unit listed New York, Boston, and Washington, DC among the top ten cities in the world for overall economic competitiveness. The report cited a clear correlation between urban density and productivity. 3 The relatively dense population in the Northeast supports and encourages urbanization and agglomeration economies, which in turn increase productivity. High-speed rail connects people to city centers, reinforcing the benefits of a dense population. The benefits of urbanization include improved access to jobs, education, health care, and a higher quality of life. In addition, high-speed rail may lead to the development of agglomeration economies, an abstract but important benefit that refers to the increase in productivity firms experience from locating near each other. Higher employment densities give businesses and institutions access to a larger and more highly-skilled workforce, allows firms to share resources, and leads to more innovation from the exchange of information. However, while this density is advantageous for economic opportunity and productivity, it poses a challenge to the region with increasing congestion. Historically, the Northeast and the rest of the United States have relied heavily on large

Many industries in the Northeast ares ones that have above average agglomeration elasticities. This indicates these industries will likely respond positively to HSR.

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Many of the worldâ&#x20AC;&#x2122;s top research institutions are located in the Northeast.

infrastructure investments to enable economic growth as the population expands, including the Transcontinental Railroad and the Interstate Highway system. As the level of congestion on our existing networks indicates, it is time for the next generation of major infrastructure investments. HSR in the Northeast Corridor will not only relieve congestion; it will open up new economic opportunities by facilitating agglomeration and urbanization, changing citiesâ&#x20AC;&#x2122; industry mix, connecting academic and research institutions, increasing tourism, and creating both short and longterm jobs. The Northeast is particularly well-positioned to capitalize on the urbanization and agglomeration effects to which HSR will contribute. Researchers in the United Kingdom have found

Penndesign 2012 studio report that some industries are likely to see more drastic increases in productivity as a result of agglomeration, including banking, finance, and insurance. The cities in the Northeast Megaregion have a large proportion of people employed in industries that are likely to see an increase in productivity related to HSR investments. This investment is also likely to strengthen the Northeastâ&#x20AC;&#x2122;s strong network of top-tier research universities, which is one of the regionâ&#x20AC;&#x2122;s great strengths.

Investing in HSR will have other substantial economic effects for the Northeast Megaregion, including job creation, business growth, and tourism spending. According to the American Public Transportation Association (APTA) job generation estimate, this $100 billion HSR project, spread over 25 years, translates into approximately 69,800 direct jobs, 17,500 indirect jobs, and 57,200 induced jobs.4 It will also amount to $360 billion in new business sales and $180 billion in additional GDP. Tax receipts for the federal government would total $32.9 billion, while state and local governments would receive $15.9 billion.5 This report also examines these expected important positive effects in the Greater Philadelphia Area.

Six benchmarks have been identified as being crucial for cities to realize the benefits of HSR investments.

Penndesign 2012 studio report Several international examples demonstrate the clear increase in economic performance as a result of rail infrastructure investments. The studio examined international examples from Germany, the United Kingdom, and France and found that highspeed rail investments enabled but did not guarantee economic growth, particularly in old industrial towns similar to those found along the Northeast Corridor. Drawing on these case studies, this report outlines the steps the Northeastâ&#x20AC;&#x2122;s cities must take to realize the economic benefits of HSR investments. These include improved connectivity and regulatory systems, diversification of their industry mix, investments in job skills and quality of life, and effective political and business leadership. To incentivize cities to prepare for HSR before the service commences, this studio recommends the establishment of a competitive grant designed to encourage cities to meet these benchmarks and insure that the benefits of the HSR investments are realized at the local level. This program would award competitive funds to entities that proposed improvements across these benchmarks. An analysis of Philadelphiaâ&#x20AC;&#x2122;s preparedness for HSR-induced economic development along these benchmarks provides an example for how projects that Philadelphia and other cities could consider for such a grant application.

Financing

While the Northeastâ&#x20AC;&#x2122;s current transportation network constraints and potential HSR-related economic development are compelling

HSR ridership is expected to increase as services become operational.

Penndesign 2012 studio report reasons to proceed with HSR investments, the Northeast will only see these improvements if the system can be financed. The projected ridership of the first phase of the project ensures that HSR is financially viable, and economic analysis demonstrates that failure to build the project will undercut the Northeast’s and the nation’s long-term competitiveness.

Around the world HSR has been built, and is being built, with resources heavily provided by governments that seek to advance technology, improve mobility, increase jobs and support more sustainable forms of urban development. Today’s budget dilemmas make it difficult if not impossible to rely on this strategy. In response, this report outlines policies and techniques adapted from both foreign and domestic experience with large infrastructure projects in a “mix and match” approach. These scenarios are meant to be illustrative but not prescriptive. Both the public and private sectors should be involved in the project because it is complex, and both parties have the potential to benefit from HSR. The federal government, the Northeast megaregion, and individual states and cities all have a stake in the project, and all should contribute to its funding. At the national level, a national infrastructure bank, as well as established loan programs like TIFIA and RRIF could be utilized, as should existing and proposed grant programs. However, recognizing the political realities in Washington, DC this studio sought to minimize federal investment, and to look at ways that Northeast HSR could rise above partisan divisions.

Passenger services can generate revenue for further reinvestment into HSR.

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Conservatative case (top) relies heavily on public grants and tax bond proceeds. Moderate case (center) leverages local tax revenue and federal funding. Best case (bottom) is predominately locally funded.

Based on the guiding principle that transportation should be seen as a utility, like power, water, and communications, for which users pay; the megaregion can lend significant financial support via modest increases in state gas and sales taxes. Proposed increases in these taxes would not only support HSR. This report proposes that $0.75 of every $1.00 raised in taxes would be dedicated to non-HSR infrastructure projects which will support other transportation, energy, and water projects in the Northeast. Moreover, as is explored in Institutional Design, a proposed Northeast Infrastructure Bank could oversee fund allocation. This would create a robust system that will also benefit nonHSR riders. Other proposed tax increases, transportation utility fees, dedications of toll surcharges, and lottery funds could supplement this approach. Cities in the Corridor, which stand to benefit from the introduction of HSR, should also contribute. As such, this report explores local value capture techniques such as tax increment finance, community infrastructure levies, and business rates supplements.

The private sector interests that might participate in financing this system range from private funds to enterprises—including even airlines—that can benefit from utility easements, rolling stock leasebacks, concession agreements, operational efficiencies, and issuance of debt. Beyond easements and leasebacks, revenue streams will also come from passenger ridership revenues, as well as food and beverage, advertising, station area retail, and passenger facility fees. The studio proposes three financing scenarios for the all three phases of the HSR project including the initial Early Action HSR. The three scenarios are based upon the bonded tax proceeds that arise under the three tax models discussed in this report. The models—a conservative case, a moderate case, and a best case— can be briefly summarized as follows:

Conservative case: The lowest rates of sales and gas tax increases are used to issue bonds, which comprise 16.5% of the total sources. Because the megaregional contribution is limited in this case, the federal government would be asked to provide 80% of project sources; 41% as debt and 39% as equity. The remaining 3.5% is contributed locally via bonded value capture techniques. Phase 1 relies more heavily on public grants and tax bond proceeds. However, by Phase 2 the entire line is able to service its debt. By 2065 the net cash flow of the project is $2.3 billion. The net present value (NPV) of the project from 2016 through 2065 at the social discount rate of 3% is $9.2 billion.

Moderate case: Moderate gas and sales tax increases in the region and nation contribute approximately 47% of total project sources. Only 9.5% of the sources are in the form of federal grants, while federal loan programs comprise 38.5%. Local value

Penndesign 2012 studio report capture techniques account for 5% of total sources. The bonded tax proceeds more than cover the construction costs of Phase 1. The remaining proceeds can be rolled in to future phases of construction; or the bonds can be resized and staggered to be issued as needed. Because there is less debt in this scenario, the NPV is $20.9 billion.

Best case: Higher gas and sales tax increases in both the megaregion and the nation comprise approximately 75% of total project sources. Importantly, federal grants are negligible (<0.1%), and federal loans are 17.5% of total project sources. Value capture covers the remaining 7.5% of sources. The bonded and sales tax proceeds cover in excess of Phase 1 construction costs. This scenario assumes that the megaregion pays for the majority of the project through bonded tax proceeds. Because there is even less project debt in this scenario, the NPV is $26.3 billion. By creating the opportunities for substantial investment in HSR and other infrastructure projects through the use of creative techniques, we can ensure that burdens are spread equitably throughout the region.

Institutional Design

The 2011 Penn Northeast HSR studio proposed that a singlepurpose public benefit corporation (PBC) be established to oversee the financing, design, construction, and management of the Northeast Corridor, including HSR. Under the studio’s proposal, the PBC, which the studio called the Northeast Corridor Systems Authority (NECSA), would be charged with financing, designing, building and managing HSR and a modernized commuter and inter-city rail infrastructure in the Northeast Corridor. NECSA would function as an independent, politically autonomous, transparent, and directed organization that could advance this large project in ways that existing institutions could not. There remain, however, strong structural and political arguments for keeping the Northeast Corridor’s future under Amtrak’s control. Amtrak was given a unique set of powers by the Congress, including eminent domain authority, the right to operate trains on privately owned rail rights of way, and the ability to hire staff and procure services in an efficient way, which would be difficult to replicate today. Following the release of the 2011 Penn studio report, Amtrak demonstrated its commitment to transforming the Northeast Corridor by establishing a special Northeast Corridor Infrastructure and Investment Development Division to administer this project. Amtrak’s new division has a core team of highly skilled engineers, planners and project managers with the

Penndesign 2012 studio report experience and expertise to make this project a reality. However, it must have additional financial resources, as well as the support of Congress, the states, private investors and the public to effectively improve mobility in the Northeast through upgrades to the existing system and the construction of new, dedicated, highspeed tracks. This studio explored the possibility of expanding and developing the Northeast Corridor Infrastructure and Investment Development Division to deliver HSR. Another possibility could be the inclusion of a new special purpose entity within Amtrak that has the ability to promote multi-level stakeholder engagement, build support from the business community, and coordinate federal leadership, so that it can successfully promote, implement, and operate HSR in the Northeast Corridor. In either model, this division must have the following responsibilities: • Planning for Northeast Corridor infrastructure

• Preliminary and construction engineering for the right-of-way • Selection of franchisee(s)

• Evaluation of technologies

• Direct acceptance of grants

Ability to let contracts for design, construction, and operation • Autonomous use of powers granted to Amtrak in the Rail Passenger Act of 1970

• Efforts to minimize risk and maximize private investment and return, including the management of environmental risk • Ability to partner with private entities

For the Northeast Corridor, supporting Amtrak’s new business division and its ongoing efforts to improve the northeast corridor can provide the leadership and direction needed for HSR implementation. Environmental Review Process

For HSR to be implemented in the Northeast Corridor, the project is undergoing a rigorous environmental review process, led by the Federal Railroad Administration. This environmental review process involves a Tier-I environmental impact statement, or Programmatic EIS (P-EIS), which analyzes a program or large project on a broad scale for its environmental feasibility. For HSR, the programmatic environmental impact assessment includes a statement of purpose, analysis of alternatives, development of preferred alternatives, and evaluation of corridor-wide environmental impacts and public outreach.6 The P-EIS is a document that not only takes into account existing Corridor conditions, but also one that incorporates (and potentially limits) future considerations.

Penndesign 2012 studio report Currently, the primary guiding document for rail planning decisions is Amtrak’s 1978 P-EIS. Therefore, a new programmatic environmental assessment presents the unique opportunity to define the bold alternatives for the implementation of high-speed service in America’s Northeast. The document’s exploration of rail alignment alternatives and environmental impacts today will set forth the parameters that projects in the future will

inherit. Therefore this process must include early stakeholder engagement and a coordinated effort to collect and share data to streamline the environmental review process.

Because the FRA Tier 1 process is expected to take more than three years, however, it will be important to identify key investments that are covered by Amtrak’s 1978 EIS or other EIS documents. These could include the Gateway Tunnels under the Hudson River, which were the subject of extensive environmental reviews under the previous ARC tunnel proposal. Other improvements, such as expansion of Union Station in Washington, DC and Boston’s South Station, and key bridges and tunnels the length of the corridor, might be able to be broken out of the Tier 1 reviews for early action design and construction. A Regional Infrastructure Bank

Modernizing Amtrak’s Northeast Corridor Line is by no means the megaregion’s only large infrastructure need. Due to the same policies of deferred maintenance and scarce federal funding that have taken their toll on Amtrak, the Northeast’s other transportation, water, and energy infrastructure is aging beyond its useful life. Over the last thirty years, the level of federal

The growth of Amtrak’s new division will further the project and coordinate multi-level and multistate collaboration.

Penndesign 2012 studio report funding typical of the postwar years has waned as successive generations of lawmakers have reduced the governmentâ&#x20AC;&#x2122;s capacity to take in the necessary revenue. In the absence of federal funding, states and municipalities have levied taxes upon themselves to fill the funding gap left by the federal government. To incentivize new state infrastructure investments and to provide the Northeast with a reliable, apolitical source of infrastructure funds, this report proposes the creation of a Northeast Infrastructure Bank (NEIB). In this model, 25% of the funds raised from state and local sources would be dedicated to high-speed rail, while the remaining 75% would be available for states to invest in the NEIB for transportation, energy and water infrastructure projects throughout the Northeast.

While the NEIB has much promise, it requires several provisions to gain the support of states in the Northeast megaregion. In order for the NEIB to work politically, most or all of the following provisions should be met: â&#x20AC;˘ In the early stages of the NEIB, the federal government will likely need to provide a financial incentive to encourage state participation. An effective PR campaign for HSR would need to include diverse and consistent messages.

â&#x20AC;˘ The NEIB should place a strong focus and direct its investments on large, multi-state investments like the Northeast Corridor that will benefit the entire megaregion. Doing so will allow multiple states to realize benefits and encourage collaboration across states.

Penndesign 2012 studio report â&#x20AC;˘ It will be important for states to get back most or all of the money they contribute to the NEIB or at least receive major benefits from investments in adjoining states.

Developing a Northeast Infrastructure Bank would provide the megaregion with a dedicated funding source for infrastructure investments that are critical to the regionâ&#x20AC;&#x2122;s future.

Messaging

Broad public support will be vital to making significant transit improvements in the Northeast Megaregion. Our research into success factors for major infrastructure investments in the U.S. and overseas documents the essential need to create clear messages to build for strong public support for these projects. This report outlines important lessons from this experience that could inform efforts to build public support for Northeast Corridor rail improvements, including the importance of engaging the business community and public sector leadership. 7 The High Speed 2 (HS2) marketing campaign in the United Kingdom in 2011-12 provided a case study for successful public outreach. The campaign, aiming to galvanize support for HS2 from the public, used three distinct strategies: on-the-ground public outreach, a consistent message delivered in varying ways, and appealing, digestible facts.

This studio report builds off of the successful HS2 campaign to propose an effective PR campaign in support of the Early Action HSR project. This strategy would develop diverse but consistent messages based on interviews and focus groups and identifies target stakeholders for messaging and idea exchange. This report lays the groundwork for a successful campaign by highlighting its strategic importance and suggesting content that would be compelling and educational. Drawing on other domestic examples such as Denverâ&#x20AC;&#x2122;s FasTracks campaign, this section concludes with a messaging strategy to build public support for Early Action HSR in Philadelphia. These messages focus on local leadership, greater travel options, and job creation. The concise and meaningful messages concern three fundamental benefits of this project: equity and choice, capacity, and strategy and investment. Within these fundamental benefits, this strategy includes several pointed messages related to the benefits of Early Action HSR. These messages would be shaped by and directed to key stakeholder groups: the general public, local and private interests such as local business organizations, small businesses, and private investors, and public entities, including Federal agencies, state agencies, city governments, and passenger rail providers.

Penndesign 2012 studio report

Investing in high-speed rail has the potential to catalyze economic growth and improve the quality of life in Northeast cities.ii

Conclusion Americans are used to paying for most utilities through a monthly bill. However, transportation has typically been financed indirectly through gas taxes or land value increases. When rail was first constructed in the Northeast, railroad companies subsidized fares with money from real estate assets including proceeds from land and air rights sales and rents for apartments, homes and offices. Federal and state gas taxes enacted in 1956 built the Interstate Highway System and the major roads that most Americans use every day. However, recent proposals in Washington, DC and state legislatures to raise the gas tax to continue to fund transportation have become increasingly controversial, yet we still need to find ways to finance these important investments. The systems financed by these dedicated taxes were built to provide mobility through the early 21st century, enabling a fivefold increase in U.S. GDP over a 50-year period. Today, these systems are at or approaching capacity. It is time to act to create a balanced transportation system that can deliver the capacity which current and coming generations of Americans, and residents of the Northeast in particular, will need to sustain our competitiveness and standard of living for the next half-century.

Penndesign 2012 studio report Drawing on international examples in the United Kingdom, Germany, and France, this studio presents a strategy for the planning and implementation of HSR in the Northeast Corridor, including a detailed Early Action HSR plan to maximize benefits from the project’s early stages, benchmarks for cities to realize full economic development potential, several possible financing schemes, guidelines for collaboration and institutional design for implementation, and how to communicate the importance of the project to the public. The last time this country was faced with a mobility crisis, our answer wasn’t just to fix what we had, build more of the same kind of roads, or build the same kind of mass transit system. We made a quantum leap with the construction of the Interstate Highway system. We invented an entirely new kind of road, and then proceeded to shape our country around it.

As a result, we provided the single biggest expansion of human mobility in the world’s history. And now half a century later we need to make the next quantum leap. We need to ask, how we can build new capacity in our mobility system to improve the lives of this generation of Americans, and that of our children and grandchildren. How much better off can we be in ten years? In fifty years? How far can we go?

We used to ask those questions, and got a resounding answer: we can go farther, faster, and better than any generation before us. It’s time for this generation of Americans to demand that we do this again, and demonstrate the value of high-speed rail in the nation’s oldest and densest area, the Northeast. Building on this experience we can make similar investments in the nation’s other megaregions, creating capacity for growth in the nation’s mobility system needed to power America’s success through the 21st century.

Penndesign 2012 studio report

View Speed High of the Train Northeast at St.from Pancras the International Station, London Space Stationiii

Penndesign 2012 studio report

Introduction OVERVIEW The Northeast is one of America’s most competitive megaregions. With 50 million residents, a $2.6 trillion economy representing 20 percent of U.S. GDP, and ten of the top fifty world research universities, the megaregion is a powerful economic driver for the nation.1 With more than 20 million additional residents expected by 2050, generating millions of new trips, it is critical to address capacity issues by providing a network of optimized and efficient infrastructure to accommodate this growth. Today, every transportation mode in the Northeast is congested. Travel by rail, car, or air is increasingly snarled and frustrated by capacity shortfalls. Existing infrastructure is aging and can no longer meet safety and reliability needs. Because economic prosperity is tied strongly to connectivity and mobility, investment in the transportation system is essential to maintain the Northeast’s competitive position on the global stage. As with all major projects, investment in transportation will take time, money, and a commitment to invest in the region’s future. The costs of not taking action, however, will be even higher. Investments in the Northeast Corridor today will create new economic opportunities and reinforce the megaregion’s status both nationally and around the world. High-Speed Rail, in conjunction with investments in existing rail infrastructure, will allow the Northeast Corridor to remain a prominent economic engine for the United States.

Penndesign 2012 studio report

ENCOURAGING INVESTMENTS & ECONOMIC COMPETITIVENESS A Strategy for Stronger Connections Travel along the Northeast Corridor today can often be difficult, as roads, trains, and airports face growing levels of congestion. Having a balanced transportation system in place that supports mobility and provides stronger connections will support economic competitiveness in the Northeast megaregion. With HSR and strategic improvements along the Northeast Corridor, travelers will no longer need to worry about reaching their destinations late. A reliable and safe transportation mode will allow business travelers, University researchers, and leisure travelers to get to their destinations on time and interact with their colleagues face-to-face. Building a business network based on these personal connections, combined with emerging technologies and web-based tools, will provide even greater opportunities for the Northeast megaregion to grow its interlinked economies.

A Call for Global Competitiveness

The world today continues to “shrink” as technology brings cities, regions, and countries closer. Improvements to infrastructure allow commuters to travel faster and more reliably to their destinations. Many international examples, from the UK and Germany to China, demonstrate how investments in infrastructure can encourage economic growth and strengthen a country’s global power.

For the Northeast Megaregion, investment in HSR and the existing rail infrastructure will provide an essential catalyst for economic growth. The megaregion is already home to one of the world’s strongest economies and cultural centers; making it a home for HSR will enable it to meet its full potential in the future.

Penndesign 2012 studio report

A Need for a Balanced Financing Approach The United States has a history of substantial federal investment in major infrastructure projects. In today’s economic climate, however, the federal government, along with local and state governments, must meet a growing demand for funding with limited resources. Grants have given way to a preference for loans and loan guarantees, which help to spread out investments across the nation and support more projects. Unlike other U.S. rail markets, the strong and growing market for fast, reliable rail travel in the Northeast can provide the fare and other revenues needed to finance loans and repay public and private investors for these investments.

With this in mind, finding new ways to fund and finance major projects is essential. A project like HSR and other improvements to the Northeast Corridor’s existing rail network will require financial support from a variety of stakeholders, including local municipalities and states. By leveraging local and state contributions and involving private sector entities, federal resources can help jump-start construction and provide gap funding to bridge remaining needs. With cities, states, and the Northeast megaregion standing to benefit from such investments, promoting a “mix and match” strategy involves all of these stakeholders and encourages them to participate.

A Way to Build Public Support

Public support for major infrastructure projects is often limited. Voters may be unaware or unclear about the origins of such projects and the benefits they can offer as well as the need to continue maintenance and reinvest in upgrades and extensions. Educating the public and elected officials about the opportunities for better communities, connections, and capacity can help garner support for projects like HSR and related rail improvements to the Northeast Corridor. Having strategies in place to start and continue the conversation about why these investments are needed, how they will be funded, and what benefits they will provide are crucial to their successful implementation in the Northeast Corridor. This report continues the conversations started by past Penn Northeast HSR studios and looks to provide new and innovative ways for promoting and implementing such investments in the Northeast Corridor.

Penndesign 2012 studio report

The 2010 Penn Northeast HSR studio In 2010 a University of Pennsylvania School of Design graduate studio proposed a provocative long-term solution to the Northeast’s capacity problem: two dedicated highspeed passenger rail tracks from Washington, DC to Boston, Massachusetts. The PennDesign team devised an HSR route that utilized the existing Northeast Corridor from Washington, DC to New York, then proceeded on a new alignment east into Long Island, north under Long Island Sound, up through central Connecticut, and northeast again to Boston. The HSR route is a complement to, not a replacement of, the existing shoreline corridor through Connecticut and Rhode Island, which will also be upgraded for commuter and regional rail service.

With top HSR speeds over 200 miles per hour, and average speeds of around 150 miles per hour, these two tracks will create the necessary capacity for a fraction of the cost of expanding the use of existing modes. It will provide the entire Northeast with tremendous capacity while bringing underperforming cities and regions into the megaregion’s economic mainstream. Approximately half of the 888 new track-miles required will be built within or adjacent to the right-of-way (ROW) that is already used for passenger rail. This includes the Amtrak Northeast Corridor from Washington, DC to New York and the Long Island Railroad from New York City to Ronkonkoma. About one fourth of the system will be built within or adjacent to highway ROW, notably the I-91, I-84 and I-90 corridors in Connecticut and Massachusetts. One fifth of the system (87 route miles in total) will consist of new tunnels under densely-developed urban areas or through irregular topography. These tunnels will not only serve to straighten curves in the current system that cannot support higher speed service, but they will also allow HSR to penetrate to the heart of the megaregion’s densest urban centers. The remainder of the route will be built along utility or freight rail rights-of-way, comprising just eight percent of the total route.

Penndesign 2012 studio report Following the release of the 2010 studio report, Amtrak came forward with its own HSR proposal for the Northeast, which differed in its proposed alignment between New York and Boston but shared the basic service characteristics of the 2010 studio proposal. It also gave a similar estimate for the cost of such a system, with both the Penn and Amtrak reports suggesting that approximately $100 billion will be required to implement the full system.

The cost of such a system is significant, but it pales in comparison to the additional growth it will enable in the Northeast. Because the Northeast depends on strong and well-linked metropolitan economies, the benefits of such a transformational investment in the megaregion will have positive regional and national impacts.

The 2010 HSR Alignment.i

Penndesign 2012 studio report

The 2011 Penn Northeast HSR studio In 2011 a second School of Design graduate studio focused on the benefits that the HSR network would bring to the Northeast Corridor and how such a network could be implemented and funded. The final report of the 2011 Penn Northeast HSR studio, High-Speed Rail in the Northeast Megaregion: From Vision to Reality, continued the case for HSR through analyses addressing the costs and benefits, institutional arrangements, ridership, financing, and public support.

The studio presented persuasive arguments to communicate the full benefits of HSR to elected officials and public stakeholders across the country. These arguments were organized around the themes of system balance and capacity optimization, institutional innovation, financial viability, metropolitan roles, and public campaigns. They focused on the following questions critical to building support for HSR in the Northeast megaregion: • What can HSR do for America? • How do we implement it? • How do we pay for it?

• What is the metropolitan role in implementation? • How do we build public support?

As part of its recommendations, the 2011 Penn Northeast HSR studio put forth a proposal for a single-purpose public benefit corporation (PBC) that would be responsible for the financing, design, implementation, and management of Northeast HSR and related activities in the Northeast Corridor. The structure of this PBC developed from the studio team’s research on multiple institutional models both in the United States and in Europe, including England, Germany, and Spain. The PBC, called the Northeast Corridor Systems Authority (NECSA), would lead efforts to establish HSR and support initiatives to revitalize existing rail infrastructure in the Northeast Corridor.

Shortly after the release of the 2011 studio report, Amtrak announced the creation of a new division for Northeast Corridor Infrastructure and Investment Development. This division of Amtrak focuses on critical funding, design, and policy decisions related to HSR and to improvements along the existing rail network in the Northeast Corridor. The creation of this entity represents an important step forward for HSR in the Northeast Corridor and will help build support for the project.

Penndesign 2012 studio report

In the coming months, Amtrak will release an update to its 2010 HSR proposal that will address issues surrounding alignment, ridership, revenue, costs, and implementation. Like the 2011 Penn Northeast HSR studio, Amtrak supports the development of an institutional arrangement that will expedite convenient, safe, and reliable rail service for Northeast Corridor passengers.

Providing this institutional framework lies at the core of implementing HSR in the Northeast Corridor. Having a decisionmaking body that can organize stakeholders, integrate funding streams, and coordinate efforts will help to build further support for HSR. This entity would also encourage cities in the Northeast megaregion to experience the full benefits of HSR and allow them to expand their regional, national, and international connections in todayâ&#x20AC;&#x2122;s global marketplace.

The 2011 Service Plan.II

Penndesign 2012 studio report

CALIFORNIA HSR California and the Northeast are the two most viable corridors for HSR in the country. HSR investments can provide solutions to many of the infrastructure, environmental, and economic challenges facing California and the Northeast. Like in the Northeast, the state’s existing transportation systems are straining to meet the current demand. Each year, $18.7 billion are lost due to time spent in traffic and on wasted fuel resulting from road congestion. Flights from Los Angeles to San Francisco, which make up the busiest short-haul market in the United States, are the most delayed in the country: approximately one in every four flights is at least one hour late. Demand on these systems will continue to grow, as California’s population is projected to increase by 20 million, or the entire current population of New York state, over the next 4 decades. California’s High-Speed Rail is designed to extend from San Francisco in the north, pass through the Central Valley, and connect to Los Angeles and Anaheim in the south. The line is slated to eventually extend from San Francisco to Sacramento and from the Los Angeles area to San Diego, covering approximately 800 miles and connecting 24 stations in its final build-out. The High-Speed Rail project in California is under the direction of the California High Speed Rail Authority (CHSRA), a state entity responsible for planning, constructing, and operating the high-speed rail network. The project began as a quiet movement with only a few employees in 1996. More than 10 years later, CHSRA put a ballot measure to the voters to fund the project in the 2008 election. After an effective campaign leading up to the 2008 election, the California voters passed Proposition 1A by a margin of 53% to 47%, authorizing $9.95 billion of general obligation bonds to build the California HSR system. The bonds will be repaid by state tax revenue. 2012 Business Plan: After the original proposition and the initial business plans were met with significant pushback, the CHSRA reworked the HSR proposal with the charge of producing a better, faster, and cheaper plan. The result is the Revised 2012 Business Plan, which outlines the phasing and funding of the project. The latest business plan maintains early focus on the original first leg through the Central Valley, but it supplements this with targeted investments around San Francisco and Los Angeles. The new business plan also works to blend the new high-speed services with the existing rail systems in order to “accelerate and broaden [investment] benefits, improve efficiency, minimize community impacts, and reduce construction costs while enhancing rail service for travelers throughout the state.” Phasing: The first phase of the new plan has several steps. The first step calls for the construction of dedicated HSR tracks through the Central Valley. Known as the Initial Operating Section (IOS), this is scheduled to open in 2018. This link will connect with other regional commuter systems and cut travel time on the country’s fifth busiest Amtrak line. It also allocates existing Prop 1A funding for immediate improvements in local rail systems, including electrification of the Bay Area’s Caltrain Corridor, linking other commuter services, and closing the existing rail gap between Bakersfield and Palmdale. These early investments in the San Francisco and the Los Angeles areas aim to upgrade existing services, build ridership, and prepare the regions for the eventual expansion of the high-speed system. The second step of the first phase is the 300-mile section between Merced and the San Fernando Valley, which is scheduled for completion in 2022. This segment will operate without a subsidy and has the potential to attract private investment. The third step in Phase I connects the Central Valley to San Jose, connecting the Bay Area to the Los Angeles basin on a fully electrified link. This service is expected to launch in 2027. The final step in the first phase involves blending high-speed services with

Penndesign 2012 studio report

existing systems. This includes regional and local improvements such as eliminating at-grade crossings and adding new passing tracks. These upgrades will extend dedicated high-speed infrastructure from the San Fernando Valley to Los Angeles Union Station. An upgraded Metrolink corridor will extend to Anaheim and connect to commuter systems throughout the Los Angeles area. This entire phase, scheduled for completion in 2029, will run the full 520-miles from San Francisco to Los Angeles/Anaheim. Phase II will extend this high-speed service from San Francisco to Sacramento and from the Los Angeles area to San Diego, bringing the total system mileage to 800 miles. However, these regions will begin to see improvements before the project reaches Phase II due to the new blended approach that has been incorporated into the Phase I planning efforts. Funding: The adoption of the new phasing and blended approach in the most recent business plan lowered the overall cost of Californiaâ&#x20AC;&#x2122;s HSR project by nearly $30 billion. As of April 2012, the latest cost estimate was $68.4 billion. This new approach also allows the program to progress in phases, meaning that the work can be matched as funding becomes available. This funding is a mixture of federal, state, and private sources, allowing the private sector to design, build, and operate the system. The first step of Phase I, the IOS, will be funded from a combination of federal and Proposition 1A funding. Once the operations have commenced, the project will see private-sector capital investments and will be able to access state cap-and-trade funds. The current financial model transfers significant design, construction, cost, and schedule risks to the private sector and maximizes efficiency by capturing the advantages of private-sector innovation. It uses tested, conservative ridership projections, and it demonstrates that HSR is viable in California even in the most conservative scenarios. The California HSR financial proposal differs from the NEC HSR proposed here in that it relies heavily on federal grants and loans. While approximately 60% of the total California project costs are covered by Federal sources, this plan for the Northeast Corridor seeks to minimize the federal involvement. Because the California project will serve as a tidemark against which future high-speed projects will be measured, its success will largely impact the level of federal support for HSR in the Northeast. There is potential for both projects to receive federal support in the upcoming reauthorization of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), which is expected to be reauthorized by the Congress in the next few years. In addition, the success of HSR in California is important to demonstrate the viability and importance of investing in major infrastructure projects.

Penndesign 2012 studio report

The reliability of HSR in Japan.iii

Penndesign 2012 studio report

Continuing the Case for High-speed Rail This year’s studio continues to advocate for HSR. Over the past year, discussions about HSR have escalated. California is moving forward with plans to develop its HSR system, running from San Francisco to San Diego, with a similar mix of phasing and blended service to that proposed in this report. Congress continues to debate transportation policy and proposals for a national infrastructure bank. The Federal Railroad Administration has started the environmental review process for modernizing the Northeast Corridor and incorporating HSR into a revitalized rail corridor. With road and air congestion growing, the call for additional capacity in the Northeast megaregion intensifies. What has not changed is the need to find innovative ways to promote and fund investments in transportation infrastructure. With the alignment proposed by the 2010 Penn Northeast HSR studio and the plan presented by the 2011 Penn Northeast HSR studio to implement, pay for, and build support for the project, this year’s studio offers strategies for economic investments and global competitiveness in the Northeast Megaregion. These strategies are organized around an “early action” project which would rebuild the Philadelphia – New York segment of the corridor, incorporating frequent, reliable, 37-minute HSR service in this segment while also adding new capacity for commuter rail services in the corridor. Early Action HSR would also correct several other bottlenecks in the corridor between South Station in Boston and Union Station in Washington, DC. This proposal mirrors that of California HSR, for which Phase 1 consists of high speed tracks along Amtrak’s fifth busiest line coupled with local rail improvements.

This 2012 Penn report, A Competitiveness Strategy for the Northeast Megaregion: Early Actions for High-Speed Rail also broadens the scope of the past studios. It provides a comprehensive look at how improvements to the existing transportation network and investments in HSR can strengthen the megaregion’s economy and help communities grow and benefit from these efforts. The report offers a set of strategies premised on three facts: improved transportation in the Northeast Megaregion will accommodate inevitable population growth while catalyzing industry growth; adding this capacity through strategic investments will lead to economic development and will result in new choices and opportunities for people who live in the Northeast which will enhance the region’s global competitiveness. The report uses the following questions as guidance:

Penndesign 2012 studio report How can we build and strengthen the Northeast Megaregion’s legacy transportation connections and address the need for more capacity? HSR in the Northeast Corridor, coupled with related improvements to the legacy system, will help to address the megaregion’s capacity issues, provide faster and more convenient travel methods for commuters, and reduce the need for many of the megaregion’s daily short-haul flights. This will open up airports such as Philadelphia International to more profitable long-distance service. Phase I of this project will link the Northeast’s two biggest cities, New York and Philadelphia, with HSR and stronger commuter rail systems. How does implementing a modernized transit system retain and advance the strategic advantages of the Northeast Megaregion?

Cities along the Northeast Corridor and other cities on connecting rail lines, will benefit greatly from the connections to markets and to people that improvements to the transportation network in the Northeast megaregion will provide. International case studies show that HSR in the Northeast may facilitate agglomeration and urbanization, unite businesses with labor and inputs, and increase the Megaregion’s overall productivity. However, those same studies indicate that simply building HSR is not enough; cities must position themselves to capitalize on the investment by providing network connectivity, a complementary regulatory environment, a receptive industry mix, human capital development, high quality of life, and strong leadership. How can we leverage funding sources to support an integrated financing approach? With today’s economic and political challenges, funding HSR and related improvements in the NEC will require a “mix and match” approach. Leveraging potential local and state funding streams, along with later opportunities for private involvement, will help to diversify risk and allow the strategic use of federal resources. How can we provide avenues for implementation?

Institutional design is a crucial component of a successful HSR strategy. Having an entity responsible for leading the project and its eventual operations will help to provide leadership and support progress of the project. Identifying the qualities that such an entity will likely need to have is the first step. The establishment of a regional infrastructure bank could also help to strengthen connections across the Northeast megaregion and provide support for infrastructure investments.

Penndesign 2012 studio report How do we persuade government leaders, private sector businesses, and the American public to invest in integrated transportation infrastructure? A diversely expressed but consistent message is key in advocating for these investments. Various aspects of both the entire package of upgrades as well as Early Action HSR will appeal to different markets, but the overall messages will be coordinated to drive home the necessity of upgrading our transportation system. A particular focus on gaining the support of the business community will be imperative to allow the project to move forward. Overall, the goal is to shift the public opinion from a focus on “consuming” to a commitment to investing in transportation as a utility. What does this look like for Philadelphia?

As U.S. Supreme Court Justice Louis Brandeis once noted, “It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Our studio’s laboratory to develop the strategy has been Philadelphia. This report provides throughtful ideas on how HSR might affect the city, and new ways Philadelphia can capitalize on this major investment.

Penndesign 2012 studio report

St. Pancras Station, London

Penndesign 2012 studio report

CONNECTIONS INTRODUCTION The 2012 Penn Northeast HSR studio visited London in March 2012 to learn about the United Kingdom’s experience in financing and operating improved rail service both in London and on inter city and HSR routes. One of the UK’s major investments in recent years has been the modernization of the West Coast Main Line (WCML), the busiest inter city railroad line in Great Britain. This line connects London to the industrial Northern cities of Birmingham, Manchester, and Liverpool and ultimately continues on to Edinburgh and Glasgow in Scotland. The core section of the route runs from London to Birmingham and carries all of the freight and passenger traffic bound for the western half of Great Britain. After World War II, the WCML was nationalized and modernized, with electrification coming in stages between 1959 and 1974. Modern coaches were added, bringing the top speed up to 125 mph and reducing journey times between London and the North. By the 1990s, this lifeline to the North, now privately owned and operated, was decaying and in desperate need of state of good repair and capacity improvements. Ambitious plans for a high-speed rail upgrade were shelved in favor of a £9 billion ($14 billion) repair and signal modernization program, which disrupted service for well over a decade and delivered the marginal service improvements that it promised.

The WCML modernization project improved reliability, but did not address future traffic growth. Ridership and freight projections indicate that despite the UK’s £9 billion investment, the WCML will be out of capacity by 2024. The only solution to the capacity problem is to create new high-speed tracks alongside the existing WCML -- exactly the solution that was proposed but canceled in the 1990s. Faced with the looming capacity crunch, today the UK is investing billions of pounds into the High Speed 2 (HS2) project, which will deliver true high-speed intercity

Penndesign 2012 studio report service to the North in a new right-of-way (ROW), providing the capacity for decades of growth and better linking the financial powerhouse of London to the UK’s major industrial cities. Today’s Northeast Corridor (NEC) looks much like the WCML of the 1990s. Deferred maintenance has taken its toll on the railroad even as growing rail traffic congests the railroad as it never has before. Amtrak calculates that 22 of the 66 Main Line NEC segments already exceed 75% of practical capacity, and 8 segments exceed 100% of practical capacity. The entire Trenton to New York and intra-Philadelphia segments are now taxed beyond their design. The NEC can learn a significant lesson from the UK’s WCML experience. With traffic continuing to grow and many sections of railroad already operating above capacity, it is not enough to simply repair and “modernize” the existing corridor. To meet future demand, new capacity must be provided in the form of dedicated high-speed tracks, starting with the most capacityconstrained, overtaxed segment from Philadelphia to New York.

A Legacy on Rails

In the 19th century, the Northeast Megaregion was the epicenter of the greatest age of railroad building in history. Juggernaut companies like the B&O, Pennsylvania, Reading, and New York Central Railroads built thousands of miles of track connecting the cities of the Northeast to each other and to the rest of the country. In the industrial city cores, independent railroads competed for riders by building expansive surface, elevated, and subway rail systems. The central section of the NEC, stretching approximately 90 track-miles from Philadelphia to New York City, was built in segments during the 19th century. By the early 1900s, the famous Pennsylvania Railroad owned the line, and electrified it between 1918 and 1937. The two tunnels that provide access from New Jersey into New York City were built by the Pennsylvania Railroad in 1910 and electrified in 1932. The late great Pennsylvania Station, with its inspiring Roman hall and modern metal train room, was also built by the Pennsylvania Railroad in 1910 to serve as the gateway to New York City. The southern NEC, from Philadelphia to Washington, DC, was built by the antecedents to the Pennsylvania Railroad, while the northern section, extending from New York to Boston, was built by the companies that would ultimately form the New York, New Haven and Hartford Railroad.

The great railroad companies of the 19th century have come and gone, but millions of commuters and inter-city travelers each year use the thousands of miles of resilient track built two

Penndesign 2012 studio report

Amtrak and local transit agencies operate a dense, connected network of heavy and commuter rail lines.

Penndesign 2012 studio report centuries ago. This connected infrastructure network extends far beyond the 486-mile mainline NEC. Cities along the corridor use a combined 1,715 miles of railroad for their commuter services. Beyond the corridor, the region is served by four regional intercity services, eight interregional services, and two international services. Residents of the Northeast can travel as far west as Chicago, as far south as Miami and New Orleans, and as far north as Montreal on a single train.

“The Northeast Corridor has had yet another problem for trains coming into Penn Station. It disrupted service for dozens of trains today.” – WCBS News, September 22, 2011

Thanks to its legacy of rail infrastructure, the Northeast is the only region in the country where one can truly choose to live without a car. Indeed, many people do: the Northeast accounts for well over half of the United States’s 10 million commuter and city transit trips per day and a full 85% of all heavy and commuter rail trips.17 The Northeast also contains the two oldest subway systems in the Western hemisphere (Boston and New York City), the highest-ridership postwar subway system (Washington, DC), and a wealth of regional commuter rail lines that connect directly to local transit. Despite yearly funding crises, these systems ferry millions of riders per day through the most congested cities in the United States safely and efficiently.

A System on the Brink

The infrastructure that our great-grandparents built has served us well, but decades of neglect have brought these systems to a breaking point. Since the electrification of the Northeast Corridor railroad in 1932, almost no capacity upgrades other than those dictated by safety and state of good repair have been built along the line. The Northeast Corridor Improvement Project of the late 1970s brought continuous-welded rail and concrete ties, an advanced signaling system, bridge rehabilitations and repairs, electrification improvements, station upgrades, and some grade separations. Due to funding restrictions, several of the improvements, including electrification north of New Haven, were left incomplete. For all intents and purposes, the more than 10 million inter-city passengers and the hundreds of millions of commuter rail riders who use the NEC each year are using a system that predates the invention of the television.

Today, as ridership along the NEC hits record levels, this system is finally showing its age. The trans-Hudson tunnels that provide the only access for Amtrak and New Jersey Transit (NJ Transit) into and out of New York operate at 100% capacity during peak hours. Peak traffic puts tremendous strain on these 101-yearold tunnels. With no alternative route, they cannot be taken offline for maintenance for more than a few hours each night. As a result, headlines such as “Trains Stuck in Hudson River Tunnel” are becoming commonplace.1 Without a major upgrade,

Penndesign 2012 studio report these catastrophic breakdowns will become a fact of life for NEC commuters. With two century-old tunnels serving as the lifelines in the busiest travel corridor in the country, the potential grows yearly for a truly catastrophic failure of one or both of these antique facilities.

Despite the Corridorâ&#x20AC;&#x2122;s reliability challenges, traffic continues to grow. NJ Transitâ&#x20AC;&#x2122;s Northeast Corridor Line, which handles approximately 56,300 trips per day, has experienced consistent 3% annual traffic growth, even during the global financial collapse of 2008-2009.2 Today, it is upgrading its NEC rolling stock with double-decker coaches to meet demand; however, these new coaches only offer 20% more seating space.3 At the present growth rate, this $330 million capacity expansion project will be completely used up by 2018.

Many Problems, One Solution

Just as it is being asked to carry more people than it ever has before, todayâ&#x20AC;&#x2122;s NEC is suffering from its advanced age. To maintain reliable service and to head off an inevitable major failure, the railroad must be brought to and beyond a state of good repair.

Bringing the railroad back to a state of good repair will increase reliability and capacity, but only marginally. By 2035, it will still be operating at or near 100% of its design capacity, reducing reliability for all users. Freight trains, commuter services, and high-speed trains will still share the same two to four tracks, leading to a suboptimal distribution of train slots. A service problem on Southeastern Pennsylvania Transit Authority (SEPTA) or NJ Transit networks will still be able to bring intercity service to a halt and vice versa. The only way to prime the NEC for the next century of growth is to invest now in two new, dedicated high-speed tracks as part of a broader modernization of the corridor.

Dedicated high-speed tracks provide the greatest potential for new capacity because they allow for the separation of different kinds of service. The principle is exactly the same for a railroad or a freeway; if traffic of all different speeds is allowed to use every lane, even the fastest vehicles are limited by those in front of them. A vehicle using the inside express lane and planning to exit must cross the other traffic lanes, creating further turbulence and restricting capacity. By contrast, if the slow traffic is always forced to stay to the outside, higher-speed traffic to the middle, and highest speed traffic to the inside, then each class of vehicle can move at its own top speed without interference from parallel traffic.

Penndesign 2012 studio report Similarly, with different kinds of rail service, additional “lanes” are needed to guarantee optimal operation. When Acela Express began service in 2000, it could not—and still cannot—take advantage of its trains’ increased top speed in the central NEC because it shares the “express” tracks with slower traffic. If Acela were given complete scheduling priority and allowed to run at top speed, it would need such a large slot on the Corridor that it would restrict capacity on the Northeast Regional and commuter services. Without dedicated high-speed tracks, scheduling service along the NEC will remain an exercise in “optimizing the suboptimal.” Bringing world-class high-speed rail to the Northeast Corridor is not about creating a new service for the wealthy, a new toy for engineers, or a new feather in a politician’s cap. It is the only way to meet the capacity needs of today and the next century. The Northeast must invest in its most critical infrastructure just as the Pennsylvania Railroad did a century ago. This investment will allow the Northeast to grow to its full economic and cultural potential as the megaregion competes in the 21st century.

Why Rail?

Despite these constraints on the existing corridor, rail remains the most viable solution to the region’s increasing congestion. Because of the Northeast’s rail heritage and rich density of existing service, the megaregion is uniquely suited to a highspeed rail system. The NEC already attracts a significant number of intercity riders; for example the introduction of higher-speed Acela Express service increased Amtrak’s New York to Boston mode share from 18 to 40 percent.4

In the dense Northeast, rail capacity expansion provides benefits to the highest number of people in the smallest land footprint. While the Penn high-speed rail proposal includes virtually no land acquisition outside of existing rights-of-way, the commensurate amount of air and highway capacity expansion would require hundreds of square miles of new land.

Expanding highway capacity between New York and Philadelphia, for instance, would require the construction of a brand-new Interstate highway parallel to I-95 or the New Jersey Turnpike, but this expansion would serve fewer daily passengers and would still deposit them onto either congested downtown streets or the outskirts of each city.

Expanding air capacity is vital for the growth of the Northeast’s long-haul flight services; however, new capacity at Philadelphia Airport (PHL) and the three New York airports is not a replacement for surface transportation capacity. Air travel is

Penndesign 2012 studio report much more expensive per trip than rail, keeping it out of reach for commuters and other frequent riders. While air travelers must pass through security with its long lines and draconian restrictions, Amtrak riders can arrive to their center city stations mere minutes before departure. Finally, even if the Northeast airports’ physical capacity is increased, intra-regional flights will still be delayed because the region’s low-altitude airways are full.5

Penn High Speed Rail Proposal

The 2010 Penn Northeast HSR studio determined that two dedicated high-speed tracks could be added to the Northeast rail system using a combination of urban-area tunnels and NEC, freight, utility, and highway rights-of-way. With the exception of the urban tunnels, the Penn system proposal adds two tracks alongside the existing NEC from Washington, DC to New York City, follows the Long Island Railroad ROW through to Ronkonkoma

The 2010 Penn HSR alignment proposal and today’s Northeast Corridor main line.

Penndesign 2012 studio report Station, new rail tunnels under Long Island Sound, the New Haven-Springfield Line through Hartford, and a combination of highway and railroad ROW to Boston. The Penn studio proposal also includes the full cost of bringing the existing NEC to a state of good repair. The proposed system would be one of the world’s fastest, sprinting between the major cities of the Northeast Megaregion at an average speed of over 150 miles per hour.6 Travel time from New York to Boston would be reduced to 1 hour 45 minutes, while travel time from New York to Washington, DC would drop to 1 hour 30 minutes. It would allow for frequencies of up to four high-speed trains per hour along the entire Corridor, while today’s NEC can only handle one Acela and one Northeast Regional train per hour. Service between New York and Philadelphia, today’s highestridership market, would increase from one Acela, one Northeast Regional, and one Keystone per hour to five high-speed trains, one Keystone express, one Keystone local, and at least two to four Northeast Regional and inter-city commuter trains per hour. It would also provide Philadelphia’s Market East station with a direct high-speed connection to Philadelphia International Airport (PHL), and New York’s Moynihan Station with a direct high-speed connection to Newark-Liberty International Airport (EWR). The 2010 and 2011 Penn Studio reports estimate the cost of this project, including the two dedicated tracks, all structures and tunnels, station improvements, rolling stock, environmental mitigation, and state of good repair, at between $100 and $103 billion. The 2010 report found that for every dollar spent on this project, $1.70 in benefits will be created.7

For more information on the alignment and cost breakdowns, see Appendix A as well as the 2010 and 2011 Penn studio reports.

Phase 1

The 2012 Penn studio team recommends a phasing strategy that will deliver world-class high-speed rail to the most congested portion of the megaregion by 2025. Phase 1 will bring the Philadelphia to New York main line to a state of good repair while simultaneously building an Early Action high-speed rail capacity expansion along the segment, at an estimated $33.5 billion. Phase 1 also includes an additional $10 billion of improvements that will increase capacity and reliability along sections of the NEC beyond the Philadelphia to New York segment. For a full lineitem list of improvements, see Appendix A. This first phase will not only bring true high-speed rail service to the two largest cities on the East Coast, but will also reduce overall travel times

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for all Northeast rail passengers passing through this segment, promising reliable and consistent service for both commuter and inter-city travelers.

This new track configuration will enable “blended” service: trains will make the journey between New York and Philadelphia via the high speed ROW, while using the existing corridor to the north and south of this segment. Such a configuration decreases the total overall travel time from Washington, DC and Baltimore to New York, for example, without the construction of new highspeed tracks in those locations.

Early Action High-speed Rail for America’s Northeast

The Early Action High-speed Rail project is the introduction of two new dedicated high-speed tracks between a point south of PHL and New York’s Moynihan Station, which will be reached via a new pair of rail tunnels under the Hudson River. In addition, the existing traditional rail corridor will be modernized and upgraded, meeting the capacity requirements of the corridor for commuter rail and regional intercity services of the 21st century. The new high-speed tracks will diverge from the current NEC near the interchange of I-95 and I-476, turning toward PHL, which will be served by a stop on the new alignment. Keystone Service trains operating blended service will join the high-speed alignment at Philadelphia Airport using the SEPTA Airport Line ROW. The tracks will then head north in a tunnel, serving Market East Station in Center City Philadelphia before surfacing and continuing to a high-speed rail station in Trenton. The route will continue through New Jersey, with planned stops at EWR and Newark-Penn Station before descending into a new pair of

In most of New Jersey, the two new tracks will be installed directly adjacent to the four existing tracks.i

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the gateway project NJ Transit developed the Access to the Region’s Core (ARC) project to address the advanced age and decay of the existing trans-Hudson tunnels on which their service depends. ARC was designed to provide NJ Transit with two new, modern tunnels, which would have taken the strain off of the centuryold North River Tunnels. In its original form, ARC would have given Amtrak and NJ Transit the flexibility to rehabilitate or close the North River Tunnels. Assuming ARC’s construction, the 2010 Amtrak Northeast Corridor Master Plan included long-term plans for a third pair of trans-Hudson tunnels.8 These deep bore tunnels would serve Amtrak highspeed traffic in a new, deep tunnel station accessible through Moynihan Station. Along with the replacement of the Portal Bridge over the Hackensack River, the Gateway Project would provide extra capacity and a dedicated path for Amtrak high-speed services. In September 2010, citing cost overruns, New Jersey Governor Chris Christie suspended construction on ARC.9 In April 2011, the State of New Jersey officially backed out of ARC, returning some federal project grants while keeping others. Amtrak is now in the process of revising its Gateway Project in light of the ARC decision. Because of the decaying state of the North River Tunnels, Amtrak must build a new rail link to serve the existing Penn Station complex before it moves on to a deep bore project. The new Gateway Project, as proposed, will deviate from the existing Corridor past Newark-Penn Station, cross over a new Portal Bridge complex, serve an annex to Secaucus Junction Station, tunnel under Hoboken and the Hudson River just south of the North River Tunnels, interface with the existing tracks west of Penn Station, and serve a new NJ Transit terminal just south of the existing Penn Station (Block 780).10 Since these new tracks will be stub-ended at Block 780, and because Sunnyside Yard in Queens is already at capacity, a new NJ Transit yard must be built in the New Jersey Meadowlands. As NJ Transit will be the primary beneficiary of this investment, which will increase capacity at Penn Station by 24 trains per hour, it should still be responsible for most of its costs, whether through capital funding or trackage fees paid to Amtrak after the project’s completion. Because of the Gateway Project’s new functions, it cannot be dedicated to high-speed service. Until the fifth and sixth trans-Hudson tunnels can be built to the original Gateway specifications, new highspeed trains will need to serve the existing Penn Station platforms. Though the Moynihan Station will provide passengers with a high-quality head house, train operations will not change significantly. Because of the high complexity and density of interlockings west of the station, until these new tunnels are built, all high-speed trains continuing past New York should be given highest priority on center tracks 11 and 12. This will allow for relatively unimpeded service between the Hudson and East River tunnels. Future phases of Penn Station remodeling may include the closure of some existing tracks to allow for a standard-width platform, although the Madison Square Garden pillars will continue to cause ADA issues.

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The proposed track layout of New Yorkâ&#x20AC;&#x2122;s Penn Station after the completion of the Gateway Project. rail tunnels under the Hudson River and ending at the newly constructed Moynihan Station in Manhattan.

When the high-speed service comes into operation, the existing four-track network will be available for more intercity regional trains, more frequent and reliable commuter rail service, and possibly a commuter express service between Philadelphia and New York, using higher-speed trainsets to provide improved connections between major cities and the commuter stations that will not have stops on the high-speed alignment.

Capacity expansion at BostonSouth Station.ii

Strategic Improvements

Phase 1 of this project is not limited to the Philadelphia to New York segment of the Corridor. An addition $10 billion will be used to improve operational efficiency and expand capacity on the remainder of the line. While the Boston-New York and Philadelphia-Washington, DC segments will not be getting a true high-speed rail experience initially, the improvements enabled by these investments will ensure that the trains using these segments will also be able to take advantage of the new dedicated tracks to the fullest extent possible. The projects most likely to enhance service include: New Stations

Terminals at Boston South Station and Washington Union Station are reaching capacity, even without the addition of

The Connecticut River Bridge is one of those slated for replacement.iii

Penndesign 2012 studio report high-speed service. Both are in need of additional tracks and platforms as well as increased passenger circulation space. These enhancements will also benefit commuter rail passengers. New Bridges

The NEC contains many movable bridges that present an impediment to reliable passenger operations, especially along the Connecticut shoreline. By maritime law, many of these bridges must remain in the up position for most of the day. Replacing these obsolete structures with new high spans that leave the service uninterrupted by the demands of boat traffic will improve reliability for both commuter and intercity passengers and enable more intercity trains to be able to run on the Corridor north of New York.

The Zoo Interlocking near 30th Street Station is one of the few grade separated junctions on the current NEC.

Grade Separation

Because of the potential for train conflicts, level interlockings between tracks slow down operations considerably. Trains will be able to realize increased efficiency by using overpasses in select problematic locations to help keep services running smoothly. Existing (blue) and new (red) track configurations in Bridgeport, CT. This project will create a new station with access points on both sides of the river.

Penndesign 2012 studio report Curve Straightening The trackage of the NEC is filled with many sharp turns and curves. These elements impede trains from operating at their highest speeds. Providing bypasses for these curves at places like Wilmington, Delaware and Bridgeport, Connecticut will enable high speed trains to operate faster.

Results: Preparing for the Next Century Capacity

Phase 1 will improve the Northeast Corridor’s capacity in several key ways: Stations

Today, most of the major stations along the NEC operate at or near capacity. Strategic upgrades to these stations will add significant capacity, allowing them to handle the increased passenger load provided by the new mainline tracks. In addition to the necessary upgrades at New York-Moynihan Station provided by the Gateway Project, capacity increases at Boston South Station and Washington Union Station will provide more slots for trains to board and alight passengers, no longer choking capacity along the NEC. Gateway Project

The two trans-Hudson tunnels that provide passage from New Jersey into New York City date from 1910 and today are the most serious choke points on the NEC. During rush hour, the tunnels operate at 100% capacity, with up to four trains in the tunnels at any one time. Following the cancellation of the Access to the Region’s Core (ARC) tunnels, Amtrak’s Gateway Project has become the most vital rail capacity and reliability improvement project in the United States. Originally envisioned as a cornerstone of the Amtrak high-speed rail program, these tunnels must now serve the existing Penn Station complex and the new high-speed service until the fifth and sixth trans-Hudson tunnels can be built. With today’s signaling technology, these two tunnels will open up 24 new slots per hour into and out of New York City. With advanced signaling, Gateway may provide up to 30 slots per hour. Dedicated High-Speed Tracks

Early Action HSR -- two dedicated high-speed tracks from Philadelphia International Airport to New York City -- will add substantial line capacity. Today, Amtrak establishes its service schedule according to its service requirements, and then allows local transit agencies to run service in the gaps between Amtrak trains. Because of the variety of speeds and stopping

Penndesign 2012 studio report characteristics of Amtrak, NJ Transit, and SEPTA equipment, Amtrak must restrict the time slots available to local transit. With the high-speed intercity trains on their own tracks, local transit agencies will have greater flexibility in their service scheduling. Additional HSR Commuter Service

By moving the fastest service to dedicated tracks, Amtrak will be able to add additional time slots for local transit. Local transit can then run its service at the most optimal times, run more trains, and can use express/local stopping patterns to create higher-speed commuter services on the conventional four-track railroad. NJ Transit will be able to run three additional trains per hour in its existing tunnels, resulting in the ability to move 4,320 additional people per day. When the eventual fifth and sixth trans-Hudson tunnels are built, NJ Transit will be able to use up to 24 new hourly slots in the Gateway Tunnels. With two new high-speed tracks, Amtrak can run more intercity trains per hour. Once the dedicated tracks are constructed, Amtrak will be able to run up to four high-speed trains, two regional trains, and two through-routed Keystone trains per hour along the highest-demand segment of the Corridor. On the northern segment, Amtrak will be able to run two high-speed trains per hour and two regional trains per hour between New York and Boston. In comparison, Amtrak today can operate only one Acela, one regional, and one Keystone train per hour along the central NEC and only one hourly Acela and regional between New York and Boston. Airport Connection

The new high-speed tracks will bring PHL within 52 minutes of midtown Manhattan, in effect making PHL the â&#x20AC;&#x153;fourth NY airport.â&#x20AC;? To put this time in perspective, it takes 38 minutes from Herald Square to EWR, 41 minutes to John F. Kennedy International Airport, and 51 minutes to LaGuardia Airport by public transportation. These three extremely busy and congested airports in New York City serve over 103 million passengers annually.11 Together, these airports average 20 minutes of delay per flight and have little to no room for outward expansion.12 Increasing access to PHL will provide those who work and live in New York City to access to a cheaper, underutilized, high capacity airport.

Two dedicated high-speed tracks will substantially increase capacity along the Northeast Corridor.

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Philadelphia International Airport will be within 52 minutes of downtown Manhattan with high-speed rail.

Reliability Today, the hundred-year old pieces of the NEC cause cascading delays along the line, and the amount of time to repair and ensure safety on these pieces of infrastructure is increasing. Phase 1 will improve reliability throughout the corridor in two ways. First, by replacing the Corridor’s decaying infrastructure, trains will be able to run without the hazard of today’s equipment failures, which can include fallen catenary, power substation failure, movable bridge failure, and rolling stock fatigue. These upgrades will allow both Amtrak and local transit trains to operate reliably on a railroad in a state of good repair for the first time in half a century. Further, expanded capacity will allow operations to run more reliably. Once a railroad reaches 75% of its design capacity, minor operational problems on a single train begin to affect the performance of the entire line. Today, most of the NEC between Philadelphia and New York operates between 75% and 100% of capacity. This means that any operational problem, be it a mild delay on the SEPTA Trenton Line, a switching problem on one of the tracks, or any of the myriad problems that can arise in a highly coordinated transit system, causes a cascade of delays lasting for hours. Automobile drivers often experience this same phenomenon as a “phantom traffic jam,” where traffic grinds to a halt for no appreciable reason. Increasing the capacity of the central NEC from four to six tracks and separating out the fastest and slowest traffic will allow every service to run more efficiently and reliably.

Penndesign 2012 studio report High-speed rail service will bring the cities of the Northeast closer to each other. Shown below, the time-space compression for New York City. Current Travel Times

Phase 1 Travel Times

With the construction of Phase 1, the trip from New York to Philadelphia will take 37 minutes.

Full Build Travel Times

Penndesign 2012 studio report Time Savings Early Action HSR will provide significant time savings throughout the southern end of the NEC. While this early phaseâ&#x20AC;&#x2122;s dedicated high-speed tracks extend only from New York City to Philadelphia, all high-speed trains traveling through this segment will be able to use the new tracks and travel at high speeds. Currently, trains traveling from Washington, DC to New York City make the journey in 2 hours and 50 minutes. After the new tracks are constructed, the journey will only take 2 hours and 18 minutes. The trip from New York City to Philadelphia is currently 1 hour and 5 minutes. After Phase 1 is built, the trip will only be 37 minutes long. As can be seen at left, this 32-minute decrease in travel time will save time along the entire southern end of the NEC, bringing more people, businesses, and cultural attractions within a shorter amount of time of each other.

The Philadelphia Perspective

Philadelphia is poised to realize great improvements in connectivity via the Early Action HSR project, which the city can capitalize upon through additional infrastructure investments. The new alignment is designed to stop at PHL and Market East stations. This does not mean, however, that the existing stations in the city will see reduced service. While Market East will be the station stop for high-speed express trains, 30th Street Station will see its intercity traffic remain the same, if not grow. Keystone and Regional trains will continue to stop at 30th Street. The additional capacity available on the existing main line between Philadelphia and New York will be able to accommodate new regional commuter trains to New York, an intermediate service priced and operated at speeds between commuter rail and high-speed rail. Pennsylvanians outside of Philadelphia will also see their quality of rail service improve. Keystone trains using high-speed rolling stock will be able to access the HSR alignment to New York via the SEPTA Airport Line tracks and a new wye connection near PHL. This will reduce the Harrisburg-to-New York travel time from 2 hours, 50 minutes to 2 hours, 22 minutes. Harrisburg, Lancaster, and Chester County will also gain a one seat-ride to PHL. In addition to greatly improving airport access for hundreds of thousands in southeast Pennsylvania, these connections could also replace existing short-haul flights from Harrisburg to Philadelphia and New York, saving airlines money and creating additional capacity for larger jets, especially at New Yorkâ&#x20AC;&#x2122;s severely congested airports.

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The new track layout in Philadelphia will include the existing NEC (blue), the new high-speed alignment (red), and a connector from the regional Keystone service (yellow) to the high-speed alignment.

Bringing PHL within an hour of over 8 million New Yorkers has the potential to transform the airportâ&#x20AC;&#x2122;s role in the country. PHL is both a hub city and primary international gateway for US Airways and a shipping hub for UPS.13 In 2009, PHL was the ninth-busiest airport in the country by movements, moving 472,688 aircraft and 30.6 million passengers.14 It is in the late stages of planning a Capacity Enhancement Program (CEP) that will add one runway, extend two others, and enlarge the terminal complex by 25%.

US Airways will swap gates with Delta Air Lines in mid-2012, giving the airline a stronger presence in the Washington, DC market but weakening it in New York City.15 Even if it acquired American Airlines, the combined company would offer no more than 22% of the available seat-miles of any New York airport and no international operations. At PHL, however, US Airways controls over 60% of the market.16 When the HSR system goes online and PHL becomes more accessible from midtown Manhattan than JFK, US Airways will regain access to the New York market that it has essentially forsaken.

Along with capacity improvements from the CEP and Federal Aviation Administration NextGen air traffic control, PHL and US

Penndesign 2012 studio report Airways can take advantage of HSR access. US Airways, in turn, can support HSR in several ways. It can help design and finance the PHL high-speed rail station, just as the Canary Wharf Group is designing and building its own Crossrail station in London (see the Economic Imperative section for more information). It can also enter into a codeshare agreement with Amtrak, as Continental (now United) Airlines has done for years. This allows passengers to book a single ticket for an air/rail journey, making the intermodal option more seamless and attractive. Finally, for the most seamless connections, US Airways can contract with Amtrak to operate its own direct high-speed service that would stop only at New York-Moynihan Station and PHL.

The high-speed alignment may also accelerate the development of former industrial lands in south and southwest Philadelphia. Currently, there is a great deal of underutilized industrial land in these areas of the city, with much more scheduled to be available due to the closing of the massive Sunoco refinery on the lower Schuylkill Riverfront. With the addition of the Philadelphia International Airport Station, this land would become more valuable, one of the largest parcels of contiguous land available in a major urban center in the Northeast. Even if the site’s environmental condition prevents it from becoming residential or office space, the site could provide enough contiguous land to accommodate a number of warehousing and logistics facilities, supporting a budding aerotropolis around PHL. Locations in southwest Philadelphia like the Sunoco site, the Navy Yard, and the Stadium Complex could be connected to the HSR station at PHL, as well as the airport itself, via an automated transport system that would be of relatively low cost to build and operate. What is currently a symbol of the city’s faded industrial past could become a symbol of its future as a key element of one of the world’s great megaregions. All that is needed is the intelligent investment in infrastructure beyond HSR to take advantage of it.

United Airlines check-in counter at New York-Penn Station.

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Supporting Infrastructure Investments for Londonâ&#x20AC;&#x2122;s 2012 Olympicsxxi

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ECONOMIC IMPERATIVE Current Economic Geography The Northeast Megaregion is home to more than 50 million people. They contribute to a $2.6 trillion dollar economy, or a full 20% of U.S. GDP. Population projections estimate that, by 2050, the Northeast will host 70 million people. In an increasingly globalized society, the region must determine how to capitalize on its density to grow a resilient economy and remain keenly competitive.1

Historically, the answer has relied heavily on transportation investments, which fundamentally guided the course of U.S. history. In the mid-19th century, the U.S. East Coast was rapidly densifying while the country’s western territories were expanding widely. To keep the Union together, the young nation built the Transcontinental Railroad, which allowed enterprising homesteaders to develop the West, travelers to make the trip between New York and San Francisco in a week, and entrepreneurs to better access Asian markets. A growing western population demanded products from eastern industries, and within ten years of completion, the railroad was shipping $50 million annually in goods between the U.S. coasts. The railroad also caused a spike in production, as industries were able to mine the resources of middle America for use in manufacturing. The railroad has been dubbed “America’s first technology corridor.”2 By the mid-20th century, the U.S. was once again expanding its transportation networks by building the Interstate Highway System. Comparing his arduous 62-day Army convoy from Washington, DC to California in 1919 to his experience on the Autobahn in wartime Germany, President Dwight Eisenhower deemed America’s poor roads a hindrance to mobility and a threat to national security. In 1956, he persuaded Congress to pass the Federal-Aid Highway Act, eventually creating 46,730 miles of interstate highways that have forever altered economic activity in the U.S.3

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“We were not sure it could be accomplished...Nothing of the sort had ever been attempted.” – Eisenhower on the Interstate Highway System

In order to continue the growth and competitiveness of its economy, the U.S. needs to continue to make transportation investments similar to those of the Transcontinental Railroad and the Interstate System. Just as the northeastern railroad network predated the national railroad, and Robert Moses’ New York State Parkways predated the Interstate, this next leap must begin regionally.4

The Economist Intelligence Unit’s 2011 ranking of the world’s 10 most competitive cities places New York City at the top of the list; Washington, DC and Boston are ranked eighth and tenth, respectively. The analysis defines competitiveness as “the demonstrated ability to attract capital, business, talent, and visitors.”5 New York ranks highest for reasons beyond serving as a financial services hub; the report attributes the city’s competitiveness to its appeal to a variety of businesses. Factors which attract businesses, in addition to a city’s economic size and growth potential, include the regulatory environment, the quality of human capital, and the quality of life.

Besides New York, Washington, DC, and Boston, the other cities along the Northeast Corridor have a latent competitive potential. Cities such as Philadelphia and Baltimore boast talent pools comprised of researchers at top universities, key business sectors, and physical and cultural amenities. To become more competitive in an increasingly global society, however, these cities need to strengthen their edge.

The United States has a robust history of major infrastructure investments that enabled geographic and economic growth.

“Cities of all sizes can be competitive,” the report notes, “but density is a factor in the competitiveness of larger cities.”6 While there appears to be little correlation between size and competitiveness, urban density is clearly linked to productivity. However, attracting density is only one part of the solution. A dense environment requires corresponding transportation services to facilitate the movement of goods and services.

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New York, Washington, DC, and Boston rank among the world’s most competitive cities, according to an analysis by The Economist Intelligence Unit. Factors contributing to urban competitiveness include economic strength, physical capital, social and cultural character, and the environment. i At present, the Northeast lacks capacity across airspace, highways, and rail services. Such congestion is decreasing productivity and quality of life by constraining and slowing the movement of people and goods. In 2007, the cost of flight delays at airports along the NEC was $2.45 billion annually. Unless the region invests in transportation, this figure will grow to $7.12 billion by 2025. 7 By 2030, the New York region alone will forfeit $6 billion annually in wages, $16 million in sales, and 125,000 jobs because of limited air capacity. The region’s highways fare no better, as the Northeast features four of the 10 most congested metropolitan roadways in the nation. 8 Rail service, at current levels of investment, is also capacity-constrained. The system is taxed beyond its design, to the point where only 75-80% of trains on Amtrak’s Northeast Regional Service reach their destination on time.9 International research suggests that HSR is the most efficient way to increase mobility, particularly along corridors extending 100 to 600 miles. HSR can carry the same number of people in the same direction as a three-lane highway using a fraction of the land. A study by the University of Illinois-Chicago found that HSR typically captures 80% of air or rail trips if the travel time by HSR is less than two and a half hours. A report by the Lincoln Institute for Land Policy notes, “mode shift to rail provides the greatest benefit in regions where road and air capacity is constrained.”10 HSR not only relieves congestion; it opens up new economic opportunities by facilitating agglomeration and urbanization, changing cities’ industry mix, connecting academic and research institutions, increasing tourism, and providing short and longterm jobs.

Economic Effects

In an analysis of the potential effects of HSR on the economy of the United Kingdom, KPMG found that investments in the service

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The Northeast features four of the ten most congested metropolitan roadways in the nation.ii

affect productivity in three ways.11 HSR fuels urbanization by driving businesses and jobs into closer proximity. Consequently, HSR supports growing agglomeration economies, uniting businesses with labor, inputs, and technological advances. In addition, HSR can accelerate citiesâ&#x20AC;&#x2122; mix of industries towards those with greater productivity.

Efficiencies of Urbanization

HSR can make cities more attractive for business and jobs by simulating the effects of density and putting a larger workforce within closer proximity to work locations. Traditionally, urbanization has allowed for economies of scale wherecities with large populations are able to provide more and better amenities than smaller cities. Urban dwellers benefit not only from cultural assets as museums, sports arenas, and parks, but also from mass transit that allows them to commute to a greater variety of jobs more efficiently and less expensively. Employeesâ&#x20AC;&#x2122; ability to access mass transit, in turn, benefits employers by increasing the potential labor pool for any given position.

In either highly congested areas or areas without strong transportation connectivity, employers must pay a wage

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CANARY WHARF Canary Wharf’s successful redevelopment project in the Dockland area transformed the formerly economically depressed district into London’s new financial center. The area is characterized by a 7.9 million-square-foot office space and retail development, owned and managed by the Canary Wharf Group.12 Connectivity to the rest of London is critical to the success of the development, as accessibility determines whether or not tenants can attract the necessary high-skilled workforce and shoppers. The decision to invest in the station was based on the success of the nearby Jubilee Line, which allowed Canary Whaft’s workforce within one hour of the site to increase from 800,000 to 3.2 million people. To ensure accessibility, the Canary Wharf Group partnered with London’s Transit Authority to invest £500 million in the Isle of Dogs Crossrail station. Currently under construction, the station will connect Canary Wharf to Central London and Heathrow Airport.13

Canary Wharf Station, London.iii

Penndesign 2012 studio report premium. Employers in these areas are forced to cast a wider net to attract and maintain an appropriately skilled labor force. Potential employees may not live in the immediate vicinity, thereby requiring employers to offer additional incentives in the form of higher wages to adjust for the distance tradeoff.

Commuting Density Increase: The major cities along the Northeast Corridor already experience an effective density increase during the day due to commuting. This chart omits the significant outlier of New York City.

Urban and inter-urban transportation investments increase the size of the potential labor pool by simulating closer physical proximity. While physical density measures the number of residential units, offices, and people within a given area, it does not account for accessibility and mobility. High capacity transportation systems enable urbanization effects over greater distances, allowing a city’s daytime population to increase significantly as a result of commuting. For example, the population of Boston increases by 41% during the day; Washington, DC by 72%.14

HSR would further increase each city’s commuter shed and attract more workers to the Northeast’s cities by reducing the time necessary to commute. Businesses, particularly those seeking a specialized labor pool, would be attracted to these areas by the potential to access a wider labor pool without having to pay a premium. The reduction in businesses’ labor cost represents an increase in productivity and adds more value to the economy.

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Agglomeration As the densest megaregion in the United States, the Northeast has a unique capacity for efficiency and innovation. Population density provides firms with access to highly-skilled employees, allows firms to share resources, and leads to more innovation from the exchange of information. The combination of these effects is known as agglomeration, or the benefits that firms obtain by locating near each other. Workers gather where they will have the most opportunity to sell their labor, and suppliers where they can sell their inputs to the most firms. Firms therefore have a greater selection of labor and supplies. Businesses also benefit from knowledge spillover, benefitting quickly from other firmsâ&#x20AC;&#x2122; new processes or innovations. Agglomeration causes firms to be more productive by lowering costs while producing more innovative products.

Agglomeration and Industry Mix

Transportation investments that encourage density such as HSR typically benefit certain industry sectors over others. One measure for how industries respond to changes in density is agglomeration elasticity. Agglomeration elasticity is a measure of the sensitivity between the change in productivity and the change in density. Researcher Daniel Graham calculated the agglomeration elasticity for several industries in the UK, noting the change in productivity associated with a doubling of employment density. Graham found considerable variance across the 28 different industry groups he studied, with some industries reflecting insensitivity to increased employment density while others were highly elastic. For instance, a doubling of workforce density in the banking, finance and insurance industry is associated with a 24% increase in productivity, while the same density increase in the construction industry is associated with an 8% productivity increase.15 This report applies Grahamâ&#x20AC;&#x2122;s agglomeration elasticities to the Northeast, ranking 11 industries converted from the 2007 UK Standard Industrial Classification (SIC) into the 2009 North American Industry Classification System (NAICS). Using MSA Business Patterns, the top six NAICS industry codes with the highest employment for every city along the proposed HSR route are categorized by level of elasticity. This research reveals that cities in the Northeast possess elastic industries which would respond favorably to changes in population density. Northeast citiesâ&#x20AC;&#x2122; industries include finance and insurance, health care, accommodation and food services, education, manufacturing, and retail trade. More than half of the

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Industry Elasticities: Graham’s research ranked industries by their agglomeration elasticities, or a measure of how likely they are to see an increase in productivity as a result of an increase in density.

4.3 million workers in New York’s largest sectors are employed in these highly elastic industries; in Philadelphia, nearly threequarters of the 1.5 million employees in the city’s largest sectors work in highly elastic industries.16

HSR will facilitate the change in density which will reverberate in highly elastic industries. Because these highly elastic industries already reflect the Northeast cities’ largest and most significant employment sectors, each city will be able deepen their comparative advantage with the added density brought about by HSR. Given lower costs associated with the accumulation of highly skilled labor and inputs, comparative advantages allow for creater efficiency in production.

Innovation

One of the greatest assets of the Northeast megaregion is its strong network of top-tier research universities. According to the London Times Higher Education Magazine, 10 of the top 50 research universities in the world are located in the Northeast. These schools educate 175,000 students a year, employ 182,000 people and in 2009 brought in $6.4 billion dollars in annual

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research funding.In comparison, California institutions brought in $4.4 billion in research funding in the same year.17 These universities drive innovation through research and the evolution of start-up companies and new manufacturing processes.

HSR can facilitate increased collaboration between these institutions. Increasingly, researchers are forming partnerships across multiple universities to create collaborative and interdisciplinary research teams. According to a study in the journal Science, the share of papers published in science fields and engineering between researchers at different universities rose from 10 percent to 30 percent between 1975 and 2005. In addition, papers written by individuals across multiple institutions are more likely to be cited in future research, particularly if the partnership is between top-tier schools.18

Research institutions also are increasingly engaged in partnering with industry. The Greater Philadelphia Innovation Cluster (GPIC) for Energy-Efficient Buildings Consortium consists of over 10 universities, including Pennsylvania State University as hub lead, and several major corporations who are charged with developing new ways to improve the energy efficiency of existing buildings. Recently, five agencies in the consortium were jointly awarded more than $129 million in funding from the U.S. Department of Energy to pursue this work: Pennsylvania State University, Philadelphia Industrial Development Corporation, Ben Franklin Technology Partners of Southeastern PA, Delaware Valley Industrial Resource Center, and the Wharton Small Business Development Center.

Based on Grahamâ&#x20AC;&#x2122;s research, the studio categoried the largest industries of cities in the Northeast by agglomeration elasticity.

Penndesign 2012 studio report The success of consortiums like GPIC depends on interfacing in person. While improved communication technologies like the Internet have allowed research partnerships to cover greater distances, the average distance between researchers has not changed significantly, rising only 50 miles in 30 years.19 This demonstrates that face-to-face communication to establish the type of relationships necessary for long-term research partnerships. If this continues to hold true, HSR could play a major role in connecting researchers and boosting the innovation that drives economic and cultural growth.

Economic Impacts

Previous Studio Findings

Northeast Universities: Ten of the top 50 worldwide universities are located in the Northeast.

The 2010 and 2011 Penn Northeast HSR studio reports calculated many of the specific economic benefits of HSR. The 2010 studio found that HSR would realize benefits such as: $58 billion in usersâ&#x20AC;&#x2122; travel time saving and foregone traffic incidents, $1.5 billion in improved capacity, $5.9 billion in congestion mitigation, $4.2 billion in carbon emissions reductions, $41 billion in wider economic benefits, and $55.6 billion in direct revenue from the lineâ&#x20AC;&#x2122;s operation. These benefits exceed the capital, operating, and maintenance costs of the project by a ratio of 1.7 to 1.0.20

Penndesign 2012 studio report Building on this analysis, the 2011 studio excluded HSR revenue and used a discount rate of 7% over a 40-year period. The studio calculated $71.8 billion in benefits and exceeded costs at a ratio of 1.4 to 1.0. As opposed to the 2010 study, which compared an investment in HSR in contrast to other modes of travel, the 2011 study did not define HSR as an alternative but as the “missing link” in Northeast Corridor mobility.21

Though the U.S. economy continues to rebound from the 2008 global financial collapse, macroeconomic recovery has not led to significantly increased employment or federal tax revenues. As a result, this studio has explored the need to translate the benefits of HSR into employment, local capital infusion, and tax revenue.

Permanent Jobs

Other studies of the potential of U.S. high-speed rail predict major economic benefits. In a 2010 report, the U.S. Conference of Mayors estimated that Los Angeles would see an influx of $7.6 billion in new business sales, and create 55,000 jobs, by strengthening access to the downtown area via HSR. Chicago would see $6.1 billion per year and 42,000 jobs added to the economy, as HSR would expand labor markets and connectivity across the Midwest. Orlando would realize $2.9 billion and 27,500 jobs by helping workers access the city’s technology and medical centers, while Albany would see $2.5 billion annually and 21,000 jobs as a result of HSR strengthening its position as an emerging location for conventions.22

This projection is supported by the documented experiences of cities that have been served by high-speed rail in locations around the world, including Germany, the United Kingdom, and France, as described later in this section of the report. The four cities were chosen by the Economic Development Research Group in preparing the report to represent different-sized cities in different parts of the U.S. with the potential to benefit from highspeed rail.

Construction Jobs

The construction of HSR would itself bolster the economy by adding significant employment. According to the American Public Transportation Association (APTA), public infrastructure creates 17,450 direct jobs, 4,367 indirect jobs, and 14,291 induced jobs per billion dollars of spending.23 Direct jobs include the manufacturing of vehicles and control equipment, the construction of station facilities, legal and accounting services associated with construction, and operation. Indirect jobs are those which produce construction materials such as steel,

Penndesign 2012 studio report concrete, wood and plastic, supply parts and equipment, and support production with business services. Induced jobs are those created as a result of workers directly or indirectly involved in the project spending earned income on goods and services.24

APTA’s job generation estimate, applied to the $100 billion HSR project and spread over 25 years, translates into approximately 69,800 direct jobs, 17,500 indirect jobs and 57,200 induced jobs.

Local Revenue

APTA estimates the economic impact of every billion dollars spent on public transportation investments to be $3.6 billion in new business sales, $1.8 billion in additional GDP, and $488 million in tax receipts to federal, state and local government. Applied to HSR in the Northeast, this amounts to $360 billion in new business sales and $180 billion in additional GDP. Tax receipts for the federal government would total $32.9 billion, while state and local governments would receive $15.9 billion.25

Tourism Revenue

HSR has the potential to increase tourism-related spending. The U.S. Conference of Mayors found that HSR would increase cities’ annual visitors and add spending to their economies. The Mayors’ report estimated HSR would add $225 million to Orlando’s economy, $360 million to Los Angeles, $50 million to Chicago, and $100 million across greater Albany.26 The Northeast Corridor features several cities with robust tourism industries. In 2011, an estimated 50 million people visited New York City’s shops, theaters and landmarks another 33 million traveled to Philadelphia and 16 million visited Washington, DC. 27 HSR gives cities the power to attract even more tourists and business travelers. With HSR, visitors arrive in the heart of a city’s downtown and attractions; further, grand stations like Union Station in Washington, DC, are themselves visitor destinations.

Visitors can also be encouraged to use HSR to extend their stay in the Northeast, traveling between multiple cities. Finally, an ever-growing share of European and Asian visitors to the U.S. will have had experience using HSR services at home and will be looking to utilize similar trains when on business and leisure trips. Provision of world-class HSR service in the Northeast will provide the megaregion with an added advantage in attracting these visitors.

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Union Station is one of Washington, DCâ&#x20AC;&#x2122;s most popular visitor destinations.iv

Examples of HSR and Economic Growth Germany Over 15 years Germany has demonstrated the economic benefits of HSR. In 1995 the country began construction on a new HSR line between Cologne and Frankfurt.29 Initially, the plans for the rail line did not include intermediate stops; however, political pressure from nearby towns between these major destinations led to the addition of three stops.30 Researchers from the London School of Economics examined two of these intermediate destinations, Montabaur and Limburg, for economic growth after the completion of the rail line in 2001. The counties containing Limburg and Montabaur experienced a 2.7% growth in GDP relative to similar areas without a rail station, which can be attributed exclusively to increased market access.31 Each city prepared an aggressive plan for taking advantage of the arrival of HSR trains. In addition, the growth effects of the high-speed rail line persisted beyond the initial economic developments around the new stations.

United Kingdom

Similar economic benefits have been documented in the United Kingdom as a result of the InterCity 125 high-speed train (HST) service, a mid-1970s speed and service frequency improvement designed to connect major cities to London.32 A 2011 study

The U.S. Conference of Mayors estimated that Los Angeles would see an influx of $7.6 billion in new business sales and create 55,000 jobs through HSR investments.v

Penndesign 2012 studio report compared the economic performance of cities before and after HST access and revealed a significant improvement in several economic indicators. Improvements were strongest for cities within one hour of London, although cities within two hours of London also experienced positive effects.33

Towns within one hour of London saw an increase in their economic strength, as defined by high gross value added (GVA), gross disposable household income (GDHI), office rental values, employment in knowledge-intensive industries, and low unemployment. For example, Reading, Swindon, and Peterborough saw improvements across these measures. Towns within two hours of London managed reversed years of decline and saw an increase in GVA, including Bristol, Leeds, and York. In contrast, towns within one hour of London on traditional rail services showed population increase, high income and rental values, but lower GVA than the national average. This suggests that HST access enabled more consistent economic growth and greater GVA.34 The chart of percent change in GVA included here shows the average percent change in GVA over a nine-year period in towns that are one and two hours from London, both with high-speed train access and without.

Necessary but not sufficient: Newport and Doncaster

Two cities along the HST line did not experience the otherwise broadly-spread economic gains. Newport and Doncaster, both within two hours of London and connected to HST service, showed higher than expected unemployment35 and lower than expected GVA36 and office rental values.37 These examples suggest

German counties experienced a 2.7% growth in GDP after the addition of high-speed rail.vi

Penndesign 2012 studio report that while transportation investments enable economic growth and wider economic benefits, they do not guarantee higher economic performance.

Newport and Doncaster each had characteristics that made highspeed train-related economic growth more difficult. Newport, a town of 120,000 people38 located in South Wales, approximately 140 miles west of London, was a major coal and iron supplier during the Industrial Revolution.39 Doncaster, located in South Yorkshire, about 170 miles north of London and home to a population of less than 70,000, 40 is also a city with a strong industrial history.41 Significantly, these industrial-minded cities did not envision the introduction of HST service to London as an opportunity for economic growth, and neither city took action to prepare for or encourage this growth.42

Each city is a small satellite to larger, more dominant economic engines. The failure to maneuver themselves into a position to capitalize on the HST improvement resulted in missed economic opportunities. Newport lost much of its growth potential to Cardiff.43 Similarly, Doncaster floundered while both nearby Leeds and Sheffield flourished.44 However, despite these examples, it is possible for smaller cities with an industrial history to capitalize on intercity transit investments. The most striking example of this is Lille, France.

Seizing the HSR opportunity: Lille History

Lille, located in northern France, is a formerly industrial city about 140 miles from Paris. From 1850 until 1900, the region had the second largest textile industry in the world.45 Although Lille

Bottom Left: UK GVA: Percent Change in GVA from 1996 to 2005.vii Bottom Right: GVA by City: Except for Newport and Doncaster, all other towns between one and two hours from London on HST service had a GVA above the national average by 2006.viii

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HST lines: Chen and Hall studied the economic effects of the implementation of the InterCity 125 high-speed train lines, shown here as A and B.ix

began to deindustrialize in the 1950s,47 it was still an industrial city in the heart of an industrial region in the 1970s.48

During the planning of the HST service between London and Paris, the Mayor of Lille and former Prime Minister of France Pierre Mauroy diverted the line through Lilleâ&#x20AC;&#x2122;s city center, enabling it to integrate the new service with local public transit. Once the route was secured, the city designed a large, multimodal transport complex around the new station. The site became a major commercial center, with offices, hotels, and a large retail center. Another portion of the site was reserved for a public park. To supplement its new transit center, Lille also developed a comprehensive regeneration strategy including new offices, public housing, and a large conference center.49 By 1994, both the domestic and international HSR services had shortened the Paristo-Lille travel time from two hours to one.50 This new service dramatically increased service frequency between Paris and Lille, now the segment of the line with the highest ridership.51 Outcome

Unlike Newport and Doncaster, Lille managed to overcome its industrial history and capture the potential HSR benefits. From

Penndesign 2012 studio report 1990 to 2006, Lille was one of only three cities in France with continuously above-average employment gains.52 While the region’s GVA still lags behind that of the Paris region, the Lille region showed progress since the introduction of HSR service.53 In the process, Lille restructured its economy, shifting away from the historically dominant but declining manufacturing industries towards the growing “knowledge economy” . While much of the country underwent a similar shift, Lille saw a faster than average decrease in manufacturing activity. At the same time, its knowledge sector grew at a rate of 4.3%, compared to the national average of 2.4%.54 While Lille provides a crucial rail interchange between the United Kingdom, Belgium, Switzerland, and the rest of France, it also used the HSR service to leverage itself into a strong economic hub.

Lille: Striking iconic architecture helped the station-area development project draw publicity.x

Lessons Learned

Much of Lille’s success resulted from the city’s vision and preparedness for the train service. By shaping an urban regeneration strategy around the new station, Lille was positioned to maximize the benefits that the train offered Part of this strategy involved bolstering the growing service sector. Specifically, local authorities decided to “change the character of the conurbation, with major growth in the service sectors” driven by HSR.55 More fundamentally, the plan started by siting the train station in the center of the city, which is well-connected to the existing transit network. Given the complexity and scope of planning for HSR, Lille benefitted immensely from strong political leadership that championed the project and carried it through to completion.56

Capitalizing on HSR investments: Benchmarks for success

The economic improvements resulting from improved rail access in Germany and the UK demonstrate the growth potential of intercity rail investments. However, the cases of Newport and Doncaster in Great Britain reveal that these investments are necessary, but not sufficient, for economic growth in a fully urbanized area. These examples suggest that an industrial history and/or a lack of forward planning can limit the benefits that a city realizes as a result of HSR. However, Lille and other European examples demonstrate that cities that embrace postindustrial economic growth strategies realize their potential despite potentially disadvantageous conditions. These examples are relevant for cities in the Northeast Corridor, which because of size, history, or current economic activity, might not be positioned to benefit from HSR. Drawing on these examples, this report identifies six attributes that cities must possess in order to be

Shift in Industry: Lille experienced a restructuring of its economy away from manufacturing and towards knowledgeintensive services.xi

Penndesign 2012 studio report positioned for the economic growth that HSR enables. These factors for success are connectivity, regulatory environment, industry makeup, human capital, quality of life, and leadership.

Six attributes that cities must possess in order to be positioned for the economic growth that HSR enables.

1: Connectivity Various studies and European examples demonstrate that wellconnected stations in city centers offer the greatest potential for HSR-related urban revitalization.57 Much of Lille’s HSR-related economic growth was only possible because of the station’s central location. Not only was the new station area development tied into the existing urban fabric, but also the HSR service connected directly to the city’s existing local transit system.58 A comparison of Lille and Manchester demonstrated that improving the regional transport network is “crucial for spill-over effects from the arrival” of high-speed service.59 France’s investment in regional transit upgrades enabled Lille’s subsequent economic growth, while a bottleneck in the regional network around Manchester contributed to the region’s continued decline overall.60

Penndesign 2012 studio report Similarly, a station in Lleida, in Spainâ&#x20AC;&#x2122;s Catalan region, is located in the heart of the city and connected to a variety of other modes of transportation, including regional rail and buses. Since Lleida has been connected to HSR, tourism has increased by about 15% and the demand for business conventions has increased by about 20% each year.61 In contrast, the lack of regional connectivity was a problem for the station in Avignon, France, which was located at the edge of the city where new development was isolated from both the transit network and the rest of the urban activity.62 Many other examples reinforce findings that successful economic development around stations occurs most readily in the presence of effective regional and local transport. Fortunately, many of the cities along the Northeast Corridor have robust and well-connected local transit systems. To realize HSR-related economic potential, stations should be located in city centers and be well-connected to local public transport. Cities should invest in improving the connections between HSR services and the other transportation modes.

Additional infrastructure investments will be challenging in the current economic and political environment, and the length of time to implement them sometimes becomes an argument used to defer or even prevent the necessary investments. The Los Angeles 30/10 program is an example of how these projects can move forward. The program aims to build 12 key mass transit projects, but it is scheduled to complete the projects in 10 years instead of 30. The 30/10 projects are using revenue from a sales tax increase as collateral for bonds and a federal loan to fund the project.63 President Obama referred to this series of projects, which include airport connections, subway extensions, and light rail projects, as â&#x20AC;&#x153;a template for the nation.â&#x20AC;?64 This project provides an example for other cities that need to extend and upgrade their transit systems before HSR arrives.

2: Regulatory Environment

Urban regeneration efforts led by effective public and private sector champions are essential to capitalize on HSR and realize the economic benefits other cities and station areas are experiencing. For example, Lille located large-scale retail, office, and public housing development near its central train station in anticipation of increased service. The city also reorganized local universities, locating their faculties in former cotton mills to create local employment and businesses.65 Similarly, the station planning in Lleida included a comprehensive plan with 980,000 square feet of commercial, retail, and entertainment

Penndesign 2012 studio report space.66 These auxiliary redevelopment projects would not have been possible if the local land use and zoning regulations did not support this kind of development. Cities hoping to capitalize on HSR and encourage station area development must ensure that zoning codes and long-range land use codes allow and encourage high-density, mixed-use development.

While cities need zoning codes that allow appropriate station area development, they also need a business environment that encourages individual businesses to locate in these new developments. According to the Economist Intelligence Unit, the business and regulatory environment is critical for not only HSR preparedness, but for a cityâ&#x20AC;&#x2122;s overall competitiveness.67 Wipro, an information technology services firm in India, considers the business environment and business conveniences such as hotels in the vetting process for potential investment locations.68 One major component of the business environment is access to HSR. The station developers in Lleida saw the service as crucial to attracting large companies such as Microsoft and Indra Software Labs, a Spanish information technology company.69 To augment this HSR benefit, cities with HSR stations should also improve the business environment by lowering energy costs, incentivizing supporting development such as hotels, and outlining clear, consistent, and predictable tax policies for the long-term future.

Property tax policy can also be used in conjunction with the zoning code to encourage station area development. Property taxes are generally assessed based on the value of the structure built on a piece of property regardless of its location. Under this system, a parking lot located downtown would have the same property tax as it would have in a suburban location. Because a building is a riskier investment than a parking lot and would have a much higher tax value, a landowner has incentive to delay development and keep the property underutilized. In contrast, a land value tax decouples the land and the buildings, and the tax is based on the value of the land itself.70 In this case, the downtown parking lot would have a much higher property tax, incentivizing the owner to sell or develop the property with a more profitable use. As land value is generally assessed through hedonic pricing, proximity to a HSR station will increase the value of the land. Therefore a land value tax insures that the properties in the station area are developed with appropriate uses to maximize the effect of introducing HSR service.

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3: Industry Mix and Diversification While the business environment can attract economic growth, the region’s industrial makeup also affects how a city will capitalize on HSR. Several studies point to the importance of the service economy, which includes education, finance, communications, health-care, utilities, retail, and transportation.71 Lille’s burgeoning service economy and the city’s ability to restructure itself away from manufacturing and towards its growth industry played a key role in attracting new businesses.72

The importance of a strong service sector dovetails with the evidence that different industries are more sensitive to agglomeration effects, or are more likely to become increasingly productive as employment density increases. According to Daniel Graham’s research, many service sector jobs have higher than average agglomeration elasticities. For example, education and health, banking, finance, and insurance, and distribution, hotels, and catering all are likely to benefit from agglomeration.73 Therefore, cities that foster the growth of high-elasticity industries that are also part of the service economy will see a benefit for two reasons. The industries with high agglomeration elasticities are more likely to see an increase in productivity as a result of HSR, and those in the service industry are more likely to attract further business development.

4: Human Capital

Businesses that benefit most from HSR require a highly educated labor force. Therefore, the cities that can provide exceptional human capital will benefit the most from HSR by growing existing businesses and attracting new companies. Dell, the Austin-based global technology firm which operates 160 sites in 42 countries, says the local talent pool is the prime motivator for choosing a new office location; more important than political stability, infrastructure development and energy costs.74 The same is true for Wipro, which lists human capital first in its parameters for choosing a new location.75 The value that companies place on a highly skilled labor pool makes clear the connection between HSR and education. Major universities in the northeast have much to gain from the increased accessibility provided by high-speed rail. In addition, universities can help cities capitalize on the benefits of the

Penndesign 2012 studio report new rail line by educating the local labor force. Innovative partnerships between universities and workforce development organizations can help bridge gaps between educational attainment and the skills required to participate in growing industries in a knowledge economy.

5: Quality of Life

Dell Headquarters: This Austinbased global technology firm noted that access to a local talent pool is the prime motivator for choosing a new office location.xii

Avenue of the Arts, Philadelphia.xiii

The growing knowledge economy relies heavily on highly skilled employees, an increasingly mobile and selective labor force. Urban amenities can play a significant role in the attraction and retention of these highly skilled employees. In a recent report by The Economist ranking global city competitiveness, the authors stress the importance of quality of life in attracting businesses and their employees. Cities cannot only focus on “skyscrapers, rail links and other infrastructure, but also on the softer aspects that will be crucial to their ability to attract and develop tomorrow’s talent.”76 Quality of life improvements may include upgrades to parks and recreational spaces and investments in arts and culture through established institutions but also successful grassroots programs such as the Mural Arts Program, the Philly Fringe Festival, the Art Center of Philadelphia, the Arts in Education Partnership, and the Bicycle Coalition of Greater Philadelphia.

Access to affordable housing is another important part of having a high quality of life. HSR will put pressure on local station areas to develop land for high-value uses such as office space and luxury housing. In order to provide affordable housing to users of HSR and local transit connections, cities should focus on innovative ways to fund additional housing. To address affordable housing in the Bay Area, the Metropolitan Transportation Commission, San Francisco’s metropolitan planning organization, developed the Bay Area Transit Oriented Affordable Housing fund. This revolving loan fund provides several different low-interest loan packages to developers to help finance affordable housing near important transit interchanges.77 The development of this fund required significant investment from several regional partners, as well as private sector banks, which capitalized the loan.78 This type of innovative thinking and investment in affordable housing can provide the improvements in quality of life necessary to attract and retain a workforce best served by HSR while ensuring a degree of social equity.

6: Leadership

While connectivity, the regulatory environment, industry mix, human capital, and quality of life all contribute to a city’s ability to capitalize on HSR, strong and consistent leadership is essential

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PLANNING AHEAD: OLYMPIC LEGACY In July of this year, millions of people will flood London for the 2012 Summer Olympics. As a central premise of its bid, London is concurrently planning the events and the reuse of the Olympic lands when athletes finish the games. Three years prior to hosting the Olympics, the UK government set up the London Olympic Legacy Committee to plan for the development of the land after the athletes, spectators, and media leave.83 In February 2012, Mayor Boris Johnson created a Mayoral Development Corporation to give the Olympic Legacy Committee plan the legal authority and political clout necessary to implement the Committee’s projects. Over the next ten years, this new entity, the London Legacy Development Corporation, will turn the massive 250-acre Olympic site into communities with 11,000 homes, 10,000 new jobs, 11 schools, and 250 acres of parks and open space.84 Major infrastructure projects have the power to transform the economies of cities. Planning for the development of communities around major infrastructure is critical to the long-term economic success of local areas. London has taken the initiative to coordinate planning for the development of the Olympic site prior to the beginning of the games. Cities throughout the Northeast Corridor must plan in advance of the construction of HSR to best capitalize on its economic potential. The experience in a number of European and Asian cities also demonstrates that HSR can have an effect on local leadership that is similar to that of the Olympics coming to town. A number of cities have used the impetus of HSR as a catalyst for other infrastructure and quality of life investments. Northeast cities can use the coming of Northeast HSR to achieve similar outcomes.

in corralling these various elements into a cohesive strategy. Lille, Limburg, and Montabaur only have HSR access because of strong, locally initiated campaigns to bring the line to and through these cities. Once the route was settled, Lille benefited from Mayor Pierre Mauroy’s “long term vision and practical action to achieve it.”79

The United States has a history of moving large infrastructure projects forward through strong leadership. Politicians called the Transcontinental Railroad, when Connecticut native and businessman Asa Whitney first proposed it, “one hundred years before the time.”80 However, the project gained additional champions, including Theodore Judah and eventually President Abraham Lincoln, who pushed the project to its completion.81 Contemporary examples include Denver Mayor John Hickenlooper with the FasTracks system, and Governor Jerry Brown with California High-Speed Rail.82 Considering the complexity and comprehensiveness of a strategy to capitalize on HSR in the Northeast Corridor, states and cities will need strong leadership to ensure that they are positioned to benefit from the investment. They will also need to plan ahead and plan to sustain strong, consistent leadership over the generation or longer that it will take to complete rebuilding and modernization of the NEC.

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Introducing a Competitive Grant

Lord Heseltine.xiv

Throughout history, transportation investments have brought significant economic changes to cities and regions. Contemporary research about high-speed rail services in other nations demonstrates that new high-speed lines can lead to significant economic growth. Cities from Lille to Llieda have used the development of high-speed rail to their best economic advantage by planning and positioning for growth long before the first train entered the station. High-speed rail in the Northeast Corridor represents an opportunity to build the local economies of cities throughout the region. Building the new rail line is expected to cost around $100 billion, and achieving a state of good repair on the existing corridor will add even more costs. A small fraction of that amount could go a long way towards incentivizing coordinated planning for high-speed rail in cities up and down the coast. One tool used successfully in both the United States and

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Leadership: Lord Michael Heseltine During a charette in London this spring, several members of the studio met with Lord Michael Heseltine, former Deputy Prime Minister of the United Kingdom. Lord Heseltine has been involved in numerous urban regeneration efforts over the past 42 years under the past four prime ministers. In this meeting, Lord Heseltine gave several insights into the importance of strong leadership to implement large projects. He noted three characteristics that make an effective leader: a personal interest in projects, a willingness to follow one’s judgment to take risks, and a consistency of direction over time. As a Junior Minister in the late 1970s, Heseltine voiced an interest in streamlining and reorganizing local government to improve urban regeneration efforts. Soon after he was granted permission to usurp planning privilege in Liverpool, the city’s turmoil peaked in the 1981 Liverpool Riots. On hearing about the riots, Heseltine felt personally responsible for the situation. He asked for a leave of absence from his work, and he went to Liverpool to walk the streets, meet with locals, and, above all, listen. In three weeks of doing this, he worked with the community to generate a list of 31 projects to reverse the city’s decline. Heseltine returned to London and his work, but for the next 18 months, he traveled to Liverpool every week to meet with local community organizers for dinner on Thursday evening and discuss the progress of each of the 31 projects. Every Friday, he would make rounds and site visits to troubleshoot any problems and keep the projects on track. From this experience, Heseltine wrote a pamphlet called “It Took a Riot” to inform politicians of the importance of being on the ground and involving bottom-up, community-driven efforts for urban regeneration projects. Heseltine is a member of the Conservative party, but he has often struck out against traditional Conservative beliefs when he felt that more liberal policies were better suited to accomplish his goals. For example, Heseltine set up the City Challenge, a competitive grant program to incentivize urban regeneration efforts that is discussed later in this report. He also believes that market intervention is a justified and necessary role for the government. As he explained, “the market has no morality. It is up to politics to determine the morality within which capitalism operates.” Heseltine shared the story behind the recent Docklands development, which also began through a willingness to take risks. In response to the original failed development at the Docklands site, then Prime Minister Margaret Thacher made a personal call to developer Paul Reichmann and asked him to carry out the development. Reichmann sent six independent advisors to survey the site. Five of the six advisors told him that the site was absolutely not viable. One of the advisors said it might be potentially viable. Reichmann boarded a plane, flew to London, and within 24 hours he had signed on to the project, which has since grown into one of the city’s successful developments. Heseltine noted that because he has been in the same line of work for more than four decades, he now has the opportunity to reflect and assess the outcomes of his work, which will be the subject of his next book. While he maintains that “we don’t do vision in this country,” Heseltine’s life work traces a trajectory of a clear, consistent vision, though perhaps by a different name, to work towards successful urban regeneration through any means possible. Heseltine owes much of the success of this career to his personal interest in his work, his willingness to take political risks to do a project justice, and his diligence to his goal of improving urban regeneration practices. As a result, the state of urban regeneration in the United Kingdom owes much of its success to Heseltine’s leadership.

Penndesign 2012 studio report the UK to encourage coordinated planning and development is a competitive grant process.

In 1991, the Conservative government in the UK instituted City Challenge grants to provide financial incentives for coordinated planning at the local level to develop disadvantaged areas. In order to win the grant, cities had to demonstrate effective coordination between city organizations and propose a package of benefits for the city. [City Challenge structure] Initially designed for implementation in ten local districts over five years, at least 31 areas were selected for a grant.85 Once localities demonstrated enough coordination to win a grant, they were required to develop an Action Plan for implementation.86 Lord Michael Heseltine, former Deputy Prime Minister in the Thatcher government, pointed to the City Challenge grant as a critical program necessary to force cities and local authorities to strategize.87

In the United States, the recent TIGER (Transportation Investment Generating Economic Recovery) competitive grant program has leveraged billions of dollars of non-federal funding with strategic federal investments to close budget gaps and begin construction of transportation projects throughout the country [TIGER structure]. The TIGER program was authorized as part of the American Recovery and Reinvestment Act of 2009 (ARRA) and has since completed three rounds of awards. Unlike the City Challenge grants, TIGER grants are awarded on a project basis. Several projects in one city can compete against each other for an award, but the grant criteria favor those applications that demonstrate coordination between agencies or between cities. This structure provides more flexibility because many different agencies can write grant applications, but it may not stimulate the type of coordination that the City Challenge grant requires and that is critical for developing the opportunities of high-speed rail. However, both grant programs have led to innovative proposals and the completion of physical projects.

A similar competitive grant process can provide the impetus for coordinated planning and project development around HSR in cities throughout the Northeast. There are several possible structures for administering and funding this grant. The Financing section of this report details the institutional design for implementing high-speed rail in the Northeast Corridor. Administration of the grant would take place at the megaregional level, by an independent organization funded through the Northeast Infrastructure Bank. Funding for the grant would flow from the sources used to raise capital dollars for the construction of the HSR system, including a possible combination of sales, gas or income tax at the local and state levels. Additionally, if the federal government recognizes economic development in the Northeast as a priority, it could authorize funding for this regional

Penndesign 2012 studio report competitive grant, which applicants could match with their own funding sources. The City Challenge Grants and TIGER grants provide different models for administration. In the City Challenge Model, one organization per designated region could apply for a grant and that grant application would include a package of coordinated investments and programs. In the TIGER model, several organizations from one city could compete with grant applications for different projects. Applicants could include local agencies, non-profits, or local, city or state governments. In each case, grants should be used for more than transportation infrastructure investments. Grant applications should relate to the five benchmarks cities should achieve in order to fully realize the benefits of high speed rail. These include: • Local transportation that connects smoothly to the new HSR service, • Regulatory and planning systems (such as comprehensive plans or zoning codes) that facilitate productive station area development,

• Business development programs that recruit industries which benefit most from HSR,

The City Challenge Grants and TIGER grants offer different models for the 2012 Studio’s proposed grant program.

Penndesign 2012 studio report • Workforce development programs that partner with universities to advance the education and skills of the local workforce local,

• Programs and infrastructure investments that support a high quality of life including vibrant arts, and parks and green spaces for recreation, and • Strong leadership that champions the importance of capitalizing on HSR.

Spending a comparatively small amount of money on city and regional coordination in preparation for the arrival of high-speed rail would motivate leaders in the public and private sectors to coordinate planning and regeneration with the development of the new rail system.

LESSONS FROM COMPETITIVE GRANTS: Successes of competitive grant processes:

• Encourage cooperation between multiple parties (governments, interest groups, etc) • Lead to the development of high value projects • Leverage significant local funding

• Flexible parameters allow for innovative proposals Challenges to competitive grants: • Flexible parameters make the decision process in awarding grants difficult to track, and therefore easy to manipulate politically

• Rapid and competitive writing of grant proposals can minimize community involvement • Without proper program funding, only the highest-value projects can ever be funded

Philadelphia Effects and Impacts of HSR in Philadelphia

The benefits outlined above can be realized for Philadelphia and the Delaware Valley region, when HSR in the Northeast kicks off with the Early Action HSR, linking New York City’s Penn Station and Philadelphia. Philadelphia is “HSR-ready” in many key respects. With faster, more reliable service, the labor force can take advantage of Philadelphia’s proximity to other Northeast cities by choosing to live in the city and commuting to other cities,

Penndesign 2012 studio report or by living elsewhere and working here. Businesses would have a powerful incentive to take advantage of these attributes, and choose Philadelphia as a strategic location – particularly given the city’s lower cost of living relative to other Northeastern cities. 88 Philadelphia’s industries are also poised to respond to transportation investment. Of the top six largest industries in the Philadelphia-Camden-Wilmington Metropolitan Statistical Area (MSA), four are highly elastic in their response to agglomeration economics– health care and social assistance; professional, scientific and technical services; finance and insurance, and educational services. One industry, accommodation and food services, is moderately elastic, while two industries – retail trade and manufacturing – are unaffected.89

Philadelphia’s three major universities, the University of Pennsylvania, Drexel University, and Temple University add significant student population to the city. In total, Philadelphia’s 88 accredited colleges and universities educate nearly 360,000 students each year. These institutions affect the economy directly by adding jobs and spending, and indirectly by driving creativity and innovation. Greater Philadelphia is second only to Boston in its award rate for bachelor’s degrees, and third in the nation for advanced degrees. It is seventh among all MSAs for total research and development funding brought in by Drexel University, Princeton University, Temple University, Thomas Jefferson University, the University of Delaware, and the University of Pennsylvania. HSR will not only help attract and retain the country’s top students and faculty, but also facilitate their collaboration across the region.90

Tourism is already on the rise in Philadelphia. In 2010, the city welcomed 10 million more leisure visitors than it did in 1997. Tourism generated $8.7 billion in 2010 – a staggering $24 million each day. Visitors generate significant tax revenue for the Commonwealth of Pennsylvania. Tax receipts to the state amounted to $296 million 2010. The addition of HSR would further drive the industry, bringing more visitors and business travelers annually to Greater Philadelphia.91

HSR will add jobs and spending to Philadelphia’s economy, beginning with construction of the first phase, known as Early Action HSR. Applying APTA’s job estimates, spread across 10 years, the capital project would provide 108,400 jobs – 52,400 direct, 13,100 indirect, and 42,900 induced.92 The project would add $108 billion in new business sales, $54 billion to GDP and $4.8 billion in tax revenue to the City of Philadelphia and the Commonwealth of Pennsylvania.93

Finally, Philadelphia would realize the economic gains quantified by past studio reports for the entire HSR project. These benefits include travel time savings, foregone traffic incidents, improved

Penndesign 2012 studio report highway level of service and fewer flight delays as result of mode shift, and reduced carbon emissions. The Early Action HSR Project will add an essential element to Philadelphia’s overall transportation systems. Philadelphia has long been the beneficiary of extensive and legacy transit systems, including commuter rail, transit lines, and bus routes that link the region’s population to and through employment centers and other destinations, particularly in Center City and University City. Philadelphia is one of only a few American cities that is not banded by one or more “beltways”. Current plans to expand the airport and future plans to rebuild the I-95 corridor while retaining its current capacity demonstrate a commitment to balanced transportation. Strategic investment in ports in the Philadelphia region can extend the life of water-based transport of goods. However, above all, HSR can add much needed capacity to the access required for economic vitality and resiliency in Philadelphia.

Preparing Philadelphia for HSR

While this studio focuses on an Early Action HSR project linking Philadelphia and New York City with travel times cut in half, it is necessary for Philadelphia to create strategic policies that will capture the full potential of new HSR and improved rail service. New York City, one of the largest and most competitive global cities with highly established service economies, is likely to continue its growth even while HSR sits on the drawing boards. A smaller, underperforming city like Philadelphia has greater potential to gain through transformative urban regeneration catalyzed by this transportation capacity investment. Philadelphia, as a post-industrial city, will require proactive leadership to prepare itself more fully for its future high-speed rail service.

This section outlines Philadelphia’s current preparedness for HSR by conducting a SWOT analysis across each of five attributes drawn from European examples and various studies. A SWOT analysis identifies Strengths, Weaknesses, Opportunities, and Threats facing a particular entity or place. Strengths and weaknesses are controlled internally by the entity, while opportunities and threats are related to external pressures outside the region. After the analysis, a local project is identified to strengthen Philadelphia’s position with regard to each attribute.

Penndesign 2012 studio report

1: Philadelphia Connectivity As one of the oldest cities in the Northeast Megaregion, Philadelphia has a well-established public transportation system that links regions and neighborhoods settled along rail lines. The city system includes a wide range of public transport options, including regional rail, trolley, bus, and subway services that form an integrated transit network extending from the core of the city to the suburbs. As a result, Philadelphia has high public transit ridership. The Southeastern Pennsylvania Transportation Authority (SEPTA) is the fifth largest overall transit system by miles and the sixth largest rapid transit system by ridership.94 The city’s solid reputation for delivery and ridership growth has aided Philadelphia in procuring state and federal funding for its regional transit-related projects.

SWOT Analysis Diagram.

Despite Philadelphia’s transit assets, the city faces challenges for improving its HSR readiness. While state-of-good-repair backlog prevents SEPTA from making transit expansions, expanding transit capacity is crucial as the city faces heavy congestion. Regional trends reveal that Philadelphia’s transit preparedness for HSR may be inadequate. In addition, the Delaware Valley Regional Planning Commission’s (DVRPC) projected population growth for the region is centralized in the suburbs while urban centers expect a decline in population.

Penndesign 2012 studio report Philadelphia will need to prepare for HSR service. One essential element will be to connect 30th Street Station and Market East Station much more frequently and conveniently, which will help extend the HSR-related benefits to 30th Street Station. The system also needs to upgrade to a single fare collection system, promoting easy and time-saving transfers among various local, regional, and megaregional and bus systems. Philadelphia’s 30/10

Philadelphia’s 30/10: Philadelphia can develop the list of DVRPC’s transit expansion projects into a streamlined implementation plan based off of Los Angeles’s 30/10 plan.xv

DVRPC has identified a list of transit expansion projects in their 2008 Long Range Vision for Transit Plan that will significantly extend service to underserved areas in the region, while increasing capacity of the existing inner city transit system. However, no other regional transit or planning authority’s longrange plans incorporate the Long Range Vision for Transit. Philadelphia could present its list of transit expansion projects in the DVRPC’s Long Range Vision Plan in a format similar to

Penndesign 2012 studio report Los Angeles’s 30/10 Plan, which specifies the cost and economic benefits of each project and hemables the prioritization of these essential infrastructure improvements. Along with collaborative efforts from other regional authorities such as the City of Philadelphia, SEPTA, and the Port Authority Transit Corporation, Philadelphia’s 30/10 transit expansion plan can address the limited regional transit capacity that could hinder the city’s benefits from HSR.

2: Regulatory Environment

Philadelphia has an infamous real estate and wage tax system that encourages suburban business development. As of 2012, Philadelphia’s real estate tax is being reconsidered in the city’s bid to make Philadelphia a more attractive city for businesses and residents. In 2009, the City of Philadelphia passed a zoning ordinance allowing for transit-oriented development (TOD) overlay zones. The city government has completed several studies on transitoriented corridors within Philadelphia, with the intention of using dense station-area development to stimulate revitalization. For little cost, the city of Philadelphia can apply its TOD overlay zones around its Market East and 30th Street Stations, both of which will be served by dramatic improvements to rail service. Lower Schuylkill Master Plan

In the past few years, DuPont and Dow Chemical have closed their Philadelphia facilities, and Sunoco is leaving its refinery along the lower Schuylkill River in the summer of 2012. This vacant land is an opportunity for massive urban redevelopment if the regulatory environemnt is supportive. The Philadelphia Industrial Development Corporation (PIDC), Philadelphia City Planning Commission, and the City of Philadelphia’s Commerce Department are collaborating to develop a master plan that addresses the sustainable reuse of the lower Schuylkill, maximizes its economic potential, connects it to the rest of the city and uses its waterfront’s recreational value.95

3: Industry Mix

Many of Philadelphia’s existing industries should be able to capitalize on the agglomeration benefits brought by high-speed rail. For example, Philadelphia has strong communications and IT industries, which are both sectors that are likely to see increases in productivity as a result of agglomeration. Philadelphia’s healthcare industry will be able to increase its accessibility to markets as more people can commute to Philadelphia for medical

Lower Schuylkill Master Plan.xvi

Penndesign 2012 studio report services. Philadelphia’s tourism industry can grow, as more international tourists will be able to take day-trips from New York City and elsewhere. To fully realize the opportunities that would be presented by Early Action HSR, Philadelphia needs to take steps to stabilize its job and population base. It also needs to strengthen its industry mix by retaining white collar jobs in such industries as finance, law and consulting, many of which are currently moving to the suburbs. Select Greater Philadelphia Select Greater Philadelphia: Select Greater Philadelphia works to attract businesses to the region.xvii

Select Greater Philadelphia is an economic development marketing organization that aims to attract companies to the Greater Philadelphia region. It serves as a resource to provide detailed information about the 11-county area. Select Greater

Philadelphia’s comparative advantage: vacant land

The City of Philadelphia has approximately 40,000 vacant lots. These parcels present several challenges for the city. Many of the individual parcels are too small to attract developers, yet they require high maintenance costs, create persistent blighted blocks, and generate tax delinquency.96 Private owners of 17,000 vacant lots are behind in paying their taxes, and two thirds of those have been delinquent for more than 10 years.97 The city faces additional challenges with the 12,000 publicly-owned parcels, which are controlled by many different agencies. Without a cohesive agenda across these agencies, there has been no general strategy regarding vacant land, and no single entity is solely responsible for the acquiring, assembling, and disposing of vacant parcels, or of making strategic land use decisions to support such a strategy. 98 However, the abundance of vacant land in Philadelphia is also one of the city’s greatest assets.99 Philadelphia provides one of the lowest office rental rates among similar-sized urban regions in the United States, with rates far below those in New York, and Washington, DC. To complement these low rates, Philadelphia has an abundance of undeveloped land, particularly compared to New York and Washington DC, including large lots that could accommodate industrial functions.100 Philadelphia Industrial Development Corporation’s Lower Schuylkill Master Plan is an opportunity to provide a model for how to take advantage of the city’s abundance of vacant parcels. Sixty-eight percent of the city’s underutilized and vacant land is located within the extent of the plan. Historically, the Lower Schuylkill area has served as the base for many of Philadelphia’s major industrial employers. However, the recent economic downturn caused many employers to leave Philadelphia. As a result, the site holds 20 percent of the total land zoned for industrial use in the city. The Lower Schuylkill Master Plan strategizes the reuse of the 4,000 acres of vacant industrial land along the riverfront according to the city’s vision of becoming a sustainable city with thriving life science, chemical and pharmaceutical industries. Access to HSR service will connect the site to additional resources and a broader potential workforce.101

Penndesign 2012 studio report Philadelphia provides a set of regional data that outlines the region’s comparative advantage to other urbanized areas. It highlights certain industries that have a large presence in the region and are growing rapidly, such as life science, education, logistics, communications and information technology.

Select Greater Philadelphia offer a variety of services to help businesses relocate to the Greater Philadelphia region which includes connecting to local executives, guiding site tours and creating customized proposals. These services serve to help businesses make informed decisions about relocating to the Greater Philadelphia region. Their services are valuable to improving the region’s industry mix as they serve as a guiding agency to aid the growth of specific industries that will benefit the region’s long-term economic vision.102

4: Workforce Development

The City of Philadelphia faces many challenges related to workforce development. One of the most severe obstacles for economic recovery and growth is the perpetual structural unemployment that comes from the mismatch between existing industries’ needs and the qualifications of most inner city residents. Philadelphia’s population has low college attainment rates and the city has a scarcity of low-level jobs. Most of the job openings in prominent industries in Philadelphia require at least a bachelor’s degree. At the same time, there is a severe shortage of career development programs for those trying to obtain a bachelor’s degree. The city also suffers from fragmentation of workforce development agencies and a lack of collaborative efforts by these agencies. In addition to the gap in employment and skills of employees, many Philadelphians share a disdain for the city’s public schools which contributes to low education attainment rates for inner city residents.

In recent years, the federal government has adopted programs promoting workforce development. The Obama Administration’s community college initiatives encourage citizens to return to school, and the close collaboration between the Department of Education and Department of Labor reflects their recognition of the need for a more integrated workforce development programs. In Philadelphia, the Chamber of Commerce is also working to upgrade the city’s workforce development programs. The high concentration of accredited higher education institutions in the city provides Philadelphians with ample opportunities to gain post-secondary schooling. The challenge facing the city and its residents is to find ways to provide Philadelphians with the skills, values and financial resources to avail themselves of these opportunities.

Penndesign 2012 studio report Graduate! Philadelphia Graduate! Philadelphia is a program that aims to increase the number of adults with college degrees in the Greater Philadelphia region. It is partnered with 17 of the local colleges and universities with high graduation rates and is fully accredited. Graduate! Philadelphia works with non-traditional age college students and higher education institutions to create the most flexible, focused and convenient curriculum that will assist them in their career path after obtaining their degrees. Graduate! Philadelphia offers counseling and services throughout the education process, including helping participants find quiet study spaces, preparing college applications, and planning a curriculum that accommodates applicants’ schedules.103 Graduate! Philadelphia receives funding form the Philadelphia Education Fund, the City of Philadelphia, the United Way of Southeastern Pennsylvania, and other charitable foundations.

Graduate! Philadelphia is well situated to work towards Philadelphia’s workforce development goals as the city’s IT & computing, healthcare, and education industries offer many job openings that require mid-level skill-sets. By increasing the number of Philadelphia’s adults with college degrees, Graduate! Philadelphia helps Philadelphia-based industries by creating a better-qualified pool of applicants and Philadelphia residents to maximize their career potentials.

Graduate! Philadelphia.xviii

5: Quality of Life

From trendy BYOB restaurants to major sports arenas, Philadelphia has rich amenities that provide a high quality of life for a relatively low cost of living. In particular Philadelphia is known for its Revolutionary-era historical sites, world-class art and theatre, and extensive park system. In recent years, city government and local organizations have put visible efforts into upgrading existing amenities and bringing new services to the city.

In 2009, Mayor Nutter created the Office of Sustainability which released Greenworks Philadelphia, a document that outlines the city’s plan to become the greenest city in America. A new development corporation, the Delaware River Waterfront Corporation has released an ambitious new plan for reinventing Philadelphia’s historically industrial waterfront as an unparalleled space for recreation, outdoor cultural events, and private development.

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Penndesign 2012 studio report More recently, the EPA officially approved the Philadelphia Water Department’s landmark plan for managing stormwater runoff through green infrastructure. On April 10, 2012, the City of Philadelphia and the U.S. Environmental Protection Agency signed a partnership agreement to support Philadelphia’s approach to sustainable stormwater management through green infrastructure. Green City, Clean Waters is the first plan in the United States approved by the EPA to manage storm events and polluted runoff through wide-spread, small scale interventions such as rain gardens, green roofs, tree bump-outs and rain barrels in addition to key gray infrastructure (sewers, cisterns, etc) investments. If successful, the addition of trees and plants to manage stormwater also has the potential to increase property values, reduce high temperatures typical of urban summers, and most importantly, improve water quality in streams and rivers throughout the city.

Philadelphia also has a long-standing and lively arts tradition. The Mural Art’s Program, the largest public art program of any city in the United States has produced over 3,000 murals throughout the city, and provides art education programs to 1,500 youth every year.104 Nearly a million people visit Philadelphia’s Museum of Art each year, one of the largest art museums in the nation. The 10 year Master Plan for the museum will provide additional space for Contemporary Art, American Art, Asian Art and a series of brand new public spaces.105 The Mural Art’s Program and the Museum of Art are two of Philadelphia’s most significant representatives of visual arts in the city, but examples of visual art, dance, and music abound. These environmental efforts and art programs are well underway in Philadelphia, but if the City wants to continue to attract people as permanent residents, it must invest in new quality of life projects. Reading Viaduct

Following the success of New York City’s High Line project, Philadelphia’s planning authorities, neighborhood groups, and non-profit organizations have turned their attention to the redevelopment and reuse of the Reading Viaduct. The Viaduct is a disused elevated railroad that runs just north of Center City Philadelphia, adjoining the proposed Market East HSR station.106

In 2003, a neighborhood group was formed for the advocacy of Reading Viaduct’s redevelopment, which led that year to a study funded by the City of Philadelphia to examine the cost of removing versus redeveloping the existing viaduct into a park. The latter was found to be more cost-effective, at a total cost of

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Green City, Clean Waters: Philadelphia proposed to capture stormwater runoff through a combination of green infrastructure tools.xix

Penndesign 2012 studio report $5.1 million. In 2011, the Center City District obtained grants to begin the redevelopment project for a small portion of the Viaduct, which will be completed in 2013.107

The creation of a park not only fulfills the predominantly residential neighborhood’s need for a functional public space, but it will also assist in the city’s goals of revitalizing North Broad Street. The viaduct’s neighborhood is a part of the studio’s proposed Tax Increment Financing (TIF) district. Therefore, the improvement in quality of life in the TIF district through the creation of a new public space will increase the success of the TIF program.

Philadelphia faces many challenges to improving its quality of life: most notably, high crime rates and an unstable school system. However, by continuing to invest in measures to improve quality of life, Philadelphia will be one of the most affordable, large cities on the new high-speed rail line with valued public amenities. Reading Viaduct: Center City District will begin the redevelopment of this disused elevated railroad into a linear park.xx

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Conclusion The SWOT analysis of Philadelphia illustrates how the City can build on its existing assets to overcome its industrial legacy and embrace HSR as an economic engine. By improving regional connectivity to the new HSR stations, revising local regulations to plan for growth and encourage development, recruiting new types of industry, and educating the labor force to work in the service sector economy, Philadelphia can realize a vision of increased prosperity and equity. In addition to these economic factors, improving the quality of life in the city can play a major role in attracting and retaining residents. Post-industrial cities across the U.S. and Europe are struggling to remake themselves in a new knowledge-based economy, but examples such as Lille in France demonstrate that such a shift can occur. However, in order to complete a HSR connection to the city, and meet the benchmarks described in this report, each city along the HSR line must have leaders capable of coordinating a comprehensive approach to HSR. Successful leadership involves collaboration across government, industry, and civic organization boundaries. For example, the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings is made out of partnership between PennState University, the Philadelphia Industrial Development Corporation, The Delaware Valley Industrial Resource Center and the Wharton Small Business Development Center. Each of these groups worked together to win $129M from the U.S. Department of Energy to improve energy efficiency of buildings.108 This partnership around renewable energy represents the type of cooperation and coordination that governments, non-profit agencies and the private sector will need to capitalize on the investment in HSR. Three highly successful cities anchor the Northeast Corridor: Boston, New York and Washington, DC. However, the cities that need a major push to develop their economies have the most to gain from the upgraded rail system. These benefits come in the form of urbanization, agglomeration, and the growth of new industries and new sources of innovation through relationships between people and between universities. Each of these broad benefits has a tangible economic impact on local economies. This section proposes five benchmarks to help cities capitalize on HSR. These benchmarks represent viable strategies for city growth even without the investment of high-speed rail. However, cities that develop the coordination and leadership to achieve these benchmarks will best capitalize on one of the largest, most significant infrastructure investments in recent history, and realize their full potential of economic growth from high-speed rail.

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Wall Street, Philadelphia City Hall, and U.S. Capitolvii

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FINANCE STRATEGIES Introduction Across the Northeast today, significant investments in transportation infrastructure are underway. In New York, replacement of the Tappan Zee Bridge, a crucial link between New York City and the rest of the state, will help to ensure that the structure continues to support current daily traffic volumes of 132,000 vehicles, as well as future increases in travel demand.1 Fast-tracked by the Obama administration, early estimates of the project stand at approximately $5.2 billion.2 New York’s Metropolitan Transportation Authority (MTA) is proceeding with the first phase of the Second Avenue Subway, a $17 billion project envisioned more than 75 years ago.3 It is a project that will forever change the way people travel by public transit in New York City, ultimately providing 16 new stations, 28 new trains, and limitless opportunities for better connections and reduced congestion.4 The MTA has also made significant progress on the $7.6 billion East Side Access Project (ESA), which will connect the Long Island Railroad to Manhattan’s East Midtown employment hub. ESA is expected to cut 40 minutes off daily travel time for an estimated 60,000 rail commuters. In Massachusetts, the Fast Fourteen Project expedited the replacements of fourteen bridges over ten weekends between June and August 2011. The $98.1 million project saved at least four years and millions of headaches for drivers by using innovative bridge construction techniques and materials over conventional methods.5 In addition, the Commonwealth of Massachusetts has announced its decision to extend commuter rail service to Fall River and New Bedford on the State’s southern coastline.

In Washington, DC, the $5.25 billion Dulles Corridor Metrorail Project will provide 23 miles of new transit infrastructure and 10 stations, extending Metro’s Orange Line to Dulles International Airport and Loudoun County.6 The project is expected to

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Penndesign 2012 studio report strengthen and integrate the transit network’s connections by providing one-seat, no-transfer rides between the airport and the city’s downtown. High-speed Rail in the Northeast Corridor has the potential to join an ever-growing list of improvements to the region’s transportation network. New rail system capacity will shorten travel times between cities, allow for improvements to intercity and regional transit systems, and reduce congestion on our roads and in our skies. It is a project that stands to be innovative in its design and in its financing.

In addition, the Northeast megaregion regularly contributes more in federal taxes than it receives. A review of the nine states in the Northeast megaregion (Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, and Washington, DC) shows that these states collectively receive $0.98 in federal spending for every $1.00 in federal taxes that is paid to the federal government annually.7 While this $0.02 difference seems relatively insignificant, in the course of a year, it accounts for close to $8.5 billion.8 When Washington, DC, which receives a tremendous amount of federal spending each year, is removed from this equation, the difference between federal spending received and federal taxes paid for states in the Northeast megaregion skyrockets to $39.6 billion.9 For the Northeast megaregion states, this notion of balance of payments hardly appears balanced. With these states contributing so much to the federal budget, investing in major infrastructure projects like HSR in the Northeast Corridor could help to address this imbalance. In the absence of any changes to this balance of payments concept, Northeast Corridor HSR will be initiated during a time when the federal government is dramatically reducing its financial commitment to new infrastructure investments. For this reason, this report outlines a variety of financing techniques for NEC improvements with the goal of advancing the potential for funding HSR and other regional infrastructure. In developing funding scenarios, this report provides novel and creative approaches to fund and finance major infrastructure projects including HSR and its related investments. These scenarios illustrate that, by mixing and matching the range of possible contributions from public and private sources, such sources can generate the revenue and resources to implement critically needed improvements to infrastructure capacity, economic advantage, and quality of life.

This “mix-and-match” approach pervades the proposed financing strategies as a way for transportation agencies, transportation advocates and organizations, governments, business leaders, and

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Penndesign 2012 studio report local workers and residents to discuss how HSR will transform the Northeast Corridor and how to make it happen. With contributions coming from multiple sectors, the financing of an HSR line can be a collaborative effort that successfully achieves its goal of fostering economic competitiveness and quality of life in the Northeast megaregion by strengthening transportation connections.

The proposed financing approach starts with the concept that, while federal grants and loans will be essential to the success of this venture, regional and local sources should leverage and support both federal and private investments along the Northeast Corridor. With this in mind, there are several strategies that present different ways of thinking about regional and local contributions, from tax increases that provide revenue to added value to real estate around rail stations that can be captured and leveraged to support transportation improvements. The report first focuses on ways to capture revenue at the regional level and analyzes how increases in motor fuel and sales taxes could provide valuable capital. Based on the demonstrated success of many communities across the United States, the studio teamâ&#x20AC;&#x2122;s scenarios demonstrate possibilities that could be appropriate in the future as governments at all levels look for ways to increase revenue to support critical infrastructure improvements. The report then evaluates how local value capture and station area development strategies can leverage funding for transportation projects like HSR and how fees connected to HSR ridership like user fees and passenger facility charges can serve as potential revenue-generating approaches. The report follows this with a discussion about how federal support can provide gap funding and incentivize economic growth in the region. With programs like the Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing Program (RRIF) already in place, and as current proposals for a national infrastructure bank float around Washington, the federal government can serve as a valuable resource for kick-starting construction and providing a crucial incentive for private sector involvement.

With support and funding coming from diversified regional, local, and federal sources, and mutual dedication to improving transportation connections along the Northeast Corridor, private sector entities will be more willing to invest and get involved in the projects. The â&#x20AC;&#x153;mix-and-matchâ&#x20AC;? approach can then go even further in fostering public-private partnerships and integrating financial resources from public and private sector stakeholders.

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Infrastructure improvements are occurring in many locations throughout the Northeast Corridor today, including New York’s Second Avenue Subway.i

Summary of Project Costs Early Action HSR, Phase 1 of the proposed Northeast Corridor HSR system, involves three major expenditure categories: • State of Good Repair (SoGR)

• Two dedicated high-speed tracks and related infrastructure from New York City to Philadelphia (Early Action HSR)

• Strategic improvements between Washington, DC and Philadelphia, and between New York City and Boston (Strategic Corridor Upgrades)

Current cost estimates for SoGR vary widely, but Parsons Brinckerhoff performed the last complete study in 1999 for the Amtrak Reform Commission’s Report to Congress. This report estimated total SoGR costs between the Pennsylvania/Delaware border and New York City to be approximately $2.7 billion (1999$). In today’s dollars, this figure grows to $4.0 billion. However, since 1999, Amtrak and the federal government have worked through portions of the backlog, replacing the most vulnerable parts of the system. Assuming conservatively that Amtrak has addressed half of the total SoGR need for the Corridor, this would place the remaining cost at $2.0 billion.

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Based on cost estimates developed by the 2010 and 2011 Penn HSR studio reports, this report estimates the total cost of Early Action HSR to be $32 billion. Because it involves significant tunneling through Philadelphia and major upgrades around New York-Moynihan Station, this segment represents a significant portion of the overall $100 billion investment required to develop and implement HSR along the length of the Northeast Corridor, as estimated by the 2010 Penn HSR studio.

Penndesign 2012 studio report The total PHL-NYP portion of Phase 1 is estimated to cost $33.5 billion, including hard and soft costs but excluding land acquisition. This investment will allow for increased frequency and decreased travel time between Philadelphia and New York City; however, in order to allow the southern and northern segments extending beyond these two cities to take full advantage of the additional capacity, complementary strategic improvements to rail segments to the north of New York and south of Philadelphia airport are also required. Approximately $10 billion in additional improvement funds is included in the Phase 1 package. These projects, detailed in the Connections chapter of this report, include grade separations, station capacity improvements, curve straightening, and movable bridge replacements. These projects will allow residents of the megaregion beyond the PHL-NYP segment to experience substantive service improvements before the full build-out of HSR in the Northeast Corridor occurs, and will also maximize the benefits of the Early Action project by improving flow and capacity of the corridor overall.

The $42 billion Phase 1 project will expand capacity and provide significant economic benefits for cities in the megaregion by adding a significant new high-speed service at increased frequency and also, very importantly, by improving the reliability and speed of regional and commuter trains as well. Financing such an innovative project requires innovative approaches. The following sections highlight the funding options and present a range of scenarios to demonstrate how HSR in the Northeast Corridor can be supported and leveraged by investments from regional, local, federal, and private sources.

This analysis suggests that the following percentages over the overall HSR project in the Northeast Corridor could be funded and financed by local and regional sources, leaving the remaining amounts required from the federal government in the form of seed money, grants, and tax policies: Sources of Funding: Federal and Non-Federal Sources Case

Federal Sources (% total)

Other Sources (% total)

Total Sources ($B)

Conservative

79% 48%

21% 52%

$154.0 $131.8

14%

86%

$128.7

Moderate Best

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Regional Resources for Infrastructure Financing In 21st century America, the idea of raising taxes is rarely popular. In today’s political climate, a call for increased tax rates may not appear feasible at first glance, yet several cities and metropolitan regions have been successful in voting initiatives and innovative programs that use local revenues to build systems of infrastructure. The strategies presented below demonstrate a variety of ways to provide funding streams for major infrastructure projects rather than signaling a single path to follow. They are meant to show that significant revenue could be raised with small increases in the taxes applied to gasoline consumption and sales. Taxes not currently or little used in the United States today are also discussed as potential sources of revenue.

With all of the tax proposals presented here, the studio team proposes that increased tax revenues would be dedicated to funding infrastructure improvements, not only HSR investments in the Northeast Corridor. They are for bridges, roads, transit, water, and energy projects across the states in the Northeast megaregion. They are meant to support state of good repair projects, to fix ailing infrastructure, and to provide an integrated and connected transportation and utility network. This balance addresses the need not only for infrastructure improvements directly along the Northeast Corridor but also for places such as western Pennsylvania and upstate New York that will also benefit from increased investments in local infrastructure.

The tax scenarios discussed below focus on “best case,” “moderate,” and “conservative” approaches. For each type of tax, the details of each of these approaches are discussed to demonstrate the potential funds they could raise. Because these models are designed purely to demonstrate the potential of various taxation and value capture strategies, they do not explore the effects on important issues regarding economic equity. Sales taxes, for instance, are generally more popular among electorates but are ultimately more regressive than less-palatable income tax increases.

1: Gas Tax

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The federal Motor Fuel Excise Tax on gasoline today stands at 18.4 cents per gallon. Since President Bill Clinton and Congress approved an increase of 4.3 cents in 1993 under the Omnibus Budget Reconciliation Act of 1993, the gas tax has not increased.10 While many proposals have called for the federal gas tax to be increased since then, none have succeeded.

Penndesign 2012 studio report

For states, the situation is similar. State gas taxes in the Northeast megaregion vary widely, from 49 cents per gallon in New York to 14.5 cents per gallon in New Jersey (in addition to the federal tax).11 Because the price of gasoline is so salient to most Americans, proposals for raising such taxes face contentious opposition and yet are far less than the taxes paid for motor fuel in most other developed countries, particularly those with a focus on carbon emissions. While Europe is often known for having much higher gas prices than the United States, even Canadaâ&#x20AC;&#x2122;s gas tax rate of $1.20 (USD$) per gallon, while much lower than many European countries, is still roughly three times the U.S. average.12

Despite these challenges, this report presents three scenarios on how a fuel tax increase could provide funding for HSR and other transportation and infrastructure improvements. Rather than argue for a particular per-gallon increase, these cases merely demonstrate the vast revenue-generating potential of even small tax increases. This includes the proposal that the Northeast states could agree to increase state gasoline taxes in unison, providing political incentive for each stateâ&#x20AC;&#x2122;s governor and legislators to take an action that they probably would not take alone. The gas tax scenarios presented include only funding that would be collected from the nine states in the Northeast Corridor (Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, and Washington, DC). They do not account for funds from states outside of the Northeast megaregion. The Penn studio team prepared a range of scenarios to demonstrate how funding for HSR could be achieved while, at the same time, supporting investments in other transportation infrastructure in the Northeast megaregion. All of the scenarios

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Penndesign 2012 studio report include a variation of tax increases and assume that only 25% of the funds raised will go towards the development and implementation of HSR. The remaining 75% of revenue raised from tax increases will support other transportation and infrastructure investments in the Northeast megaregion, addressing the equity issue between the Northeast Corridor and the rest of the region.

• “Best Case”: 10 cents per gallon increase in both the federal gas tax and in each Northeast state’s gas tax. While this increase is substantial, it would generate a tremendous amount of revenue for transportation infrastructure projects in the Northeast megaregion. If one quarter of this revenue were to be committed to HSR, this scenario would generate $1.1 billion of tax revenues in its first year alone, with an additional $3.4 billion going to other transportation infrastructure projects in the megaregion. • “Moderate”: 5 cents per gallon increase in the federal gas tax and a 10 cents per gallon increase for states in the Northeast Corridor. This scenario could be feasible if states collectively decided to push for more funding for infrastructure investments, ahead of a higher federal gas tax increase. This scenario would support $843 million for HSR in the early years and $2.5 billion for other transportation investments in the Northeast megaregion.

• “Conservative”: The “conservative case” scenario is the most conservative approach featured here, with no increase in the federal gas tax and a 5-cent increase in each Northeast state’s gas tax. Under these conditions, this scenario would provide $281 million per year in the initial stages for HSR alone, with an additional $843 million going to other transportation projects in the megaregion.

2: Sales Tax

A sales tax can serve as an efficient way to raise revenue, especially as it has the ability to capture tourist and non-resident dollars. The scenarios presented here consider increases to state sales tax, as well as to local sales taxes in Philadelphia and New York City. None of the suggested increases require a state to cross the 10% threshold for sales tax. Like the gas tax proposals, only 25% of revenue raised from the sales tax increases will support HSR. The remaining 75% of funding received will go towards other transportation investments in the Northeast megaregion.

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Penndesign 2012 studio report • “Best Case”: 0.50% increase to each state’s sales tax and a 0.75% increase to the local sales taxes in Philadelphia and New York City. Of these increases, 25% would support HSR, resulting in $1.2 billion per year for the project, with this number growing according to historical rates. Having 75% of such increases go to other infrastructure projects in the Northeast megaregion will raise $3.4 billion for such initiatives.

• “Moderate”: 0.25% increase in state sales taxes for states in the Northeast Corridor and a 0.50% increase in the local sales taxes in Philadelphia and New York City. This scenario would support $683 million for HSR in the early years and $2 billion for other transportation, water, and utility investments in the Northeast megaregion. • “Conservative”: 0.10% increase in state sales taxes and a 0.25% increase in local sales taxes for Philadelphia and New York City. Such a policy would generate $319 million for HSR and $957 million for other infrastructure projects in the megaregion.

In all scenarios, 25% of revenues will go towards funding HSR while 75% will be dedicated towards other infrastructure investments along the corridor.

Using Sales Tax to Fund Transportation Projects Many states use increases in sales tax to fund transportation projects. In California, for example, the Los Angeles County Metropolitan Transportation Authority is using revenue generated from a voterapproved sales tax to support its 30/10 Initiative, which aims to expedite construction of 12 mass transit projects in 10 years rather than an original estimate of 30 years at lower funding rates. Such measures allow voters to decide where funding is spent and could potentially be powerful resources for major infrastructure projects like HSR. A similar voter-led initiative is occurring in Greater Denver, Colorado, to support the comprehensive FasTracks regional transit program. Under FasTracks, the Regional Transportation District (RTD) is establishing 122 miles of new commuter and light rail and 18 miles of bus rapid transit for RTD’s eight member counties. In 2004, voters approved a sales tax increase of 0.4% to support the FasTracks project and ensure funding for transit investments in the area. FasTracks demonstrates that for a relatively small amount – 4 pennies on every $10 – investments in transit can help to expand transportation options in Greater Denver.

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3: Income Tax The studio teamâ&#x20AC;&#x2122;s financial analysis also considered the possibility of an income tax increase. Increases to this tax would likely not generate as much revenue as the other tax methods discussed above and thus are not included in the financing proposals put forward later in this section of the report. When developing a comprehensive approach, however, income tax is one of the options available. Finding a way to support transit investment through income taxes could be a possibility for cities looking to improve their transportation systems for their many commuters.

4: Megaregional Sales Tax

While the sales tax options discussed here focus on state and local strategies, a sales tax on the Northeast megaregion could also help to provide funding for transportation investments in this area. This would allow states like New York and Pennsylvania whose boundaries include lands outside the direct reach of the Northeast Corridor rail service to avoid an increase in a statewide sales tax. A regional sales tax could provide a more focused approach towards funding HSR and other transportation improvements in the Northeast Corridor in the event that an increase in the sales tax is decided. However, a lack of intergovernmental support at the megaregional level will provide political barriers to implementation.

Various gas and sales tax scenarios have the ability to raise a substantial amount of funds.

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Conservative Case Sales Tax Scenario

Conservative Case Gas Tax Scenario

Moderate Case Sales Tax Scenario

Moderate Case Gas Tax Scenario

Best Case Sales Tax Scenario

Best Case Gas Tax Scenario

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5: Hospitality/Leisure Tax Tourists will greatly benefit from increased travel reliability and decreased travel times in the Northeast Corridor, and, as a result, the tourism sector in the Northeast Corridor will also benefit. These benefits could be captured through local and state hospitality taxes. In many states, hotel rooms are taxed as a sales and use tax, but in many other states and cities, there is an additional hotel room surcharge. This dedicated revenue stream could provide millions of dollars annually to finance the studio’s proposed transportation investments. In 2010, there were over 44 million room nights in Boston, New York City, Philadelphia, Baltimore, and Washington, DC, a surcharge on which could provide additional financing for transportation projects.

6: Transportation Utility Fee

With municipal budgets in the red across the country, many cities are looking for ways to increase their revenue streams. Considering transportation as a utility for which a landowner pays is one way to do this. A Transportation Utility Fee (TUF) allows cities to charge a monthly user fee for the use of road systems by residents, businesses, institutions, and government agencies. This flat-rate fee appears on utility bills just like water and electricity fees do. Municipalities create a fee schedule for all land uses and, in many cases, affordable housing or residents who do not own a vehicle are exempt from the fee. Furthermore, all landowners, including institutional and tax-exempt organizations such as schools, churches, and government buildings, must also pay the fee. Typically, residences are charged a flat fee per month,

New York City’s MTA Payroll Tax New York City is one example of a city that led the way in using a payroll tax to support public transportation. In 2009, the city started charging a metropolitan commuter transportation mobility tax on individuals and employers doing business within a defined metropolitan commuter transportation district. The city’s local transit provider, the Metropolitan Transit Authority (MTA), receives funds from the tax, which it uses to support transit services in the area. As of April 1, 2012, however, legislators officially repealed the MTA payroll tax for businesses with annual payrolls of less than $1.25 million and reduced tax rates for businesses with annual payrolls exceeding $1.25 million. As a result of these changes, 80 percent of businesses in New York State will no longer be required to pay the MTA payroll tax.14 The case of New York’s MTA payroll tax demonstrates the challenges of using a payroll tax to support transit investments. At the same time, however, this example shows the connection between transit use and businesses, especially since the MTA carries hundreds of thousands of passengers daily to their jobs in New York City.

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while non-residential users are charged by the square foot of building space. Other users, such as hotels, parks, golf courses, airports, and gas stations, are charged by the number of trips generated. The implementations of TUFs in the Northeast would more equitably distribute the cost of providing transportation to everyone and enforce the perception that transportation is a utility for which one must pay.

7: Toll Surcharges

Across the United States, states, transportation authorities, and municipalities often implement highway tolls to capture revenue from travelers passing through. With the Northeast Corridorâ&#x20AC;&#x2122;s increasingly congested freeways, implementing toll surcharges on I-95 and other Interstate highways in the Northeast megaregion could help to encourage shifts in travel behavior and support funding for transportation projects.

8: Gaming Funds

With transit agencies increasingly looking for innovative ways to support transit investments, the lottery serves as a potential opportunity for raising funds. Although proceeds are typically dedicated to certain uses, a portion could go towards funding transportation investments such as HSR. Additionally, several states along the Northeast Corridor have authorized gambling to fund budget shortfalls. These increasing proceeds could also fund infrastructure improvements.

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The City Council of Hillsboro, Oregon passed a TUF to pay for street maintenance. Every residential unit pays a monthly flat rate of $3.10 and the TUF is assessed on the same utility bill as water and sewer.ii

Penndesign 2012 studio report

Pennsylvania’s Proposed Lottery Concept to Support Transit Investments In Pennsylvania, the idea of a lottery to support transit investments is being put to the test. In March 2012, State Representative Harry A. Readshaw (D) proposed the reintroduction of a bill first put forth in 2005 that would allow for the establishment of a lottery specifically designed to support municipal mass transit operations. The revenue raised from the $5 tickets after prizes and costs were paid would go directly to helping transit agencies with their bond repayments. This monetary support would then give agencies more flexibility in determining how they use the funds they do have to maintain services and ensure a safe and reliable transportation system.

9: Regional Greenhouse Gas Initiative The Regional Greenhouse Gas Initiative (RGGI, or ReGGIe) is a collaboration between nine states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) to reduce greenhouse gas (GHG) emissions in the Northeast. Pennsylvania, along with the Canadian provinces of Québec, New Brunswick, and Ontario, serve as observers to the effort but do not currently participate as members.

RGGI supports a cap-and-trade program for GHG emissions from power plants in the Northeast megaregion.15 This effort aims to limit the megaregion’s total GHG emissions by capping and then reducing the amount of carbon dioxide that power plants in the Northeast megaregion may contribute to the atmosphere. Proceeds from the RGGI cap-and-trade program go towards energy conservation and renewable energy efforts. RGGI serves as a strong example of states in the Northeast megaregion currently working together to support actions for a sustainable future. As the cap-and-trade program grows, proceeds could potentially be used to support other sustainable efforts like transit and HSR.

Strategies to Capture Local Value Creation

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The HSR network will provide the opportunity for the regeneration and revitalization of many cities and station areas. Specifically, the HSR stations—with increased connectivity— will be valuable real estate assets that can act as development catalysts in the surrounding area. Station projects should capture some of the increase in area value and use this increase to fund the station itself as well as the public spaces, transit connections,

Penndesign 2012 studio report and other related investments in the immediate station vicinity. Value capture techniques include both area tax increment finance (TIF) and development impact fees such as community infrastructure levies (CIL).

Tax Increment Finance

Tax increment finance (TIF) is a valuable public finance tool already used around the world and in the Northeast to subsidize redevelopment. Area real estate TIF monetizes future gains in real estate tax revenue within a defined area to subsidize current improvements, which are required to create conditions for the increase in revenue. All states in the Northeast, as well as the District of Columbia, have TIF-enabling legislation.

Cities have issued TIF debt for the use of private developers and other organizations to finance public infrastructure, land acquisition, demolition, utilities and planning costs, and other improvements. Most jurisdictions permit only a capped portion of assumed increase in tax revenues to be bonded, and typically TIF debt is capped at 50% of total revenue increase over a 20-year period. In this way, other public purposes, such as tax revenues to the public school system, continue to receive an increase in dedicated income based on the increment. HSR in the Northeast will serve three types of stations: (1) major stations in large cities, some of which have the potential for substantial redevelopment; (2) secondary stations in often lower- performing second-tier cities that can benefit from rehabilitation and expansion; and (3) suburban park-and-ride and local stations that frequently serve affluent areas. Each city in the Northeast has underutilized land in station areas, which will be improved upon with the introduction of HSR as the land increases in value. Therefore, each station could utilize bonded TIF debt, which could substantially fund the redevelopment and enhance the ability of public authorities to commit public moneys and attract private investment in the station area. For example, primary city stations like Philadelphiaâ&#x20AC;&#x2122;s Market

Lancaster Urban Village TOD Project, Dallas, Texas One such current TIF example is the Lancaster Urban Village TOD project in Dallas, Texas. Established in 2008, the City of Dallas issued area TIF debt in the amount of $8.5 million to subsidize the development of a mixed-use project around a station area. Phase 1 of the project will be completed in 2013, and the TOD will feature 193 housing units and 14,131 square feet of retail.16 This is just one example of how TIF debt can be used by developers to capitalize on increased transit connectivity.

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Penndesign 2012 studio report East Station could experience substantial area investment with the introduction of HSR. A quarter-mile radius real estate TIF district around Market East has the potential to finance well over $1 billion in debt, which would leverage station redevelopment; this estimate factors in the 10-year real estate tax abatement and assumes a 3% growth in tax increment per annum. City stations such as Newark Penn Station, which today are surrounded by surface parking, could finance up to $20 million in TIF debt to improve the station to “HSR-ready” status. Newark, New Jersey, is an interesting case because of its energetic mayor, Cory Booker, and its growing human capital, which is catalyzed by institutions like Rutgers University at Newark and its proximity to New York City and the Newark Liberty International Airport. Smaller stations, such as NJ Transit’s Princeton Junction Station, have the potential to generate upwards of $35 million because of high property tax rates and relatively low building density around the station currently. These estimates include similar geographies and estimated growth rates. TIF is just one value-capture technique to be explored. It demonstrates the powerful impact that HSR will have on the cities in which it is located, as well as the other cities and stations along the route, which are connected via commuter rail. By monetizing the growth in real estate revenues and borrowing against the expected increment, cities are in prime positions to actively participate in station area redevelopment and to directly benefit from increased revenues to the city that can be used elsewhere.

Community Infrastructure Levy

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An alternate value capture tool is to charge developers an impact fee. In London, Mayor Boris Johnson enacted a Community Infrastructure Levy (CIL) to finance the £16 billion ($25.7 billion USD) Crossrail transportation project. Depending on a borough’s proximity to the project, every new development must pay between $20-$50 USD per square meter built. While other fees like business rate surcharges may apply, there are typically no other impact fees assessed other than the CIL.In the Northeast Corridor, specific concerns for implementing a CIL include determining specific impact rates for new development and the various CIL zones. Estimates for the total revenue from these impact fees for the Penn studio’s Phase 1 proposal range between $316.3 million to $9.5 billion. The CIL offers an example of a transit benefit fee for a geographical area extended well beyond station areas and could be replicated in the Northeast Corridor to help finance proposed corridor improvements and other transit infrastructure projects.

Penndesign 2012 studio report

Methodology The Northeast CIL calculation estimated the construction of additional commercial space in the central cities along the Northeast Corridor by 2040. Each city center’s 2012 commercial space supply was multiplied by three alternative assumptions regarding growth (“conservative”, “moderate,” and “best case”) to project the additional commercial space supply that could be captured by the impact fees or the CIL.

Two approaches were used to calculate potential CIL revenues for the Northeast. The first approach models the London Zone 1 fee, which is approximately $80 USD per square meter (approximately $8 per square foot). The second approach models the CIL as a density bonus, where developers would pay the CIL for additional floor-area ratio (FAR). This model assumes that each city’s FAR bonus was one-third. This is a conservative approach that takes into account the fact that several Central Business Districts in cities along the Northeast Corridor already have significant density bonuses, and, in fact, some may be overzoned for conditions. The effects of HSR on the demand for real estate could make higher FAR bonuses more feasible. These two approaches provided a range of potential money available to finance transportation investments in the Northeast from $330 million to $9.4 billion.

The CIL in London is assessed at varying rates across boroughs and is expected to generate significant revenues to fund Crossrail.iii

Existing station New station Surface line Tunnel Portal (tunnel entrance and exit)

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London’s Community Infrastructure Levy The Community Infrastructure Levy (CIL) is an example of a value capture scheme that has been implemented to help finance a wide range of infrastructure projects in England. These projects include ones for transportation, open space, stormwater management, education and health, and recreation. The CIL charges all new developments a certain fee per square foot of floor space based on an indexed charging schedule adopted by a local authority. Among the authorities allowed to charge the CIL are Districts, Unitaries, Metropolitan Councils, the London Boroughs, and the Mayor of London. Certain types of establishments such as affordable housing and charitable institutions are relieved from paying the CIL. Furthermore, a charging authority can vary rates by either geography or land use. CILs are not intended as a single source for the majority of projects; rather, they serve as “gap financing” to supplement other funding streams. It should also be noted that the viability of a CIL depends on the fee’s impact on the economic viability of development. CILs were originally intended to serve as general sources of funds for infrastructure and not tied to specific projects. Today, however, London is using the CIL as a way to raise funds for one of its most ambitious projects, Crossrail. In February 2012, Mayor Boris Johnson authorized a CIL to charge London’s 33 boroughs to finance a portion of the $25.7 billion Crossrail project. The line will create a new 118 km (73 miles) underground commuter rail corridor stretching across Greater London, dramatically expanding mass transport capacity while providing a major rail link across London, reducing travel times, and relieving congestion on the existing transport network. Construction began in 2009 and service is expected to begin in 2018.17 London’s CIL was formed using a three-tiered structure. Boroughs were separated into three zones by their distance from the future Crossrail service, each paying $80, $56, or $32 (USD) per square meter of new development. The Greater London Authority aims to raise $480 million annually with the CIL. Mayor Boris Johnson said after the CIL’s authorization that: “There is no underestimating how important Crossrail is to the future of this great city. Every corner of London will benefit once construction is complete and despite the current financial pressures, I am committed to ensuring London meets its fair share of the cost. It is right that the sector that will benefit so much should make its contribution and I am confident that this will not hinder development in the capital.

Business Rates Supplement

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The Northeast has always been an economic driver of the nation, and it will benefit from the introduction of HSR along the Corridor. The investment in HSR will benefit those traveling by other rail services within the Corridor and will also serve riders on the subsidiary rail lines of the Northeast, including the Downeaster, the improved New Haven-Hartford Springfield line, the Empire and Keystone services, and the route to Richmond, with enhanced connectivity choices. Just as residents should view transportation as a utility, so too should businesses. In London, nearly 10 percent of the £16 billion Crossrail project will be funded via a Business Rates Supplement (BRS). This levy charges businesses in Central London 2% on properties with a rateable value of more than £55,000.18 In this way, the project is

Penndesign 2012 studio report able to leverage the benefit that local businesses will have with increased connectivity and an estimated 10% increase in railbased transport capacity in the city; however, it will do so less to the detriment of small and fledgling businesses. A similar BRS could be implemented in the Northeast, whereby businesses of a threshold size in cities with stations are charged a small percentage of their property value. In this way, it is estimated that the BRS could raise in excess of $4 billion, and it represents an equitable charge in that the businesses that will benefit—both from higher connectivity and appreciated property values— contribute to the mechanism of these benefits. Therefore, BRS represents one way in which businesses, and not people, could contribute to the project.

Local Investments and Local Value

The station areas around HSR, as well as the larger cities, stand to benefit greatly from the introduction of HSR. Some of the increased wealth of these areas should be captured and invested in to the system itself. Value capture can be used in two complementary ways. The first is to generate monetizable revenues, which can contribute to the cost of the system being provided. The second is that, as with business improvement districts, the revenues can alternatively be used to enhance the development and quality of life improvements around stations – increasing the attractiveness for rail for intercity, commuter, and leisure trips. By capturing real estate tax increments and development impact fees, as well as requiring local residents to pay their fair share, HSR will be a balanced investment.

Potential Revenue Streams to Support HSR Operations

Amtrak’s passenger rail service in the Northeast Corridor is a positive revenue generator. Excess revenues are currently used within Amtrak to support its other operations across the region and the nation. The completion of the HSR network and modernization of the conventional rail corridor services will provide additional revenue streams. Specifically, as HSR ridership along the corridor grows with each phase of the project, significant passenger revenue can be generated. While much of the passenger fare revenue will be devoted to operations and maintenance costs, it nevertheless represents a stream of revenue for the project. In addition to fare revenue, passenger facility charges could also be a reliable funding source dedicated to maintaining stations.

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Penndesign 2012 studio report In 2009, ridership for the Northeast region was approximately 13 million. Todayâ&#x20AC;&#x2122;s ridership in the Northeast Corridor on all Amtrak services remains strong, representing 60% of the Boston-New York-Washington, DC air-rail market.19 The revenue model builds upon the ridership model, which are each discussed below. By using the projected HSR ridership along the corridor as input, the revenue model can incorporate fare pricing strategies, fare elasticities, passenger facility charges, and other sources of income.

Ridership Model

The construction of the two dedicated high-speed tracks will be coupled with other improvements over several phases. These upgrades and improvements increase the capacity of the entire system to allow it to accommodate for rising travel demand along the corridor. Services will improve incrementally, with the most significant changes coinciding with the introduction of the high-speed lines. Specifically, high-speed ridership is expected to steadily increase as services become operational. The estimated time savings and increased reliability of the high-speed network will reduce congestion on Northeast Regional, and local commuter services and allow for new hybrid express commuter services, Capacity then is freed up along the entire corridor as intercity passengers continue to increase in number and to take advantage of the HSR services. Riders on the high-speed intercity service were modeled from 2025 and onwards to reflect the major project milestones, which are projected to occur in 2025 with the first HSR operations of Phase 1 and in 2035 with full HSR operations between Washington, DC and Boston. The model projects high-speed ridership by estimating the impacts of HSR on ridership growth on current Northeast travel markets. By 2025, Phase I, which includes the high-speed early action project between New York and Philadelphia, is expected to have approximately 392,000 annual high-speed passengers. By 2035, when the entire HSR system from Boston to Washington, DC is completed and operating, the model projects total high-speed ridership equal to 15 million. By 2065, this annual estimate is expected to reach approximately 50 million.

Methodology

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The ridership model builds upon the model created by the 2011 Penn studio and adjusts for our studioâ&#x20AC;&#x2122;s proposed phasing of infrastructure upgrades and improvements. First, the existing

Penndesign 2012 studio report

Amtrak travel market is projected out to 2065 based on the Amtrak’s 2010 Northeast Corridor Infrastructure Master Plan. The master plan provided existing and projected ridership figures for 2010 and 2030, respectively and these figures were trended forward to 2065.20 After estimating the total Amtrak market in the Northeast, our model adopted the 2011 Penn studio’s projected ridership growth rates. The Penn 2011 studio created a project schedule and associated an annual ridership growth rate with each project phase.21

The 2012 model assumes comparable ridership growth rates would be observed given our similar phasing schedules. For instance, the Penn 2011 studio estimated a 4.9% annual ridership growth in 2020 when their proposed Phase 1 between New York and Philadelphia becomes operational. Our studio’s early action proposal, which includes the same segment and other improvements, becomes operational in 2025. Therefore, using Amtrak’s market as the baseline, the 4.9% annual ridership growth rate was adopted for 2025. This methodology was used to project ridership out to 2065. As the 2011 Penn studio calculated commuter and knowledge ridership into their ridership model, our model reflects these considerations.

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HSR ridership is expected to increase as services become operational

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Key Assumptions • Current Amtrak projected ridership figures for 2010 and 2030 were trended forward to 2065 • Penn 2011 Studio’s ridership growth rates were applied to these trended figures in accordance with the phasing plans of the 2012 Studio: - 2025 – 2029: 4.91% HSR annual ridership growth - 2030 – 2039: 9.82% HSR annual ridership growth - 2040 – 2044: 2.52% HSR annual ridership growth - 2045 – 2049: 2.62% HSR annual ridership growth - 2050 – 2065: 2.52% HSR annual ridership growth • The difference between the Amtrak’s projected ridership figures and 2012 Studio’s projected ridership was considered the number of HSR passengers per year. • Intercity travel between Amtrak’s top ten city pairs represents future HSR market • Future HSR passenger fares are 150% of current Acela fares • For every 3% increase in fare price, there is a 1% decrease in HSR ridership

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The methodology for estimating high-speed ridership uses these sets of ridership projections. The assumption is made that the difference between Amtrak’s projected ridership and the studio’s projected ridership represents HSR ridership. Amtrak’s ridership projections represent northeast ridership given today’s system. This year’s studio’s projected high-speed ridership represents ridership following HSR upgrades to the northeast system. The difference, therefore, is assumed to indicate HSR ridership along the Northeast corridor. Please refer to Appendix B-6 for the total HSR ridership.

Fare Revenue

Significant operating revenue can be generated from ticket fares collected along the express intercity high-speed service running between Boston and Washington, DC. The introduction of highspeed service along the Northeast Corridor not only alleviates demand on the existing system, but also leads to high-speed ridership and revenue growth as the market matures. The fare revenue model assumes that average HSR fares would be 150% of current advanced-booking fares on Acela and remain steady. Note that this is a revenue maximization strategy, and does not take into account the potential for reduced fare packages or multiple classes of service. New capacity in the NEC can make high-speed rail more accessible to all income brackets, but if Amtrak is forced to operate the line for maximum profit it can do so.

Methodology

The ridership model was expanded to include fare revenue estimates, recognizing that revenue projections are heavily dependent on the selected ridership estimates and fare pricing approach. Therefore, several of the model’s assumptions are outlined below.

The model assumes that current travel market shares along the Northeast Corridor, outlined by the Northeast Corridor Infrastructure Plan, hold true for the future. For instance, travel between New York to Washington, DC currently makes up 35.21% of the intercity travel between the top ten city pairs.22 This percentage is then used to extrapolate the expected highspeed ridership between these two cities. This methodology was subsequently repeated for other segments as they became operational under the phasing schedule.

Ticket prices are based on a percentage of existing Acela fares and subsequently used to generate operating revenue. 150% was selected to reflect the significant time savings and economic benefits that HSR provides.

Penndesign 2012 studio report The model further takes into consideration price elasticity, or passenger sensitivity to fare changes Studies show that for every 3% increase in price, a 1% decrease in ridership is expected.23 The sensitivity analysis in the model revealed that under the proposed price premium, ridership and operating revenue were maximized. Please refer to Appendix B-7 for the ridership and revenue breakdown of Northeast HSR travel segments.

Supplementary Revenue

User Fees & Passenger Revenue While fare revenue constitutes the majority of the passenger revenue stream, additional supplementary revenue sources have also been included in the model. These include passenger facility charges, advertising revenue, amenities revenue, and station retail and parking revenue. As high-speed service and improved conventional inter-city rail services are expected to carry millions of passengers between the Northeastâ&#x20AC;&#x2122;s major cities, passengers can contribute to the maintenance of stations.

Similar to airports, passenger facility charges are a dedicated revenue stream for maintaining stations. Ticket surcharges of $7.50 per passenger are assessed at the originating station. These ticket surcharges may be adopted during the early phases of the project to help fund construction and other related costs.

Advertising, amenities, and station retail and parking can also provide additional revenue streams for station upkeep. If the train operator has video and print media aboard trains and within stations, it can net $4.54 per passenger.24 If current food and beverage amenities are extended to and expanded on highspeed trains throughout the corridor, this will likely increase revenue from the current six percent to upwards of ten percent of ticket revenues.25 Station owners can reinvest retail rent revenue and parking income into the project. Similar to HS1 in London, these revenue streams are assumed to be five percent of annual ticket revenues. Rolling Stock Leaseback

In some European HSR systems, a private entity will purchase rolling stock and lease it to a public train operator. In exchange for the lease agreement, the private company can write off rolling stock depreciation and thus lower its tax burden. The public operator benefits by having access to rolling stock at a substantially discounted up-front cost. Based on the 2011 report, it is assumed that the typical annual lease rate was twelve percent of the original cost of the rolling stock. Mutually advantageous

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Penndesign 2012 studio report relationships like this create a Pareto improvement, and these agreements should be pursued to their maximal benefit wherever possible. Utilities Leasing Easements

The HSR network and its right-of-way along the Northeast Corridor provide a unique opportunity for utility companies to take advantage of long-distance, uninterrupted service paths. By leasing easements offered to electricity transmissions, natural gas and oil pipelines, fiber optic cables, and cell phone towers, among others, HSR can capitalize on its direct path to end-users. However, because many of these utilities are quite labor-intensive to install along the right-of-way, early planning is required, including during the Programmatic Environmental Impact process. Both the electricity transmission operators and the fiber optic cable company will enter in to long-term leases, at an adjusted rate of $30,000 per mile along the corridor. A natural gas provider can be expected to enter in to a twenty-year lease with a lump sum of $1.2 million per mile. Finally, it is expected that the corridor could accommodate 100 cell phone towers, each generating $100,000 per year. The fiscal impact of utility leasing easements should not be underestimated; once the entire project is complete, leases will provide nearly $40 million on average to help service general debt. As such, this provides a rare and mutually beneficial prospect which will both help accommodate future growth in the megaregion, and generate income for HSR. Revenue Streams from HSR

Through train tickets, passenger facility surcharges, food and beverages, future passengers traveling on the high-speed service can assist in covering operations and maintenance costs of the system. Train and station operators can also leverage the HSR market to generate additional revenue through station retail rents and parking income. Together, passenger revenues are expected to cover operating expenses and generate surplus income for additional capital improvements. The surplus income will be used to service bonds and loans taken out for the construction of the project. Opportunities to Leverage Federal Involvement & Funds

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HSR in the Northeast will be one of the largest and most expensive single infrastructure projects to date in the country. Although the megaregion can leverage its wealth to fund the project, it will need federal funds to make the project a reality. By demonstrating the U.S. governmentâ&#x20AC;&#x2122;s commitment, these funds will help attract both domestic and foreign private funds. Federal opportunities for involvement include use of TIFIA and RRIF loans, federal grants, and advocacy at the highest level. HSR will need more than just financial support from the national

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government; Washington will need to provide advocacy for the project in order to catalyze and maintain momentum. TIFIA

The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) established a federal credit program for transportation projects of regional and national significance. The credit program can provide subordinated direct loans, loan guarantees, and reserve lines of credit. TIFIA leverages other private and non-federal investment, and acts as an inexpensive source of capital. Loans are available for up to 35 years at a current rate of 3.18%.

As of 2012, the TIFIA program has provided a total of $8.9 billion of assistance with a total investment of $31 billion. If judged by demand, TIFIA has been a very successful program; each year, demand for TIFIA assistance is twelve times the availability of funds. In FY 2012, nearly $13 billion in credit assistance has been requested to finance approximately $36 billion in infrastructure investment.26 26 projects requested assistance, with an average request of $300 million, and the largest request of $1.1 billion.27

Based on these data and the significance of the project, HSR in the Northeast could compete for low-interest TIFIA loans to fund discrete pieces of its capital cost; however because TIFIA is highly demanded and has limited funds, it will only be one part of a larger financing strategy.

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Passenger services can generate revenue for further reinvestment into HSR.

Penndesign 2012 studio report RRIF Since 1998, the Federal Railroad Administration has been authorized to provide Railroad Rehabilitation and Improvement Financing (RRIF) in the form of direct loan and loan guarantees to state and local governments, freight shippers, government sponsored authorities and corporations, and joint ventures that include railroad projects. RRIF direct loans can fund up to 100% of projects, which seek to acquire, upgrade, and rehabilitate intermodal or railroad equipment and facilities, including track, components of track, bridges, and yards.28

The Federal Railroad Administration is authorized to provide assistance up to $35 billion to qualified projects. However, up to $7 billion of the authorized amount is reserved for Class II and III freight railroad projects. Loan terms are highly favorable, with repayment periods of up to 35 years and interest rates equal to the cost of government borrowing rates. Only two or three RRIF loan agreements are executed annually, with an average amount of approximately $55 million. RRIF has only occasionally provided large loans, with the largest given to Amtrak in 2011 for $563 million. In addition, the Dakota Minnesota & Eastern Railroad received $233 million in 2004, and the Denver Union Station Project Authority received $155 million in 2010.29 Because of the history of RRIF loan assistance and the scale of this project, HSR could expect to receive some assistance from the Federal Rail Administration in excess of $500 million. However, the FRA’s assistance guidelines, which include timing, NEPA requirements, and extensive due diligence, and substantial administrative fees and credit risk premiums, should be considered before assistance is requested. Grants

Federal grants provide the most desirable source of equity because they do not need to be repaid. Grant programs such as the Transportation Investment Generating Economic Recovery, or TIGER Discretionary Grant program, provide a unique opportunity for the USDOT to invest in road, rail, transit, and port projects that achieve national objectives. Transportation Secretary Ray LaHood describes TIGER projects as “innovative, 21st century projects that will change the U.S. transportation landscape by strengthening the economy and creating jobs, reducing gridlock and providing safe, affordable and environmentally sustainable transportation choices.”30

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Recently, the federal government has made significant grants to HSR projects. California has received approximately $3.3 billion in federal grants to begin construction of its HSR project; federal grants and loans account for approximately 60% of total project costs.31 The American Recovery and Reinvestment Act of 2009

Penndesign 2012 studio report (ARRA), the economic stimulus act which injected nearly $831 billion in to the US economy as a means to create immediate jobs and provide relief to programs and projects, provided nearly $105.3 billion in infrastructure and $48.1 billion in transportation, in the form of TIGER and other grants. National Value-Added Tax

A value-added tax (VAT) on purchases made in the United States is another option to consider. VAT is similar to a sales tax, but it is applied to each stage of the production of goods or services. It taxes the value added from each of these stages. The European Union charges a VAT in its member countries. China and India also use this system. In the United States, VAT has not yet been implemented at a national level, as states often decide to use the local sales tax option instead. Establishing a VAT may be one way to capture additional revenue, which could then be used to support transportation infrastructure projects.

Conclusion: Opportunities to Leverage Federal Involvement & Funds

HSR in the megaregion will increase the nation’s economic competitiveness. With precedents set for HSR-specific federal grants, it will be necessary for direct granting of federal funds to this project as well. By combining the local, state, and megaregional wealth, as well as national loan and loan guarantee programs, the amount of federal grants required will be minimized and needed only to commence construction of the project. In the future, looking to the possibility of a national VAT could provide further revenue for major infrastructure projects.

Strategies to Link Public and Private Investments National Infrastructure Bank

In February 2011 the President proposed the establishment of a National Infrastructure Bank (NIB) that would make apolitical investment decisions based on broader economic goals and investment merits. Since that time, three NIB bills have been proposed before the United States Congress. S.B. 652, the “Building and Upgrading Infrastructure for Long-Term Development Act,” has the largest bipartisan support. Senators John Kerry (D – Massachusetts), Kay Bailey Hutchison (R – Texas), Rebekah Warren (D – Michigan), and Lindsey Graham (R – South Carolina) introduced the bill on March 17, 2011. The legislation

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The Transbay Transit Center Project, which received a $171 million TIFIA loan, will replace the Transbay Terminal with a new multimodal transportation center and centralize nine regional transportation systems at one location.iv

Penndesign 2012 studio report would establish the American Infrastructure Financing Authority (AIFA), a wholly owned government corporation with the power to issue direct loans and loan guarantees to private individuals, corporations, partnerships, or nonfederal governments in the transportation, water, and energy sectors.

The goals of AIFA would be to: (1) increase total investment in infrastructure by encouraging new investment from nonfederal sources, (2) rationalize project selection by insulating decisions from political influence, and (3) encourage new investment with relatively little effect on the federal budget through a selfsustaining, revolving fund entity. As with traditional commercial banks, NIB borrowers would be expected to repay their loans with interest, and may incur other fees associated with the bank’s credit instruments. Unlike a commercial bank, the Infrastructure Bank does not take deposits and does not conduct over-thecounter transactions. Capitalized with $10 billion per annum in the first two years, AIFA would act as revolving loan fund to issue direct loans and loan guarantees not to exceed $10 billion in FY 1 and 2 annually, $20 billion in FY 3 through 9 annually, and $50 billion each year thereafter. In total it is estimated that AIFA loans would be able to leverage at least $600 billion in total investment.

Infrastructure banks have been established and widely used throughout the world; notable among these is the European Infrastructure Bank (EIB). Founded in 1957, the EIB is owned by the 27 member states of the European Union and issues in excess of $65 billion in infrastructure investment annually.32 The EIB invests only in large projects, including €5 billion ($6.6 billion) to Spain’s ADIF—a state infrastructure administration that oversees RENFE HSR—in 2009 alone.33 S.B. 652 explicitly lists HSR as a potential recipient of Infrastructure Bank investment. Because of HSR’s capacity to generate revenue, the NE HSR could receive funding which would act as a flagship investment for the nascent bank. AIFA loans would extend over a 35-year period, and rates would be set at a minimum of the yield on United States Treasury obligations of similar maturities.34 Two other proposals, the American Infrastructure Investment Fund Act of 2011 (S.B. 936), and the National Infrastructure Development Act of 2011 (H.R. 402) have also been introduced before the 112th Congress.35 Bipartisan support for the National Infrastructure Bank, its apolitical structure, and its ability to leverage private investment at a ratio of up to 1:50, make the program a potentially potent tool for funding large-scale infrastructure projects. Among these needs is HSR in the Northeast.

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State and Megaregional Infrastructure Banks Infrastructure banks have been used widely throughout the western world as a means to provide low-cost debt to largescale infrastructure projects. Infrastructure banks are financial institutions that are capitalized by public funds and provide loans and loan guarantees to governments, quasi-public organizations, and private entities on the basis of public good and financial merits. The banks act as revolving loan funds, which reinvest received debt payments. These banks have been widely successful in that they offer very competitive rates, and they leverage public dollars.

Established under the surface transportation act SAFETEA-LU (2005), the State Infrastructure Bank (SIB) program authorized each state to establish infrastructure revolving loan funds, which are eligible to be capitalized with federal transportation funds.36 32 states, including Delaware, New York, Pennsylvania, and Rhode Island, created SIBs. Some are “leveraged SIBs” in which the institution has the authority to use their initial capital as security for issuing bonds to raise further capital as a source of loans.

Both these State Infrastructure Banks, as well as a Northeast Regional Infrastructure Bank (NEIB, discussed in the next chapter), could provide more state- and regional-level investment in HSR, as well as in the fields of transportation (non-HSR), water, and energy. The NEIB will be a valuable tool to address regional equity and provide the states with an apolitical, predictable source of infrastructure funds. The NEIB could be established by blending the existing SIBs and the new tax income not dedicated to HSR under the scenarios described above, or the SIBs could remain intact for the respective individual states’ internal uses, and the NEIB could be capitalized completely from scratch.

By coordinating these funds, and pooling internal regional wealth, it is possible to maximize the amount of direct investment in the region. Moreover, the concept of a National Infrastructure Bank has been extensively explored by Professor Michael Likosky at the Institute for Public Knowledge, and is being advanced in pending Congressional legislation. The role of a National Infrastructure Bank in providing support for HSR is explored in more detail above.

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Participation of Private Sector While multiple funding sources have been identified at the regional and local levels to construct and maintain HSR, there are opportunities for private involvement. As the high-speed service becomes operational and ridership is demonstrated, project risk will be reduced significantly. This allows the project owner to monetize the asset, leverage private capital to recoup initial investments, and establish partnerships.

Operation and maintenance of the railroad from Boston to Washington, DC could be privatized under a service concession agreement. The agreement would specify that the track owner lease the right-of-way to private train operators in return for annual concession payments. This revenue collected by the track owner can be reinvested into maintaining a state of good repair, or into expanding the network. A similar approach could apply to HSR stations. Private operators pay the station owners upfront revenue for the opportunity to operate stations. In return, private operators would be entitled to retail rents, parking fees, and other associated user fees. Private entities such as pension and sovereign wealth funds emerge as potential parties in such agreements. HSR operators and the airline industry represent a type of partnership in the United States that can be further explored in the future. As airlines reexamine their service provisions to better serve the Northeast traveling public, integrating air with rail services may be advantageous. An airline or airline alliance could contract or run their own train service along the high-speed alignment.

Private Funds

Pension and sovereign wealth funds have a lot to offer, as they are â&#x20AC;&#x153;patientâ&#x20AC;? investors with large amounts of capital and liquidity.

Pension Funds

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Pension funds could become key partners in leveraging private capital. Recognizing that HSR will generate revenue through fares and supplementary income, fundsâ&#x20AC;&#x2122; trustees may choose to enter concessionary agreements with HSR owners. Pension funds have already entered into concession agreements with high-speed projects: in 2010 the UK government arranged a concession with two Canadian pension funds for High-Speed 1 (HS1). The agreement provided the pension funds the authority to operate HS1 for 30 years, after which operations will transfer back to the

Penndesign 2012 studio report UK government. Since the agreement, the UK government has been able to recoup roughly 40% of the final project cost and the government expects to earn additional revenue through the use of future concession agreements.37

Sovereign Wealth Funds

A sovereign wealth fund is a state-owned investment fund or entity that is commonly established from balance-of-payment surpluses, government transfer payments, fiscal surpluses, privatization proceeds, official foreign currency operations, and/ or resource exports.38 Sovereign wealth funds have recently emerged as major investors in infrastructure projects around the world; HSR could join the list of investments. As ridership and passenger revenue is demonstrated along the corridor, sovereign wealth funds could invest in the extension, upkeep, or ownership of the HSR network for returns.

Britain’s Thames Water Infrastructure System In early 2012, the China Investment Corporation made its first direct investment in Britain’s Thames Water infrastructure system through a £600 – £700 million holding purchase. The deal injected new capital into the company to renew parts of the aging Victorian water and sewage system. 39

Thames Water undertakes construction to alleviate flooding in Haydon-Wick.v

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Penndesign 2012 studio report Lufthansa operates a train from Frankfurt to Cologne.vi

Airlines The airline industry may build on existing rail partnerships with HSR operators in the future. Currently, Amtrak provides connecting service on Northeast Regional trains between several Northeast cities and United Airlinesâ&#x20AC;&#x2122;s hub at Newark-Liberty International Airport. This partnership allows integrated airrail trips.40 Recognizing the long-term inefficiencies of providing regional jet-based air service within the Northeast, airlines may choose to integrate additional services with the corridorâ&#x20AC;&#x2122;s HSR network. Airlines can partner with HSR operators to substitute these short distance shuttle services, which are often better served by rail, with rail service through a codeshare or a full operations agreement.

The Air and rail connection Similar air and rail partnerships have been forged in other countries. One model, the Lufthansa AIRail between Cologne and Frankfurt, serves as an example of an airline that has replaced shorthaul routes with rail service. Integration between air and rail service includes coordinated baggage handling, ticketing, and branding.41

Airlines in the Northeast that adopt such business plans will be able to eliminate the loss-leading short-haul flights that today they must run at high frequencies to serve their hubs. This will require rail link enhancements to some of the Northeastâ&#x20AC;&#x2122;s major airports, including John F. Kennedy Airport, Newark-Liberty International Airport, and Philadelphia International Airport.

Bringing It All Together

This report presents three separate financing approaches, which have the potential to fund the construction, operation, and maintenance of HSR in the Northeast. As mentioned above, these scenarios are not prescriptive, but rather represent combinations of the various sources, which can be arranged and rearranged based on the local, megaregional, and national economic, political, and fiscal climates. In addition, many assumptions are points along a continuum, illustrative of what is possible but not necessarily what should be. Some financing techniques must be explored further before they can be fully monetized. However, the mix-and match approach represents an important continuation of the dialogue on how to implement HSR, and how to make it financially profitable.

Conservative Case

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This scenario assumes the minimal amount of gas and sales tax increases in the region alone. As such, the bonded amounts of these taxes represent only approximately 16.5% of total sources. Because the regional taxes are less valuable, the federal government must play a larger role in financing the project. A clever combination of federal grant infusions (39% of project sources), and federal loans (41% of project sources), account for 80% of total project sources, while value capture techniques

Penndesign 2012 studio report (bonded TIF and CIL proceeds) cover the remaining 3.5%. All of the TIFIA, RRIF, and National Infrastructure Bank loans will be fully repaid from user fees. Because of the increased amount of borrowing in this scenario, total project sources are approximately $154 billion. The net present value (NPV) of the project from 2016 through 2065 at the social discount rate of 3% is approximately $9.2 billion.

Phase 1 relies more heavily on public grants and tax bond proceeds because ridership and other revenues are insufficient during this phase to cover construction, environmental mitigation, operating and maintenance costs. However, by 2032 with the addition of Phase 2 from Washington, DC to Philadelphia complete, the total revenue is greater than the total operating and maintenance costs. By 2040, the project has a positive unlevered cash flow. By 2065, the project has a total annual revenue of nearly $13 billion available to service debt; by that year the net cash flow of the project is approximately $2.3 billion. This scenario is more conventional in that the federal government is heavily involved in the financing of HSR, while the megaregion is less able to contribute to the project via bonded tax increases.

Moderate Case

This scenario assumes that there is a moderate amount of gas and sales tax increases in the region and the nation, which can be bonded to contribute approximately 47% of total project sources. Because there is a greater amount of megaregional investment in the project, only 9.5% of the total sources are federal grants, while federal loan programs comprise 38.5%; all of these loans will be fully repaid from user fees. Moreover, local value capture techniques account for 5% of total sources. Because less project debt must be issued and repaid, total project sources are approximately $132 billion. The project NPV at 3% is $20.9 billion. The bonded tax proceeds, in addition to the bonded value capture proceeds more than cover the construction costs of Phase 1. The remaining proceeds (approximately 40% of total bond proceeds) can be rolled in to the second and third phases of construction; or the bonds can be resized and staggered to be issued as needed. Under this scenario, no new debt or grants are infused beyond 2039, as the unlevered cash flow and cash reserves are enough to cover operating and maintenance, and project debt service. This scenario assumes that the megaregion and the federal government essentially split the total project sources, however only 9.5% of the total project cost is in the form of direct federal grants; all federal loans will be repaid in full based on competitive rates and terms. Therefore, the moderate case demonstrates that

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Penndesign 2012 studio report the megaregion can leverage internal wealth to complete the project, while the federal government will still be involved as HSR in the Northeast represents a significant national asset.

Best Case

This scenario assumes that there is an aggressive amount of gas and sales tax increases in both the megaregion and the nation. The bonded tax proceeds comprise approximately 75% of total project sources. Importantly, federal grants are negligible (0.00021%), and are used in 2016 in order to catalyze utility easements. Federal loans total 17.5% of total project sources, and will be fully repaid with user fees. Value capture techniques cover the remaining 7.5%. Because project debt is minimal, total project sources are approximately $128 billion. The project NPV at 3% is $26.3 billion. The bonded gas and sales tax proceeds cover in excess of Phase 1 construction costs; 60% of the tax and value capture proceeds remain after phase 1 is complete. The remaining proceeds can be used to continue Phases 2 and 3, while small amounts of debt are issued in 2034, 2036, and 2039. The net cash flow of the project is $2.6 billion per year by 2065. This scenario assumes that the megaregion pays for the majority of the project through bonded tax proceeds, which will be repaid via gas and sales tax increases. In addition, the federal government must grant very little funds, while its loans will be repaid in full. The best case demonstrates that it is possible for local pooled wealth to implement HSR if an aggressive taxing scheme is enacted. While the Northeast will benefit most strongly from HSR, it will also be a valuable national asset; therefore, the federal government perhaps should be more invested in the project than as represented here. However, this demonstrates that the megaregion can rely heavily upon itself to complete the project, so long as the political and fiscal energies are more fully aligned behind, and in support of, infrastructure and transportation investment.

Financial Model Assumptions

The creation of the three financial model cases used several assumptions. All revenue assumptions were the same for all three cases. This yearâ&#x20AC;&#x2122;s studio did not seek to replicate revenue and cost estimates from previous yearsâ&#x20AC;&#x2122; work. Instead, where appropriate, the studio team referenced that work and built off of

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Penndesign 2012 studio report it. Please reference the following sections of the Appendix of this report for more information on the assumptions used. For overall assumptions related to the financial models, please see B-8 of the Appendix. For assumptions related to the best case, moderate, and conservative financing models, please see B-9, B-10, and B-11 respectively of the Appendix.

Conclusion

HSR in the Northeast Corridor will be an economic and social game-changer both for the megaregion and for the nation. It will become the single greatest infrastructure investment of the early 21st century, and it will be a valuable asset that will keep the Northeast’s economic engine running for decades to come.

However, the Northeast will need more than just HSR to maintain its competitive edge. Creating the opportunities for substantial investment in other infrastructure projects through use of innovative funding and financing techniques can ensure that investment is spread equitably throughout the region and that other, non-HSR improvements can still be funded. It is through this interlinked and balanced approach that the Northeast will maximize its quality of life, business environment, and transportation options and will continue to thrive.

Using the premise that transportation is a utility for which its tusers and beneficiaries pay, this section has presented multiple options to assemble resources from value capture, fees, grants, and loans to catalyze the project. Central to this is the notion that, if necessary, the federal government can be relied on less heavily and that internal wealth must be pooled and leveraged to the fullest extent possible. As HSR transitions from plan to reality, it will be necessary to combine these local, regional, and national strategies to create the most efficient and lucrative financing possible. We are up to the task. Creating visionary megaprojects such as HSR is neither easy nor cheap, but they are necessary. Although the current political climate generates a reluctance to begin long-term, expensive projects—increasing local, state, and regional taxes are often described as “political third rails”—the real risk is in failing to make these investments. Although financing is half the battle, the overseeing HSR entity needs the proper institutional design, and compelling messaging in order to create and maintain momentum behind the project. HSR will be a profitable investment in the Northeast; it is time for the project to begin.

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City Hall, Philadelphiaix

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Institutional Design The 2011 Penn Northeast HSR studio proposed that a singlepurpose public benefit corporation (PBC) be established to oversee the financing, design, construction, and management of the Northeast Corridor, including HSR. The structure of this PBC stemmed from the studio team’s research on institutional models from around the world, and meetings with HSR managers in Germany, Belgium, England, France and Spain. Under the studio’s proposal, the PBC, which the studio called the Northeast Corridor Systems Authority (NECSA), would be charged with financing, designing, building and managing HSR and a modernized commuter and inter-city rail infrastructure in the Northeast Corridor. NECSA would function as an independent, politically autonomous, transparent, and directed organization that could advance this large project in ways that existing institutions could not. In today’s politically-charged environment, where prominent members of the U.S. House of Representatives publically deride Amtrak as a fiscal “black hole,” this clean slate approach was seen by the studio as having real merit.1 There remain, however, strong structural and political arguments for keeping the Northeast Corridor’s future under Amtrak’s control. Amtrak was given a unique set of powers by the Congress, among them eminent domain authority, the right to operate trains on privately owned rail rights of way and the ability to hire staff and procure services in an efficient way, which would be difficult to replicate today. And following the release of the 2011 Penn studio report, Amtrak demonstrated its commitment to transforming the Northeast Corridor by establishing a special Northeast Corridor Infrastructure and Investment Development Division to administer this project.

Amtrak’s new division has a core team of highly skilled engineers, planners and project managers with the experience and expertise to make this project a reality. In order to carry ou this project, it must also have the fiscal autonomy and additional financial resources needed to gain the support of the Congress, the states, private investors, and the public.

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Amtrak currently operates Acela, a higher speed train service that operates only in the Northeast.i

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Amtrak must engage with many stakeholders to plan for and implement HSR in the Northeast Corridor.

General Public

But Amtrakâ&#x20AC;&#x2122;s new Northeast Division cannot implement this massive project by itself. Without support from a variety of stakeholders, from state and local government to businesses to ordinary people, no large publicly funded project can succeed. In 2008, Congress established the Northeast Corridor Infrastructure and Operations Advisory Commission to create a forum for all of these stakeholders in shaping plans for redevelopment of the NEC. Involving the Northeast megaregionâ&#x20AC;&#x2122;s state and local governments will help extend the benefits of HSR to cities across the megaregion. Engaging this leadership in support of HSR will encourage cities and states to work together to expedite the transformation of the NEC and to take other actions required to fully realize its economic potential. Reaching out to private sector stakeholders can foster support from businesses and private industry leaders, further strengthening the case for HSR. Establishing this integrated support base is critical for the successful development and implementation of HSR in the Northeast Corridor. The Business Alliance for Northeast Mobility, and its 55 business members between Boston and Washington, DC, can also play an important role in mobilizing this business and public support, as described further below. The studio investigated the institutions and processes being used to develop other HSR projects both across the United States and in the United Kingdom to inform the proposed institutional design. FRA

Intercity Passengers

Federal Government

Commuter Passengers

State Governments

City Governments

Construction Companies Freight Operators

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MPOs Passenger Rail Operators

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Lessons from London: HS2 In early January 2012, in the midst of the UK’s largest government austerity program in a generation, Secretary for Transport, Justine Greening, announced that the country should move ahead with its “High Speed 2” (HS2) project to provide “direct, high capacity, high speed links between London, Birmingham, Leeds and Manchester, with intermediate stations in the East Midlands and South Yorkshire.”2 This decision was based on research by HS2 Ltd, which the Department for Transport (DfT) formed in 2009 as an advisory body for the project. In her decision, Secretary Greening concluded that HS2 Ltd would continue the work of the project.

HS2 Ltd is a corporation that is wholly owned by the DfT, classified as a “Non-Departmental Public Body” (NDPB). Under this designation, the DfT reviews HS2 Ltd’s accounts, which Parliament ultimately approves. Secretary Greening also appointed a non-executive chair, a position currently held by Sir Brian Briscoe, to lead a board of appointed officials. Briscoe brings to this role an extensive planning background, including work in both local and national governments and private consultancy. Members of HS2’s board include the chairman of an economic infrastructure fund, an engineer, a DfT representative, a former director of finance at the Government Olympic Executive, a unit within the United Kingdom Department for Culture, Media and Sport, and the CFO of the UK’s tax department. A Chief Executive runs the business side of HS2 and advises both the Board and the Secretary of State. 3 Alison Munro, a former director of DfT, currently serves as the Chief Executive. Although HS2 Ltd began as an advisory body, it has since evolved into the organization in charge of developing and promoting this

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Rendering of the new high-speed rail which will connect London and the Midlands.ii

HS2 is a corportation owned by the UK’s Department for Transport to create high speed rail between London and the Midlands.iii

Penndesign 2012 studio report project, which will extend high-speed rail service from London to the North of England. HS2 Ltd is currently focused on developing and promoting Phase 1, which will run between London and Birmingham.4 To meet its goal, HS2 Ltd has gathered the expertise necessary to complete the project; they have appointed a group of contractors for Phase 1, including global engineering and planning firm CH2M Hill, as the delivery partner.5 Finally, the DfT has tasked HS2 Ltd with designing the necessary legislation to allow it to design the railway and acquire the powers to operate it. The HS2 legislation, which Briscoe hopes to deliver by 2013, will increase HS2 Ltd’s powers significantly. It is a type of bill called a “hybrid bill” – one formed from both public and private interests.6 The bill will include the design of the line and its stations as well as the project’s construction methods and mitigation measures. In addition, it describes the project’s environmental impact assessment and scale of work. Finally, pursuant to Secretary Greening’s instructions, the bill gives HS2 Ltd several significant powers, including the power to acquire and lease land without the owner’s consent, the power to close roads, and the power to operate the line.7

Essentially, the story of HS2 Ltd is one of the centralization of expertise. Its close relationship with both the government and a set of experts in its initial role as an advisory body, and now as contributor to drafting legislation, makes it well suited to expertly design a public project. All the entity’s final proposals must be approved by Parliament and the DfT, but the experts housed under the NDPB are able to work apolitically to make their recommendations.

California’s High-Speed Rail Authority

The California High-Speed Rail Act of 1996 established the California High-Speed Rail Authority (CHSRA), a new, independent authority responsible for developing and building an intercity high-speed train service between San Francisco and Los Angeles/Anaheim via the Central Valley, with future extensions to Sacramento and San Diego.8 While the authority was originally organized to expire in 2003, a later act, the Safe, Reliable HighSpeed Passenger Train Bond Act for the 21st Century, made CHSRA a permanent entity, ensuring its continued efforts to bring HSR to California.9

Under this later act, CHSRA has the authority to perform the following functions:

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Penndesign 2012 studio report • Enter into contracts with private or public entities for the design, construction and operation of high-speed trains.

• Acquire rights-of-way through purchase or eminent domain.

• Issue debt, secured by pledges of state funds, federal grants, or project revenues. • Enter into cooperative or joint development agreements with local governments or private entities. • Set fares and schedules.

• Relocate highways and utilities.10

No other single organization in the State of California, including CalTrans, the state’s department of transportation, has all of these powers. The powers to acquire right-of-way through eminent domain and realign the public right-of-way allow CHSRA to be a strong presence in the campaign for HSR. Having an entity with the authority to make and directly implement its decisions will allow California to continue its HSR implementation program amidst political tumult. CHSRA’s proposal to develop an initial operating segment in the Central Valley far from the state’s major population centers was widely criticized. In response, in 2012, Governor Jerry Brown installed new leadership at the CHSRA, and directed them to develop a new lower cost proposal for “blended” rail services in the San Francisco Bay Area and Los Angeles regions. But despite calls from legislators and others for eliminating the Authority, the Governor decided to support its retention, given its unique powers to deliver the project. Recognizing the importance of both public and private involvement and the roles these institutions can play, CHSRA’s recently-released draft business plan indicates the primary roles of public and private sector stakeholders and notes that these roles serve as the foundation of its business

Rendering of California’s proposed high-speed rail.v

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The California High-Speed Rail Authority is tasked with developing and constructing high-speed rail between San Francisco and Los Angeles.iv

Penndesign 2012 studio report CHSRA’s newest business plan details potential roles that public sector and private stakeholders may play in the establishment of HSR in California.x

model.11 While these roles go beyond the umbrella of qualities needed for an operating HSR entity, they demonstrate how different players in the HSR development and operations process can contribute to the project.

Austin-San Antonio’s Lone Star Rail District

In 1997, the 77th Texas State Legislature authorized the development of an independent public agency focused on delivering regional passenger rail service to the Austin-San Antonio corridor.12 In December 2002, the cities of Austin and San Antonio, along with Travis and Bexar counties, approved the agency’s establishment. By 2003, these cities and counties, along with their local VIA and Capital Metro transit authorities, held the first meeting of the “Austin-San Antonio Intermunicipal Commuter Rail District.” In 2009, the district became known as the “Lone Star Rail District” (Rail District).

Under its enabling legislation, the Rail District is a special district and a political subdivision of the State.13 Today, its members include cities and counties, transit authorities and metropolitan planning organizations, and even members of the public appointed by the Texas Transportation Commission.14 These stakeholders work together to plan and develop rail passenger service and freight rail improvements in the region.

The Rail District intends to provide 90-minute express service from Austin to San Antonio with stops in San Marcos and New Braunfels.15 However, it does not plan to provide truly high-speed service between these areas. While the Rail District does not focus solely on HSR, it demonstrates how action can be taken on the local and state levels and how governments, municipalities, and transportation agencies can work together to execute a common goal.

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The Rail District is making progress. In 2010, it signed a memorandum of understanding (MOU) with Union Pacific to prepare a feasibility study on the relocation of freight service to allow for more capacity for passenger rail service.16 In April 2011, the Rail District signed a MOU with the Regional Transportation Council of the North Central Texas Council of Governments and the Rail District to “develop plans for passenger and freight rail transportation improvements in the Dallas, Fort Worth, Austin, and San Antonio region and to serve as a coordinator for planning efforts by governmental and private entities within this region.”17 With these coordinated efforts and agency collaboration, the Rail District is well on its way to bringing passenger rail service to Central and South Texas.

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Lessons Learned The organizations profiled above demonstrate different ways of structuring entities to support rail expansion operations. HS2 shows how institutional leadership combined with consulting expertise continues Britain’s efforts to expand its HSR network. CHSRA’s powers and permanence provide it with the authority necessary to bring HSR to California. In Texas, the Rail District, while working on only a single city pair, illustrates how regions of all sizes recognize the importance of investing in rail infrastructure and providing more transportation opportunities for travelers. For the Northeast Corridor, supporting Amtrak’s new business division can provide the leadership and direction needed for HSR implementation.

Current Context of the Northeast Corridor

Though by law Amtrak can operate independently of the states in which it operates, delivering HSR in the Northeast Corridor will likely require collaboration from the corridor’s many stakeholders. The NEC serves eight states and the District of Columbia, each with their own transportation agencies and elected officials. The rail corridor itself includes four owners, eight passenger railroads, and numerous freight operators, all of whom may have different visions of the future of the Corridor. As the owner of most of the rail corridor and as the operator of inter-city rail services in the corridor, Amtrak has the leading position in determining the corridor’s future direction. In partnership with other government and business stakeholders, Amtrak can play a leading role in planning and implementing plans for Northeast HSR.

Building Support from the Business Community

Business support will be essential to building Northeast HSR For this reason, in 2007, the Regional Plan Association convened and now staffs The Business Alliance for Northeast Mobility (BANM), a coalition comprised of 55 businesses and civic and planning groups. RPA is a 90-year non-profit organization focused on urban research and advocacy, and a longtime advocate for regional planning in the Northeast and across the United States. The goal of BANM is to build business and public support for actions needed to improve the Northeast’s transportation

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The NEC includes four owners as well as a variety of interested parties in the form of freight and commuter railroads and the NEC Commission.

systems, and in particular, the Northeast Rail Corridor. Specifically, BANM has four policy objectives:

• Maximize funding for improvements to passenger rail infrastructure and operations in the Northeast Megaregion. • Increase funding for a national high-speed rail program.

• Ensure that the multi-state planning and environmental review process in the Northeast Corridor considers several “true” HSR alternatives. • Work with the Northeast Corridor Commission and the FRA to craft the long-term vision for the Northeast Corridor.18

The BANM is an organization that enables northeast mobility through building business and public support.vi

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In working toward these goals, BANM has advocated successfully for the passage of three important pieces of legislation, forging important institutional relationships in the process. The first such victory was PRIIA, which authorized $13 billion for Amtrak and created the High-Speed Intercity Passenger Rail Program. The second was legislation to secure annual appropriations for passenger rail through Amtrak and the FRA. The third was getting the Northeast Corridor federally designated as a High Speed Rail Corridor in 2011. BANM’s efforts in pushing these bills included events with members of Congress and providing testimony in the U.S. House of Representatives. BANM’s core group is a network of regional chambers of commerce and business organizations, representing the business leadership of the Northeast’s major metropolitan regions. The Business Alliance is now working to broaden and deepen its membership, by adding individual businesses representing the Northeast’s architectural and engineering firms, major employers

Penndesign 2012 studio report and downtown real estate interests, all of which have a direct interest in the success of the Alliance’s campaign to promote rebuilding of the NEC. Expanding the Alliance’s membership will be crucial to its success, since this would increase the organization’s political clout and add to its ability to generate public support for the project. As the messaging chapter of this report details, getting the “buy-in” from the business community will be essential to achieving HSR in the Northeast Corridor.

Coordinating Federal Leadership

Giving Amtrak’s new Northeast Corridor Infrastructure and Investment Development Division the funding and authority it would require to plan and operate HSR in the Northeast Corridor would require action by Congress and support from both the United States Department of Transportation (USDOT) and the Federal Railroad Administration (FRA). This authorization could be included in the reauthorization of the Passenger Rail Investment and Improvement Act (PRIIA), which expires in 2013 or into the reauthorization of the Surface Transportation Act, also expected to be completed next year. This act could also contain provisions allowing for the establishment of a regional infrastructure bank in the Northeast megaregion and a complementary competitive grant program for cities looking to capitalize on the economic opportunities created by HSR.

A Focused Institution for the Northeast The 2011 Penn HSR report called for the creation of a publicbenefit corporation with the authority, credibility and skills needed to build Northeast HSR as part of a modernized NEC rail system. It outlined the powers that this new entity would require: • Engage in partnerships for co-investment • Generate revenue

• Capitalize its assets and reinvest profits

• Issue bonds and borrow from both public and private sources • Manage planning, design, approvals, and the EIS [Environmental Impact Statement] • Acquire and assemble land • Manage public relations

• Oversee infrastructure construction and management

• Act as underlying owner of infrastructure and stations19

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Penndesign 2012 studio report Following the completion of the Penn 2011 HSR Report in May, 2011, Amtrak established a new Northeast Corridor Infrastructure and Investment Development Division with all of these powers and capabilities. To gain the support of Congress and the confidence of private investors, Amtrak’s new NE Division will need to ensure that all NEC-related funds, including profits from the line and taxes raised from the states for high-speed rail, flow directly into the Division. The organization can then pool the funds and, if necessary, seek gap financing from the federal government or private sources.

The 2011 studio team proposed an independent public benefit corporation, the “Northeast Corridor System Authority” to build Northeast HSR.

Amtrak continues to face significant political challenges in the Congress. Many key members of Congress have and will continue to refuse any new funding for Amtrak, worrying that the money will be lost in Amtrak’s bureaucracy or in cross-subsidies to unprofitable rail services. Providing its new Northeast Division with a measure of independence and with a financial “firewall” could help overcome some of these concerns. In the event that the Congress would still oppose providing funds or authority to Amtrak’s new Northeast Division, a new independent Northeast Rail Authority could be established for this purpose, as was proposed in the 2011 Penn HSR Report.

Northeast Corridor Infrastructure and Operations Advisory Commission In September 2010, the Northeast Corridor Infrastructure and Operations Advisory Commission (Northeast Corridor Commission, or NECC, for short), an entity originally authorized under PRIIA, held its first meeting. The event underscored the federal government and Northeast Corridor states’ understanding of the need for a new megaregion-scale partnership and brought together representatives from Connecticut, the District of Columbia, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, and Rhode Island, along with Amtrak and senior USDOT officials.20

According to PRIIA, the NECC is tasked “to promote mutual cooperation and planning pertaining to the rail operations and related activities of the Northeast Corridor.”21 To achieve these goals, the Act requires NECC to develop recommendations related to planning for short-term and long-term capital investment needs, future funding requirements, and operational improvements.22

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The NECC has established committees to address the requirements of PRIIA. There are five committees that focus on different elements, including multi-state planning/Tier I

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Environmental Impact Statement; infrastructure and operations; freight; communications and outreach; and cost allocation.23 At this stage, the NECC mainly works to build consensus for rail projects in the Northeast Corridor and develop a rational trackage fee system. NECC’s focus remains on developing ways to build consensus and financial support. One of the NECC’s goals is to bring state players together to go after money collectively.24 This allows for a spirit of collaboration to be integrated into the funding process and for a broader consensus to be achieved about how funding is distributed.25

Amtrak’s new NE Divison will need to actively work with Amtrak, the NEC Commision, and the Private Sector in order to operate successfully.

INSTITUTIONAL DESIGN & ENVIRONMENTAL REVIEW Environmental Review Process

For HSR to be implemented in the Northeast Corridor, the project must undergo a rigorous environmental review process, which has recently been initiated by the Federal Railroad Administration. This environmental review process involves a Tier-I environmental impact statement, or Programmatic EIS (P-EIS), which analyzes a program on a broad scale for its environmental feasibility. For HSR, this includes the purpose, need, scope, and general concepts and concerns of project. From this, a list of alternative alignments will be formulated and then examined.26

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The NECC is a commission which enables cooperative rail operations planning within the Northeast Corridor.vii

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RECENT DEVELOPMENTS: EXPEDITED ENVIRONMENTAL REVIEWS Recent developments at the federal level have reinvigorated state and local governments to expedite the environmental review process for transportation projects. In January 2012, the White House Council on Environmental Quality (CEQ) and the US Department of Transportation (USDOT) announced a pilot project geared towards expediting environmental reviews for HSR in the Northeast Corridor. The CEQ and DOT aimed to engage federal, state, and local governments and the public in the early stages of the process in order to save time, reduce costs, and avoid conflicts.27 These goals are manifestations of President Barack Obama’s desire to speed up infrastructure development through more efficient and effective permitting and review.28 With support at the federal level, the environmental review process for HSR in the northeast is beginning to take shape. In February 2012, the Federal Railroad Administration (FRA), the lead agency, selected consultants to assist in the FRA-led Tier I environmental process. Current estimates place the Tier-I EIS for HSR in the Northeast Corridor at approximately 36 months.

Clear and Incisive Alternatives The P-EIS will define the direction and upper boundaries of passenger rail upgrades and improvements for many years. More specifically, the programmatic environmental impact assessment includes a statement of purpose, analysis of alternatives, development of preferred alternatives, and evaluation of corridor-wide environmental impacts and public outreach.29

Amtrak’s 1978 P-EIS for the Northeast Corridor Improvement Program remains the primary guiding document used in making major rail planning decisions. The document outlines the corridor’s environmental planning constraints, and ultimately sets forth the parameters to which all future projects much adhere.30 Therefore, the P- EIS becomes a document that not only takes into account existing Corridor conditions, but also one that incorporates (and potentially, limits) future considerations. FRA has indicated that it should also be possible to initiate action on a set of early action projects prior to completion of the new P-EIS, on segments of the Corridor that are already subject to completed environmental reviews. These could include such elements as the proposed two-track Gateway tunnel under the Hudson River into Penn Station in Manhattan, key swing and lift bridges that are now bottlenecks in the corridor, station area improvements and other investments.

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A new programmatic environmental assessment presents the unique opportunity to define the bold alternatives for the implementation of high-speed service in America’s Northeast. The document’s exploration of rail alignment alternatives and environmental impacts today will set forth the parameters that projects in the future will inherit. This makes the process by which alternatives are presented and screened a critical one. The incorporation of HSR design features in the analyses allows

Penndesign 2012 studio report alternatives conducive to future high-speed upgrades and improvements to be adopted and additional opportunities to be considered in the future. These specifications must be broad and far-reaching enough to guarantee the Northeast Corridor’s ability to grow as demand and technology advance and as HSR is realized over several phases and over many years.

A REGIONAL INFRASTRUCTURE BANK Bridging the Funding Chasm

Modernization of the Northeast Rail Corridor is by no means the Northeast’s only large infrastructure need. Due to the same policies of deferred maintenance and scarce federal funding that have taken their toll on the NEC, the Northeast’s other transportation, water, and energy infrastructure systems are also in need of substantial investments. Just as with the high-speed rail line, the Northeast must act now to prepare its infrastructure for the next generation of growth.

In the first half of the 20th Century, new public authorities built highways, bridges, tunnels, airports and other major projects largely with local revenues and user fees. During the building boom of the postwar years, public confidence in the national government and progressive tax policy allowed the federal government to provide matching funds and outright grants to the era’s great building works. The Federal Aid Highway Act of 1956 (P.L. 83-627, 70 Stat. 374) provided a 90/10 match for construction of new Interstate Highways, with the federal government granting 90 cents of every dollar of Interstate built. Over the last thirty years, however, that level of funding support has waned as successive generations of lawmakers have reduced the government’s capacity to take in necessary revenues. The largest contributor to federal surface transportation funding, the Motor Fuel Tax (“gas tax”), has stayed stagnant at 18.4 cents/ gallon since a 1993 deficit reduction compromise. As inflation has taken its toll, this tax now provides only 63% of the purchasing power it had when it was last increased two decades ago.31 In the absence of federal funding, states and municipalities have levied taxes upon themselves to fill the funding void left by the federal government. This report builds on this precedent, recommending that the states raise a significant portion of the capital cost of Northeast Corridor rail improvements themselves. To incentivize new state infrastructure investments and to provide the Northeast with a reliable, apolitical source of infrastructure funds, this report proposes the creation of a

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Penndesign 2012 studio report Northeast Infrastructure Bank (NEIB). This could be authorized under the same federal law used to fund NEC HSR and establish the necessary powers for Amtrakâ&#x20AC;&#x2122;s new Northeast business division to control and operate HSR in the Northeast Corridor. As the finance section of this report discussed, only 25% of the revenue raised from increased taxes would go towards the creation of HSR in the Northeast Corridor. The remaining 75% would be available for states to invest in the NEIB. Under the NEIB proposal, the Northeast states could contribute funds that would be used to finance investments in transportation like bridge replacements and highway repairs, energy, and water. Funding for HSR would not come from the NEIB, as the NEIB would be reserved for other transportation, energy, and water infrastructure investments that states in the Northeast megaregion would like to complete. The finance section of this report also details the role that state and megaregional infrastructure banks could play in financing infrastructure investments across the Northeast as well as how proposals for a national infrastructure bank could benefit an investment like HSR in the Northeast Corridor. The 1956 Federal Aid Highway Act provided a 90/10 match for the construction of new Interstate Highways. Today, the pot of federal funding for transportation investments is shrinking.viii

While the NEIB has much promise, it requires several provisions to gain the support of states in the Northeast megaregion. In order for the NEIB to work politically, most or all of the following provisions should be met: In the early stages of the NEIB, the federal government will likely need to provide a financial incentive to encourage state participation.

The NEIB should place a strong focus and direct its investments on large, multi-state investments like the Northeast Corridor that will benefit the entire megaregion. Doing so will allow multiple states to realize benefits and encourage collaboration across states. It will be important for states to get roughly back what they put into the NEIB or at least receive major benefits from investments in adjoining states.

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The creation of an NEIB has the potential to allow states in the Northeast megaregion to move forward in investing in infrastructure that is quickly aging and to plan for the future. To ensure an acceptable balance of payments to and from each state, the NEIB could establish requirements for the amount of funds that states could expect to receive based on how much they put into the NEIB. This could be a formula amount established under the federal enabling legislation that would also broaden the powers of Amtrakâ&#x20AC;&#x2122;s new Northeast business division. In the event that states did not use the amount of money allocated to them in a given year, they could potentially request for these funds to roll

Penndesign 2012 studio report over to the next year so that the money could be used as needed. The NEIB allows states in the Northeast megaregion to move forward with investing in infrastructure to address the growing need for additional capacity and to improve existing infrastructure in light of todayâ&#x20AC;&#x2122;s fiscal austerity. Having an entity like the NEIB in place would help to encourage multistate collaboration and promote a perspective of the Northeast megaregion as a whole while supporting investments in transportation, water, and energy throughout the megaregion.

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The Northeast Infrastructure Bank will take in funding from state and federal taxes as well as private resources to finance a infrastructure projects within the Northeast.

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Supporting HS2 in Englandi

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MESSAGING building support for megaprojects Broad public support will be vital to making significant transit improvements in the Northeast megaregion. Previous transportation improvement projects have demonstrated important lessons that inform efforts to build public support for Northeast Corridor rail improvements.

In their survey of the last century of megaprojects in the United States, Alan Altshuler and David Luberoff studied political trends in leadership, initiative, support groups, and funding schemes and identified three essential ingredients that led to project success. The first is the importance of engaging the business community. Altshuler and Luberoff found that successful support coalitions were most often spearheaded by business enterprises with “very direct interests at stake.”1 The second ingredient is public sector leadership.2 The authors found that senior public officials were most often the impetus behind megaprojects moving forward and that part of their role was to actively involve the business community. Finally, the authors found that successful projects adopt a “do no harm” planning principle and seek to mitigate threats to neighborhood or environmental assets.3 In sum, Altshuler and Luberoff highlight key stakeholder groups that must be in agreement and alignment as to why and how the Northeast Megaregion will modernize its transportation system.

Five former Secretaries of Transportation – spanning 22 years and four Presidents – recently released a conference paper through the University of Virginia’s Miller Center highlighting messaging, particularly at a local and granular level, as an important part of marshaling support for large transportation investments in the U. S. Overall, the Secretaries agreed that “most citizens” support public spending on transportation when they can see its effects at the local level.4 Recommendations to garner support for transportation projects include positive and consistent messages, a strategy keyed to election rhythms, and

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“All politics is local.” – Tip O’Neill, Speaker of the U.S. House of Representatives, 1977-1987.

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The importance of messaging has been recognized by transportation officials past and present.ii From left, former Transportation Secretaries Secretary Sam Skinner, Norman Mineta, Mary Peters, Gerald Baliles – Director of the Miller Center, Rodney Slater and James Burnley.

the use of both traditional and social media.5 They agreed with Luberoff and Altshuler that political leadership is key, but in the face of federal gridlock, advocate for local voices and locally oriented messages.6 A public affairs firm at the conference concurred, adding that the public will invest in projects when results are “concrete and locally realized.”7 With these lessons in mind, this section focuses on strategies that can be used to build support coalitions around a consistent set of ideas from the diverse array of stakeholders in the Northeast Megaregion.

THE HS2 MARKETING CAMPAIGN

These strategies also draw from the High Speed 2 (HS2) marketing campaign in the UK, which the studio learned about firsthand during its visit to London in March 2012. The studio met with Lucy James and James Bethell, the principals of Westbourne, a London-based communications firm, which led the HS2 communications campaign. Bethell and James described how Westbourne created its own “mini-army” to refute NIMBYism (“Not In My Backyard”) and other opposition to the HS2 project. Their campaign focused on galvanizing support for HS2 from the business community, and as the Miller Institute found, starting the campaign at the local level proved fruitful.

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The HS2 campaign used three distinct strategies that a campaign for investments in the NEC should consider: on-the-ground public outreach, a consistent message delivered in varying way, and appealing, digestible facts. The HS2 public relations team traveled around England in a tour bus, handing out t-shirts

Penndesign 2012 studio report and involving local celebrities. This gave the public a chance to interact with the proposal in a fun way, mitigating the notion of the project as “top-down planning” by giving people a chance to comment on it in real time. The campaign carefully crafted a set of consistent messages that appealed to a variety of audiences and translated them into many different digestible sound bites. To equate the investment with increased job growth, the campaign used the simple phrase, “Yes to jobs, Yes to HSR.” In particular, James and Bethell pointed out that they would “zero in” on incorrect or inconsistent press reports and use their positive messages as a form of myth-busting.8

James and Bethell cited the efficacy of grounding the benefits of the investment in stories of how they would affect real people. They interviewed several people in the communities affected by HS2 to find reasons why community members supported the investment. Those stories then became part of the outreach campaign and were tied to their messages. The “Yes to jobs, Yes to HSR” ad campaign featured a young father and son. James explained that the father supported HSR as a way to bring jobs to Manchester for his son’s generation. This type of campaign reflects the Miller Center findings that indicate the importance of a locally oriented message. Moreover, as the benefits of improvements to rail transportation are often expressed in abstract and numerical ways, grounding them in local stories makes them more comprehensible. Thus, this report recommends that the PR for the project adopt a similar approach.

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The HS2 public relations team toured England in its campaign to build public support for the project.iii

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marketing hsr in the northeast corridor Building off of the successful HS2 campaign, the Penn studio team proposes a strategy for building an effective PR campaign in support of the Early Action HSR project that achieves the following: Develops key messages based on interviews and focus groups

Identifies target stakeholders for messaging and idea exchange Matches messages to stakeholders

The key messages will serve to bring the general public, the business sector, and government into alignment on the priorities driving this investment. Fully developing messaging campaign at such an early stage of the project is premature;dhowever, it is vital to lay the groundwork for a successful campaign by highlighting its strategic importance and suggesting content that will be compelling and educational. For additional information, please see Appendix C-1.

Getting the Messaging Right

The Early Action HSR project has the potential to improve how nearly everyone lives in and travels through the Northeast megaregion. Messages should be developed around the three fundamental societal benefits of this project: 1) Equity and Choice, 2) Capacity, and

3) Strategy and Investment. HS2 Campaign billboards featuring project supporters.iv

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The fundamental message is that investing in transportation is an investment in the future. The following section outlines the key takeaways from the Penn 2012 studio report in concise,

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pithy language intended to inform any conversations about the investment as necessary. These messages are flexible enough to appeal to the diverse array of stakeholders but adhere consistently to the three main concepts of “equity and choice,” “capacity,” and “strategy and investment.”

Equity and Choice Benefits for All

The Early Action HSR project area is the second highest rail ridership segment of the NEC, which makes it a strong place to extend the benefits of investment in rail to a significant number of people. In addition to the development of the HSR tracks, Phase 1 also includes the modernization of the existing main line in this segment and $10 billion in additional funds to eliminate bottlenecks between Boston and New York City and Philadelphia and Washington, DC. When completed, Phase 1 will provide Northeast megaregion residents and visitors with better travel options and improved alternatives to the area’s highly congested highways and airways. Beyond Phase 1, the megaregion’s unique density and existing transit ridership rates make investing in city transit a way to transform many lives at once. Expanded Travel Options and Improved Quality of Life

The expansion of travel options enables people to move more freely and affects where people choose to live in relation to where they work. This increase in personal choice provides a significant improvement in quality of life, as people can more easily locate near amenities that will support their lifestyles. In addition, every city along the NEC is less than an hour’s travel time from the competitive economies of New York City, Washington, DC, and Boston.

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Capacity Efficient Increased Capacity The Early Action HSR project will improve connectivity and reduce travel time, improvements that attract businesses and drive economic growth. Reducing travel time encourages urbanization by bringing businesses in closer proximity to each other, putting a larger workforce within reach of jobs. In addition to urbanization, infrastructure improvements support growing agglomeration economies, which accelerate citiesâ&#x20AC;&#x2122; mix of industries towards those with greater productivity. Reliability of Travel Times and Service

The Early Action HSR project will include two dedicated highspeed rail tracks as well as improvements along the existing corridor and to existing transit systems. Much like adding a bypass road, the addition of these tracks will remove the bottlenecks in an overloaded and aging system. This modern transportation system will be a network on which citizens of and visitors to the Northeast can rely for frequent and on-time rail travel. Flexible Funding

In the current political climate, Congress and the American public are concerned about federal debt. To minimize the need for federal direct grants, the studioâ&#x20AC;&#x2122;s proposed diversified financing approach draws heavily on value capture schemes, fares and other user fees, and local and state taxes. Not only does this diversify the risk and make the project more attractive to private investors, but it also ensures that localities and private institutions pay their fair share for the benefits they will realize.

Strategy & Investment Local Leadership

Cities along the HSR line can benefit from the economic development opportunities that follow such an investment. However, as discussed earlier in this report, HSR alone is not sufficient to guarantee the economic benefits. Cities must have strong local leadership to develop strategies that maximize these benefits and engage their private economic generators. Responsibility and Accountability

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The political environment can be capricious and fraught, which often stalls project momentum and drives up costs as politicians act in their parochial best interests. The 2012 Penn Northeast HSR studio proposes the creation of a new institution with strong

Penndesign 2012 studio report leadership and the responsibility and accountability to plan, finance, and implement HSR in the Northeast Corridor without legislative interference. The institutionâ&#x20AC;&#x2122;s design will provide the stability, longevity, and momentum necessary to see such a longterm project to completion. Job Creation

The improved connectivity and reduced travel times that attract businesses and drive economic growth support agglomeration, which favors productive industries. Greater productivity encourages industry growth and supports job creation. The HSR investment itself will create thousands of permanent, direct and indirect jobs.

Transportation as an Investment for the Future

The public accepts a monthly bill for all utilities except transportation. The real costs of transportation have long been hidden behind dedicated taxes that the federal government redistributes in the form of subsidies. Without tax increases to keep up with necessary transportation investments, funding these projects will become increasingly difficult. Educating the public on the true costs of transportation and building public support for funding transportation projects is imperative.

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The fundamental messages and specific arguments in favor of the Early Action HSR Project.

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Key Stakeholder Groups The key messages should be framed to appeal to three broad stakeholder groups: the public, local and private interests, and public entities.

The General Public

Members of the general public have unique resources, desires, and needs. Their wishes are paramount in a political world that runs on mass media and short election cycles. As both the HS2 Campaign and the Miller Center report indicate, public support is vital and is often driven by how people view local benefits – or diseconomies – of an investment.

Local and Private Interests

Denver’s FasTracks has been an enormous boost to transit system in Colorado.v

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As detailed by Altschuler and Luberoff and the Miller Center report, local businesses and city governments will support public infrastructure investments that promote economic development in their communities. Since the Early Action HSR project is regional in scope, its proponents will need to demonstrate both the regional and local benefits it will provide. The proposed Early Action HSR project will encourage private investments and businesses to locate around HSR stations, expanding the potential workforce for employers in these cities, contributing to job growth, and expanding housing choices for their residents.

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Case Study: Denver FasTracks Denver is an illuminating example of the power of messaging to change public dialogue. It is the story of a fundamentally fiscally conservative place where people love their cars, yet still voted to raise taxes to fund a regional transit system that would improve their way of life. After the failure of its 1997 “Guide the Ride” ballot measure to raise a tax for improved transit in the area, the Denver Regional Transportation District (RTD) conducted surveys and found that the public felt that the initiative had been poorly explained and did not include enough public input.9 Learning from their failure, the Transit Alliance was founded as a coalition of 39 groups including local officials, business leaders, and environmentalists.10 The Transit Alliance formed a multi-year outreach campaign to promote local funding for RTD’s FasTracks project, which ultimately resulted in the passage of a ballot measure in 2004.11 The Transit Alliance convened a group called Citizens for FasTracks Success in 2003 to promote citizen support of the project. That group then hired a prominent Denver political consultant, CRL Associates, to guide their outreach plan.12 The RTD and the Transit Alliance also managed a generously funded and well-organized campaign leading up to the 2004 referendum. The mass media campaign had a budget of $1.7 million from the Denver Chamber of Commerce, and focus groups and surveys helped shape a series of messages aimed at what the voters valued. This campaign focused on the idea that public transit is the means to ensure the region’s long term economic vitality and competitiveness. The emerging message was “For just four pennies on a $10 purchase, FasTracks will deliver projects on time that will transform Denver into a livable city for decades to come.”13 As the group of transportation secretaries suggested, the campaign made use of traditional media such as television and mail. Like the HS2 campaign, the Transit Alliance also held street fairs and events that increased their local visibility.14 RTD and Denver Mayor-then-Governor John Hickenlooper’s perseverance highlight the importance of sustained and strong leadership in completing a megaproject. As the project continued, voters chose to increase taxes to pay for different segments. For example, a local TV station ran a story about a trucker who started with one truck and bought two more while working on RTD’s Phase 1.15 Similarly, the Northeast will need to sustain public interest beyond the Early Action project. The Northeast faces many of the same issues as Denver – congestion, a public ostensibly opposed to taxes, and the need to educate the public in order to build public support for transit. Entities already exist that could fill the messaging role that emerge in this story. The Business Alliance for Northeast Mobility could gather the relatively small amount of funds required for a public support campaign, and together with entities such as the Northeast Corridor Commission could act as a similar stakeholder coalition to the Transit Alliance. However, the key takeaway from this example is the ability of a consistent message, well delivered, to change public perception of a megaproject even in our current political climate.

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Penndesign 2012 studio report Large private institutions such as locally based corporations, major developers, and universities should also be convinced to support the project, as the increase in labor markets and connectivity can provide immense economic benefits and job growth.

Public Entities

Financing will rely on multiple sources from the federal, state, and local levels. Each will contribute their fair share to projects that will enhance capacity and connectivity in the NEC. In addition, a significant amount of funding will come from recognizing the future benefits by utilizing value capture systems instead of increasing national, state, and local debt.

Messaging Example: Philadelphia

These messaging concepts should be designed to appeal to the target stakeholders. The following messages help make the case for HSR in Philadelphia:

Local Leadership

Economic development will become particularly pertinent to combat the understandable concerns of cities such as Philadelphia that worry that they will become bedroom communities to New York City. However, as discussed earlier in this report, HSR alone is not sufficient to guarantee economic benefits. Cities must develop strategies to maximize these benefits, such as increasing workforce development to maintain human capita, and improving local quality of life.

Greater Travel Options

Not only does increased capacity along the corridor allow for speedy trips from Philadelphia, it will also allow NJ Transit and SEPTA to run more reliable and demand-tuned local services. The proposed Early Action HSR project will encourage businesses to locate around HSR stations, expand the potential workforce for employers inseach city, and expand housing choices for residents. More reliable SEPTA service will bring suburban residents into the city and increased connectivity across the city will provide more travel options to larger parts of its population.

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Job Creation In addition to the direct and indirect jobs that the physical transit investment will provide, Philadelphiaâ&#x20AC;&#x2122;s plethora of universities will respond well to the agglomeration benefits that come with being better connected with the dense network of universities along the corridor. University productivity and innovation rates increase significantly with increases in collaboration. Improved connections along the corridor will magnify what is already an economic asset in Philadelphia and along the NEC.

Messaging: Conclusion

Consistency, local input, and leadership are the main ingredients for a successful megaproject messaging campaign. As Altschuler and Luberoff discuss, the support of the business community is crucial. However, the Miller Center report and the HS2 campaign found, public support at the grassroots level is also key to the success of a given project. Finally, as the Denver FasTracks example shows, a coalition that allows diverse stakeholders to feel heard and a set of consistent messages for them to voice will help a project succeed.

The strategy for competitiveness in the Northeast Megaregion is vital, but without clarity as to the plan and its benefits, the project will not succeed. This section illuminates messages that can appeal to distinct audiences while putting forward the overall ideas of the strategy: equity and choices, capacity enabling growth, and the importance of strategy and investment.

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Philadelphia will benefit greatly from investments in HSR.vi

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London at Nighti

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CONCLUSION Building Our Future The Northeastâ&#x20AC;&#x2122;s competitors in Europe, Asia and elsewhere around the world are making bold investments in their transportation , environmental, and education systems, while our disinvestment in these systems is limiting our progress. To move forward, the megaregion can no longer wait for a break in the Washington, DC gridlock. The Phase 1 program detailed in this report would demonstrate the value of HSR and modernized conventional rail throughout the Northeast. It would also promote reinvestment in the heart of the Northeast Megaregion and in Philadelphia, New York, and other cities that will benefit from improved inter-city and commuter rail service. It can achieve all of these goals while minimizing federal support.

Transportation is a Utility

Americans have long understood that they need to pay directly for every kind of utility and service that they use, except for one glaring exception: transportation. Most people know that if they donâ&#x20AC;&#x2122;t pay for water, electric, sewer, cell phone or broadband services at the end of the month, their access to these services will be discontinued immediately. In the past this same relationship applied to transit and highway use: most of these services required fares, taxes, and tolls that paid for the entire cost of the service provided.

In the Northeast, rail fares were cross-subsidized by real estate investments owned by railroad companies at station areas, with rents for apartments, homes and offices in these locations helping to pay for the capital and operating costs of rail services. The best example of this is New Yorkâ&#x20AC;&#x2122;s Grand Central Terminal, which was financed through air rights development of office buildings and hotels in the vicinity of the Terminal and along the Park Avenue yards and tunnels north of the station.

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Penndesign 2012 studio report In the case of our superhighways, federal and state gas taxes enacted in 1956 built the Interstate Highway System and the major roads that most Americans use every day. Since 1982, a portion of federal gas taxes has also been used to build, modernize, and expand the nation’s urban transit networks, with the goal of diverting passengers from congested urban highways to transit and providing metropolitan residents with increased transportation choice. The systems financed by these dedicated taxes were built to provide mobility through the early 21st century, enabling a fivefold increase in U.S. GDP over a 50-year period. Today, these systems are at or approaching capacity. It is time to act to create a complete transportation system that can deliver the capacity which current and coming generations of Americans, and residents of the Northeast in particular, will need to sustain our competitiveness and standard of living for the next half-century.

The link between railroad operations and the real estate values they create was broken when the Penn Central Company divested itself of its rail operations, leaving these money-losing activities to the government to operate, but keeping its real estate assets and their realized transportation benefits. In the absence of this link, it has become necessary to find public resources to modernize and operate the Northeast’s passenger rail network.

Yet the Northeast Corridor has never had a dedicated tax or fee to help finance its capital and operating needs. Without consistent, dedicated funding and institutional mandates, the federal and state governments that own the Corridor have never made the necessary investments to upgrade it to a state of good repair or to enable it to operate world-class HSR service. In the absence of these precedents in the United States, this studio turned to international examples of infrastructure investment.

International Examples

The studio’s London Charette helped the team to learn firsthand how transportation investments have been made, as well as their positive impact on Greater London. Since 1980, the British government has strengthened London and Southeast England’s ties to European and global markets through investments in major infrastructure projects. These projects, in turn, catalyzed the regeneration of large areas of the region. Many of the key themes emerging from the London Charette appear throughout this report, including HSR’s role as a capacity expansion, the CIL financing strategy for Crossrail, HS2 marketing efforts, and the fundamental concept that investments in rail systems can

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Penndesign 2012 studio report bring about the economic transformation of cities, megaregions and even nations. As London prepares to host the 2012 Olympic Games, the world is watching and waiting to learn from London and the Southeast and the economic success realized from three decades of investment in rail and cities.

In addition to the UK, Germany and Lille, France provide examples of the benefits of HSR and the preparation cities must undertake to realize those benefits. From those examples, the studio team has prepared five benchmarks for cities, particularly postindustrial cities like those in the Northeast United States, to benefit from improved transportation investments. The leaders of the Northeast should consider these benchmarks as they plan for the future of this megaregion.

Financing the System

Needed public resources have been increasingly difficult to find as federal and state leaders, in the face of insistent public opposition to the progressive tax increases that fueled the last generation of American prosperity, have refused to increase federal and state gasoline taxes for nearly two decades. This has occurred even as the cost of maintaining our aging Interstate Highway and passenger rail systems has risen, and as improved fuel efficiency standards have reduced the proceeds from existing gas taxes. This has left the federal Highway Trust Fund, and most state transportation funds, broke and broken. Although HSR operations can be self-supporting and private investments can cover a portion of their capital costs, their construction will still require some public capital funds before those other parties will be comfortable with such investments. We will not have the financial resources to modernize the NEC and build world-class HSR services here without new public resources devoted to this purpose.

Americans must understand that without a return to the progressive tax system of the mid-20th century, the transportation services they use must be paid for in the same way that they pay for every other utility and service they consume. This payment will require new tax, toll, fare, or other revenues to support these services. It will require that we renew the historic links between rail investments and the real estate values and other economic benefits that these infrastructure investments produce. This report lays out a set of strategies to finance Phase 1, which will be the first step in increasing competitiveness in the region.

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Economic Benefits The Northeast and its 50 million residents already live with the disadvantages of being in the most crowded, densely populated area of the United States, including congestion and high costs of living. These disadvantages are not merely unpleasant; worse, they limit the advantages that density and propinquity can provide. The investments in the Northeast Corridor proposed in this report can help residents and workers in the Northeast capture the benefits of density and the megaregion’s unique economic geography, including economic growth, high-quality transit, quality of life, and access to world-class culture and services. These investments can bring the Northeast’s cities closer together by compressing their time-space relationship and thus drive badly needed development that congestion and the Northeast’s current economic fragmentation now prevents.

Regional Collaboration

The Northeast has 85% of U.S. heavy rail ridership, making it the most rail-dependent area of the US. It also has the oldest and most congested highways, airports, and railroads in the country. Consequently, the Northeast must address these system upgrades before the rest of the country. As the economies and mobility systems of the major metropolitan regions in the Northeast are increasingly interdependent, the whole megaregion must act as one to invest in modernizing and expanding these systems.

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For all these reasons, the Northeast’s governors should collaborate with each other and with the megaregion’s Congressional delegation, major city mayors, and business leaders to mobilize public opinion around the need to invest in the Northeast Corridor and other essential transportation and infrastructure services. Strong, inspiring leadership will be essential to promote and maintain collaboration on this scale. The goal should be to finance and build a complete, 21st century transportation system for the whole megaregion, organized around a modernized Northeast Corridor, and including worldclass HSR services from Boston to Washington, DC. This system should be designed to provide the capacity and efficiency needed to sustain the Northeast’s competitiveness and quality of life through at least the middle of this century. The Early Action HSR project proposed in this report should become the first phase of this larger investment program. This early phase can demonstrate the value of these investments and build support for the longterm investment program needed to secure the Northeast’s quality of life and its leadership in the global economy for decades to come.

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A Call to Action We should build high-speed rail now because we want to preserve the environment. We should build it because it will create employment and wealth. We should build it because as planners, we have a crazy notion (and more than a little evidence) that the interchange of people and cultures in cities produces agglomeration benefits far beyond what any homogenous group of individuals could produce. We should build it because it’s cheaper than all of the other alternatives. We should build it because the next generation already wants it. We should build it because our lives will slowly get worse and worse without it. But that’s not why we’re going to build it. We are going to build it because our lives, and the lives of those who follow us, will be better because of it. The last time this country was faced with a mobility crisis, our answer wasn’t just to fix what we had, build more of the same kind of roads, or build the same kind of mass transit system. We made a quantum leap. We made the Interstate Highway. We invented an entirely new kind of road, and then proceeded to shape our country around it. We didn’t ask how bad a system people would tolerate. We asked how much better could we make people’s lives?

And what did we get from it? Congestion, people stuck in traffic, the failure of the American dream? No. We had the single biggest expansion of human mobility in the world’s history. We settled the unsettlable. We traveled more and farther than any other generation. The world’s economy and standard of living expanded at a rate never before seen in human history. We made something so wonderful that it succeeded beyond our wildest imaginations. We changed the way we lived, just because it was so great. And now we need to make the next quantum leap. Not because we know how terrible it will get. Not because we’re making do and seeing how low people will settle. But because for the first time in a generation we need to ask, how much we can improve our lives? How much better off can we be in ten years? In fifty years? How far can we go?

We used to ask those questions, and got a resounding answer: we can go farther, faster, and better than any generation before us. Now, we ask again: how good can it get? The answer is going to be the same. It’s going to be great. And that’s why we’re going to build high-speed rail.

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References and Citations Executive Summary Text Endnotes 1. 2. 3. 4. 5. 6. 7.

“Top North American Universities 2011-2012,” Times Higher Education of London, 2012, <http://www. timeshighereducation.co.uk/world-universityrankings/2011-2012/north-america.html>. America 2050. Regional Plan Assocation, 2008, <www.rpa.org>. Economist Intelligence Unit, Hot Spots: Benchmarking Global Competitiveness (London, UK: The Economist, 2012), 5. American Public Transortation Association, Economic Impact of Public Transportation Investment (Boston, MA: Economic Development Research Group, Inc.; Bethesda, MD: Cambridge Systematics, Inc., 2009), 28. American Public Transportation Association, 31. NEC Master Plan Working Group, The Northeast Corridor Infrastructure Master Plan (Washington D.C.: Amtrak, 2010), 45. Alan Altshuler and David Luberoff, Mega-Projects: The Changing of Urban Public Investment (Washington, D.C., Brookings Institution: 2004), 220. Exceptions to this rule were coalitions headed by environmental groups.

Images Endnotes i. ii.

[View of the Northeast from the International Space Station] NASA, the crew of Expedition 30 on the International Space Station, on January 29, 2012, <http://www.nasa.gov/images/ content/620618main_iss030e055791_full.jpg>. [Avenue of Arts, Philadelphia] <http://www.avenueofthearts.org/ upload/pages/facts-img.png>.

Introduction Text Endnotes 1.

“Top North American Universities 2011-2012,” Times Higher Education of London, 2012, <http://www. timeshighereducation.co.uk/world-universityrankings/2011-2012/north-america.html>.

Images Endnotes i.

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PennDesign 2010 Megaregion Studio, Making High-speed Rail Work in the Northeast Megaregion: Shaping the Region’s Future Through Strategic Investments. (Philadelphia: University of

Penndesign 2012 studio report Pennsylvania, 2010), 32-33. PennDesign 2011 Megaregion Studio, High-speed Rail in the Northeast Megaregion: From Vision to Reality (Philadelphia: University of Pennsylvania, 2011), 15. iii. [The Reliability of HSR in Japan] <http://farm7.static.flickr.com/61 79/6166631570_0f600cf135_b.jpg>. ii.

Connections Text Endnotes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

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John Slattery, “NJ Transit Trains Stuck in Hudson River Tunnel,” CBS, September 22, 2011. NJ Transit, Customer Satisfaction Survey (Newark, NJ: NJ Transit, 2011). NJ Transit, Multilevel Rail Coach Procurement (Newark, NJ: NJTransit, 2012). Clifford R. Black, “The Acela Express,” Japan Railway & Transport Review (March 2005): 18-21. Federal Aviation Administration, New York/New Jersey/ Philadelphia Metropolitan Area Airspace Redesign: Final Environmental Impact Statement (Washington, D.C.: United States Department of Transportation, 2007). PennDesign 2011 Megaregion Studio, High-Speed Rail in the Northeast Megaregion: From Vision to Reality (Philadelphia, PA: University of Pennsylvania, 2011), 35. PennDesign 2010 Megaregion Studio, Making High-speed Rail Work in the Northeast Megaregion: Shaping the Region’s Future Through Strategic Investments (Philadelphia, PA: University of Pennsylvania, 2010), 121. NEC Master Plan Working Group, The Northeast Corridor Infrastructure Master Plan (Washington D.C.: Amtrak, 2010). Ted Sherman, “N.J. Halts New Work on $8.7B N.Y.-N.J. Tunnel Project Due to Budget Issues,” The Star-Ledger, September 12, 2010. Amtrak, “Gateway Project” (Presentation, 2011). Airports Council International, “Passenger Traffic 2010 FINAL,” Airports Council International, 2011, <jsp?zn=aci& cp=1-5-54-55_666_2__ >. Jeffrey M. Zupan, Richard E. Barone, and Matthew H. Lee, Upgrading to World Class: The Future of the New York Region’s Airports (New York: Regional Plan Association, 2011). Federal Aviation Administration, Record of Decision for Capacity Enhancement Program at Philadelphia International Airport (New York: FAA, 2010). Airports Council International. Delta Air Lines, “Delta Unveils Schedule for New Domestic Hub at New York’s LaGuardia Airport” (News Release, 2011). “Data and Statistics,” Bureau of Transportation Statistics, 2011, <http://www.bts.gov/data_and_statistics/>. APTA Public Transportation Fact Book, Appendix B, 2011,

Penndesign 2012 studio report <http://www.apta.com/resources/statistics/Documents/ FactBook/2011_Fact_Book_Appendix_B.xls>.

Images Endnotes i. ii.

[NY Jersey] <http://google.com/earth/>. [MBTA] < http://www.mbta.com/about_the_mbta/news_ events/?id =22564&month=9&year=11>. iii. [Connecticut River Bridge] <http://paulies.files.wordpress. com/2010/11/ct3_.jpg>. iv. [St. Pancras Station, London] <http://www.flickr.com/photos/ freefoto/2198155242/sizes/o/in/photostream/>. v. [View of the Northeast from the International Space Station] NASA, the crew of Expedition 30 on the International Space Station, on January 29, 2012.

Economic imperative Text Endnotes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

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PennDesign 2011 Megaregion Studio, High-Speed Rail in the Northeast Megaregion: From Vision to Reality (Philadelphia, PA: University of Pennsylvania, 2011), 11. “The Impact of the Transcontinental Railroad,” CBS, 2010, <http:// www.pbs.org/wgbh/americanexperience/features/generalarticle/tcrr-impact/>. David A. Pfeiffer, “Ike’s Interstates at 50,” Prologue 38 (2006), <http://www.archives.gov/publications/prologue/2006/ summer/interstates.html>. Pfeiffer. Economist Intelligence Unit, Hot Spots: Benchmarking Global Competitiveness (London, UK: The Economist, 2012), 5. Economist Intelligence Unit, 5. PennDesign 2011 Megaregion Studio, 50. Ibid, 53. PennDesign 2010 Megaregion Studio, Making High-speed Rail Work in the Northeast Megaregion: Shaping the Region’s Future Through Strategic Investments (Philadelphia, PA: University of Pennsylvania, 2010), 24. Petra Todorovich, Daniel Schned and Robert Lane, High-Speed Rail: International Lessons for U.S. Policy Makers (Cambridge, MA: Lincoln Institute of Land Policy, 2011), 16. Greengauge, “High-speed Rail in Britain: Consequences for Employment and Economic Growth” (London, Greengauge, 2010), 7-8. “Case Study: Canary Wharf Group,” Mayor of London: Transport, 2012, <http://www.lscp.org.uk/newwaytoplan/resources/file/ CS Canary Wharf Group compressed.pdf>. “Canary Wharf Group Contributes £150 Million to Crossrail and will Design and Build,” Mayor of London: Transport, 2012, <http://www.crossrail.co.uk/news/press-releases/canary-

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14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38.

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wharf-group-contributes-150m-to-crossrail-will-design-buildisle-dogs-station>. “Estimated Daytime Population and Employment-Residence Ratios: Commuting (Journey to Work),” U.S. Census Bureau, 2000, <http://www.census.gov/hhes/commuting/data/ daytimepop.html>. Daniel Graham, Investigating the Link Between Productivity and Agglomeration for UK Industries (London, UK: Imperial College London, 2006), 14. “County Business Patterns: MSA Business Patterns (NAICS),” U.S. Census Bureau, 2009, <http://www.census.gov/econ/cbp/ index.html>. “Survey of Research and Development Expenditures at Universities and Colleges,” National Science Foundation, 2009, < http:// www.nsf.gov/statistics/srvyrdexpenditures/> and research compiled from various university websites. Benjamin F. Jones, Stefan Wuchty and Brian Uzzi, “Multi-University Research Teams: Shifting Impact, Geography and Stratification in Science,” Science Magazine (2008), <http://www.sciencemag. org/content/322/5905/1259.full#ref-9>. Jones et al, “Multi-University Research Teams: Shifting Impact, Geography and Stratification in Science.” PennDesign 2010 Megaregion Studio, 121. PennDesign 2011 Megaregion Studio, 61-63. Siemens, The Economic Impacts of High-Speed Rail on Cities and Their Metropolitan Areas (Washington, D.C.: The United States Conference of Mayors, 2010), 4-5. American Public Transportation Association, Economic Impact of Public Transportation Investment (Boston, MA: Economic Development Research Group, Inc.; Bethesda, MD: Cambridge Systematics, Inc., 2009), 28. American Public Transportation Association, 26. Ibid, 31. Siemens, 6. “New York Outdoor Advertising,” Titan, 2012, <http://www. titan360.com/usa-markets/new-york/overview.html>. “Union Station, Washington DC,” Union Station, 2012, <http:// www.unionstationdc.com/info/infohistory>. Gabriel Ahlfedt and Arne Fedderson, “From periphery to core: Economic Adjustments to High Speed Rail,” (London, UK: London School of Economics, 2010), 8. Ahlfedt et al, 8. Ibid, 49. Chia-Lin Chen and Peter Hall, “The impacts of HSTs on British economic geography,” Journal of Transport Geography 19 (2011): 689-704. Ibid, 689-704. Ibid, 689-704. Ibid, 697. Ibid, 698. Ibid, 700. “Key Figures for 2001 Census: Census Area Statistics: Area: Newport (Local Authority),” National Statistics: Office for National Statistics, 2003, < http://www.statistics.gov.uk/hub/

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index.html>. 39. John Davies, Nigel Jenkins, Menna Baines, and Peredur Lynch, The Welsh Academy Encyclopedia of Wales (Cardiff, UK: University of Wales Press 2008). 40. “Key Figures for 2001 Census: Census Area Statistics: Area: Doncaster (Local Authority),” National Statistics: Office for National Statistics, 2003, < http://www.statistics.gov.uk/hub/ index.html>. 41. Sir Peter Hall, interview by PennDesign 2012 Megaregion Studio, March 2012. 42. Chia-Lin, discussion with PennDesign 2012 Megaregion Studio, March 2012. 43. Ibid. 44. Sir Peter Hall, Interview. 45. Chia-Lin Chen and Peter Hall, “The wider spatial-economic impacts of high-speed trains: a comparative case study of Manchester and Lille sub-regions,” Journal of Transport Geography (2011): 2. 46. Greengauge 21, High Speed Trains and the Development and Regeneration of Cities (Surrey, UK: Greengauge21, 2006), 11. 47. “The wider spatial-economic impacts of high-speed trains,” 2. 48. Ibid, 11. 49. Ibid, 12. 50. “The wider spatial-economic impacts of high-speed trains,” 3. 51. Ibid, 14. 52. Ibid, 18. 53. Ibid, 17. 54. Ibid, 18. 55. Greengauge21 (2006), 11. 56. Cornelius Nuworsoo and Elizabeth Deakin, “Transforming High Speed Rail Stations to Major Activity Hubs: Lessons for California,” (paper presented at the annual meeting for the Transportation Research Board, Washington, D.C., January 1115, 2009): 11. 57. Todorovich, et al, 35. 58. Nuworsoo et al, 11. 59. “The wider spatial-economic impacts of high-speed trains,” 21. 60. Ibid, 21. 61. Todorovich et al, 30. 62. Ibid, 32. 63. “30/10 Initiative,” Metro, 2011, <www.Metro.net/ projects/30-10/>. 64. Tim Rutten, “Optimism on Villariagosa’s 30/10 initiative,” Los Angeles Times, January 1, 2011, <http://articles. latimes.com/2011/jan/01/opinion/la-oe-rutteninfrastructure-20110101>. 65. Greengauge21 (2006), 12. 66. Todorovich et al, 30. 67. Economist Intelligence Unit, 3. 68. Ibid, 14. 69. Todorovich et al, 30. 70. Walter Rybeck, “The Property Tax as a Super User Charge,” Proceedings of the Academy of Political Science, Vol. 35, No. 1, (1983): 133-147.

Penndesign 2012 studio report 71. Nuworsoo et al, 11; Greengauge21, 11. 72. Greengauge21 (2006), 11. 73. Daniel Graham, “Agglomeration Economies and Transport Investment,” OECD Joint Transportation Research Centre (2007): 12. 74. Economist Intelligence Unit, 17. 75. Ibid, 17. 76. Ibid, 4. 77. “Bay Area TOAH,” Bay Area TOAH Fund, 2012, <http://bayareatod. com/>. 78. Ibid. 79. Greengauge21 (2006), 11. 80. Rachel Strauss, “Infrastructure Investment in the 21st Century: Policy and Practice,” Infrastructure Investment in the 21st Century: Policy and Practice (Philadelphia, PA: University of Pennsylvania, 2011): 13-19. 81. Ibid, 13-19. 82. Ibid, 13-19. 83. Neale Coleman, Presentation, London Charette on Positioning the Northeast for Global Competitiveness, London, UK, March 5-9, 2009. 84. “Creating Communities” London Legacy Development Corporation, 2012, <http://www.londonlegacy.co.uk>. Tom Love, “New director of park operations at the Queen Elizabeth Olympic Park,” SportsPro, February 28, 2012, <http://www. sportspromedia.com>. 85. Suet Ying Ho, Evaluating British Urban Polocy (Burlington, VT: Ashgate Publishing Co, 2003), 100. 86. Ibid, 102. 87. Lord Heseltine (former Deputy Prime Minister of the United Kingdom), in discussion with PennDesign 2012 Megaregion Studio, March 2012. 88. “Estimated Daytime Population and Employment-Residence Ratios: Commuting (Journey to Work).” 89. “County Business Patterns: MSA Business Patterns (NAICS).” 90. Select Greater Philadelphia, “Impact of Higher Education in Greater Philadelphia” (Philadelphia, PA: Select Greater Philadelphia, 2007). 91. Greater Philadelphia Tourism Marketing Corporation, Greater Philadelphia Tourism Profile (Philadelphia, PA: Greater Philadelphia Tourism Marketing Corporation, 2011). 92. American Public Transportation Association, 28. 93. Ibid, 31. 94. “About SEPTA,” SEPTA, April 13, 2012, <http://www.septa.org/ index.html>. 95. Christine Fisher, “Putting the Lower Schuylkill Master Plan in motion,” PlanPhilly, January 24, 2012, <http://planphilly.com/ putting-lower-schuylkill-master-plan-motio>. 96. Econsult Corporation, Vacant Land Management in Philadelphia: the Costs of the Current System and the Benefits of Reform” (Philadelphia, PA: Econsult Corporation, 2010), 4. 97. Aaron Kase, “The Ugly Truth About Philly’s Vacant Lots.”

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Penndesign 2012 studio report Philadelphia Weekly, November 16, 2010, <http://www. philadelphiaweekly.com/news-and-opinion/The-Ugly-TruthAbout-Phillys-Vacant-Lots.html>. 98. Econsult Corporation, 4. 99. “Real Estate One of the Lowest Class A, Central Business District Office Rates,” Select Greater Philadelphia, 2011, <http://www. selectgreaterphiladelphia.com/data/realestate.cfm>. 100. “Real Estate One of the Lowest Class A, Central Business District Office Rates.” 101. “Exploring the Lower Schuylkill’s Gritty and Green Potential,” PlanPhilly, April 18, 2012, <http://planphilly.com/ eyesonthestreet/2012/04/18/exploring-the-lower-schuylkillsgrity-and-green-potential/>. 102. “Greater Philadelphia. A Great Place to Do Business,” Select Greater Philadelphia, 2012, <http://www.selectgreaterphiladelphia. com/news/news.cfm>. 103. “Who We Are: A Partnership for Progress,” Graduate! Philadelphia, 2012, <http://www.graduatephiladelphia.org/who_we_are. asp>. 104. “History,” City of Philadelphia Mural Arts Program, 2012, < http:// muralarts.org/about/history>. 105. “Our Future,” Philadelphia Museum of Art, 2012, <http://www. philamuseum.org/information/294-361.html>. 106. “About the Reading Viaduct Group,” Reading Viaduct Group, 2012, <http://www.readingviaduct.org/aboutus.html>. 107. Alexandra Wigglesworth, “About the Reading Viaduct Group,” Reading Viaduct Group, 2012, <http://www.metro.us/ philadelphia/local/article/951614--reading-viaduct-parkfinally-rising>. 108. “About Us,” Greater Philadelphia Innovation Cluster, 2012, < http:// gpichub.org/about>.

Images Endnotes i.

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[Top Ten Competitive World Cities] < http://www. managementhinking.eiu.com/sites/default/files/downloads/ Hot%20Spots.pdf>. The Economist Intelligence Unit. Hot Spots: Benchmarking Global Competitiveness . London: The Economist, 2012. ii. Highway Congestion Data: US DOT, FHA iii. [Canary Wharf] < http://capturingmyworld.wordpress. com/2011/04/22/canary-wharf-station/>. iv. [Washington Union Station ] <http://static.travel.usnews.com/ images/destinations/48/washington_dc_union_station_flickr. jpg>. v. [Los Angeles] Siemens, The Economic Impacts of High-Speed Rail on Cities and Their Metropolitan Areas (Washington, D.C.: The United States Conference of Mayors, 2010), 4. vi. [Germany Rail Line] <www.panoramio.com/photo/54633786>. vii. [UK GVA] Data provided by Chia-Lin Chen and Peter Hall, “The impacts of HSTs on British economic geography” Journal of Transport Geography 19 (2011): 689-704. viii. [GVA By City] Data provided by Chia-Lin Chen and Peter Hall, “The

Penndesign 2012 studio report impacts of HSTs on British economic geography” Journal of Transport Geography 19 (2011): 689-704. ix. [HST Lines] Chia-Lin Chen and Peter Hall, “The impacts of HSTs on British economic geography” Journal of Transport Geography 19 (2011): 689-704. x. [Lille] <http://www.mimoa.eu/projects/France/Lille/ EuraLille%20masterplan. xi. [Lille Shift in Industry] Data: Chia-Lin Chen and Peter Hall, “The wider spatial-economic impacts of high-speed trains: a comparative case study of Manchester and Lille sub-regions” Journal of Transport Geography (2011) 2 (chart made by us) xii. [Dell Headquarters] <http://www.content.dell.com>. xiii. [Avenue of Arts, Philadelphia] < http://www.avenueofthearts.org/ upload/pages/facts-img.png>. xiv. [Lord Heseltine] Photo taken by Armando Carbonell. xv. [Philadelphia’s 30/10] <http://www.dvrpc.org/reports/08068. pdf>. xvi. [Lower Schuylkill Master Plan] <http://www.pidc-pa.org/>. xvii. [Select Greater Philadelphia] <http://www. selectgreaterphiladelphia.com/data/marketposition.cfm>. xviii. [Graduate! Philadelphia] <www.graduatephiladelphia.org>. xix. [Green City, Clean Waters] Philadelphia Water Department, Green City Clean Waters: The City of Philadelphia’s Program for Combined Sewer Overflow Control (Philadelphia, PA: 2009). xx. [Reading Viaduct] <landparts.wordpress.com>. xxi. [Supporting Infrastructure Investments for London’s 2012 Olympics] <http://content.architectureoflife.net/Content/ ArticleContent/-London%202012/aol_02_london2012.jpeg>.

financing

Text Endnotes 1. 2. 3. 4. 5. 6. 7.

181

“New York Tappan Zee Bridge Deck Replacement,” U.S. Department of Transportation, Federal Highway Administration, April 4, 2011, <http://www.fhwa.dot.gov/construction/accelerated/ wsny0602.cfm>. Khurram Saeed, “Thruway Authority Waiting on Tappan Zee Bridge Cost Estimate,” The Journal News. March 16, 2012, <http:// www.lohud.com/article/20120316/NEWS03/303160041/ Thruway-Authority-waiting-Tappan-Zee-Bridge-cost-estimate>. Greg Sargent, “The Line That Time Forgot: Second Avenue Subway,” New York Magazine. March 29, 2004, <http://nymag.com/ nymetro/news/features/n_10109/>. Sargent. “Accelerated Bridge Program: Fast 14,” Massachusetts Department of Transportation, 2011, <http://93fast14.dot.state.ma.us/>. “DC to Dulles Metrorail on Track,” Dulles Corridor Metrorail Project, 2012, <http://www.dullesmetro.com/>. “Federal Taxes Paid vs. Federal Spending Received by State, 19812005.” The Tax Foundation. October 19, 2007, <http://www.

Penndesign 2012 studio report

9. 10. 11. 12.

13. 14.

15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

182

taxfoundation.org/research/show/22685.html>. “Federal Taxes Paid vs. Federal Spending Received by State, 19812005.” Ibid. “When Did the Federal Government Begin Collecting the Gas Tax?” Federal Highway Administration, United States Department of Transportation, April 7, 2011, <http://www.fhwa.dot.gov/ infrastructure/gastax.cfm>. “State Gasoline Tax Rates, as of January 1, 2012,” The Tax Foundation, February 16, 2012, <http://www.taxfoundation. org/taxdata/show/26079.html>. “Derek Thompson, “Gas Prices Around the World: Cheaper Than Water and $10 a Gallon.” The Atlantic, May 3, 2011. <http:// www.theatlantic.com/business/archive/2011/05/gasprices-around-the-world-cheaper-than-water-i-and-i-10-agallon/238226/#slide7>. “30/10 Initiatives,” Metro, May 2, <http://www.metro.net/ projects/30-10/>. Martin J. Golden, “Senator Golden Announces Sales Tax Cut and MTA Payroll Tax Cut to Go into Effect Sunday, April 1st,” New York Senate, March 31, 2012, <http://www.nysenate.gov/ press-release/senator-golden-announces-sales-tax-cut-andmta-payroll-tax-cut-go-effect-sunday-april->. “RGGI States Announce Preliminary Release of Auction Application Materials,” The Regional Greenhouse Gas Initiative, Inc. 11 July 2008. <http://www.rggi.org/docs/20080711news_release. pdf>. City of Dallas, TOD TIF District FY 2011 Annual Report (Dallas, TX: City of Dallas Office of Economic Development, 2011). “Funding,” Crossrail, 2012, <http://www.crossrail.co.uk/railway/ funding#.T6ANx59Yvsw>. “Cross Rail Business Rates Supplement Initiative Prospective published – GLA release,” Crossrail 2012. <http://www. crossrail.co.uk/news/press-releases/crossrail-business-ratessupplement-initial-prospectus-published-gla-release>. NEC Master Plan Working Group, The Northeast Corridor Infrastructure Master Plan (Washington D.C.: Amtrak, 2010), 22. NEC Master Plan Working Group. The Northeast Corridor Infrastructure Master Plan. May 2010. Pg 22. PennDesign 2011 Megaregion Studio, High-Speed Rail in the Northeast Megaregion: From Vision to Reality (Philadelphia, PA University of Pennsylvania, 2011), 130. NEC Master Plan Working Group, 22. Todd Litman, “Transit Price Elasticities and Cross-Elasticities,” Journal of Public Transportation Vol 7 (2004): 39. PennDesign 2011 Megaregion Studio, 130. Ibid. Fred Kessler, “Will there be a TIFIA Loan for Your Project in 2012? Letters of Interest are 12 Times Availability,” Infrasight, January

Penndesign 2012 studio report

27. 28. 29. 30. 31. 32.

33.

34. 35. 36. 37. 38. 39. 40. 41.

17, 20120, <http://www.infrainsightblog.com/2012/01/ articles/financing/will-there-be-a-tifia-loan-for-your-projectin-2012-letters-of-interest-are-at-12-times-availability/>. “TIFIA,” U.S. Department of Transportation, Federal Highway Administration, 2012, <http://www.fhwa.dot.gov/ipd/tifia/>. “Railroad Rehabilitation & Improvement Financing (RRIF) Program,” U.S. Department of Transportation, Federal Railroad Administration, 2012, <http://www.fra.dot.gov/rpd/ freight/1770.shtml>. U.S. Department of Transportation, Federal Railroad Administration. “TIGER Grants,” U.S. Department of Transportation, 2012, <http:// www.dot.gov/tiger/>. Michael Doyle, “CA: HSR Plan Still Relies on Federal Funds,” Mass Transit, April 4, 2012, <http://www.masstransitmag.com/ news/10688076/ca-hsr-plan-still-relies-n-federal-funds>. Alexander C. Hart, “Everything You Wanted to Know About National Infrastructure banks But Are Afraid to Ask,” The New Republic, September 9, 2010, http://www.tnr.com/blog/ jonathan-cohn/77568/everything-you-wanted-know-aboutnational-infrastructure-banks-were-afraid->. “Spain: European Investment Bank and Public Works Ministry sign agreement to provide EUR 5 billion for high-speed rail projects,” European Investment Bank, October 25, 2009, <http://www. eib.org/about/press/2009/2009-212-espagne-la-bei-et-leministere-de-lequipement-signent-un-accordcadre-portantsur-loctroi-de-5-milliards-deur-en-faveur-de-projets-dureseau-ferroviaire-a-grande-vitesse.htm>. “S.652 – Building and Upgrading Infrastructure for Long Term Investment,” Open Congress, March 17, 2011, <http://www. opencongress.org/bill/112-s652/text>. William J. Mallet, Steven Maguire, Kevin R. Kosar, National Infrastructure Bank: Overview and Current Legislation (Washington, D.C.: Congressional Research Service, 2011). “State Infrastructure Banks,” American Association of State Highway and Transportation Officials, 2011, <http://www. transportation-finance.org/funding_financing/financing/ credit_assistance/state_infrastructure_banks.aspx>. “What we do,” High Speed 1, 2011, <http://highspeed1.co.uk/>. “What is a SWF,” Sovereign Wealth Fund Institute, 2012, <http:// www.swfinstitute.org/what-is-a-swf/>. Terry Macallister, “China sovereign wealth fund buys Thames Water Stake,” The Guardian, January 20, 2012, <http://www. guardian.co.uk/business/2012/jan/20/china-sovereignwealth-fund-thames-water>. “United Airlines Connection Special,” Amtrak, 2012, <http:// www.amtrak.com/servlet/ContentServer?ff=Yes&c=AM_Co ntent_C&pagename=am%2FLayout&p=1237405732514&c id=1241305381634>. “AIRail: the perfect combination of train and plain,” Luftansa, 2012, <http://www.lufthansa.com/us/en/AIRail-just-like-flying>.

183

Penndesign 2012 studio report

Images Endnotes i.

[Second Avenue Subway] <http://www.flickr.com/photos/ mtaphotos/6841836633/sizes/o/in/photostream/>. ii. [Hillsboro, Oregon Transportation Center] http://www.flickr. com/photos/springfieldhomer/55249008/sizes/o/in/ photostream/>. iii. [Crossrail] < http://www.crossrail.co.uk/assets/library/ document/r/original/routeregionalmapmay2009.pdf> iv. [San Francisco Transbay Terminal] < http://www.flickr.com/ photos/livesoma/6679560793/sizes/o/in/photostream/>. v. [Thames Water Construction] < http://www.flickr.com/photos/ thameswater/4438047742/in/photostream/>. vi. [Luftansa AIRail Station] <http://www.flickr.com/photos/andra_ mb/3183057894/lightbox/>. vii. [Wall Street, Philadlphia City Hall, and U.S. Capitol] <http:// mediafreedom.org/wp-content/uploads/2011/03/Capitol1. jpg>, < http://usat7.info/wp-content/uploads/2008/09/ wall_street.jpg>, < http://upload.wikimedia.org/wikipedia/ commons/e/ed/Philadelphia-CityHall-2006.jpg>. viii. [Gas Prices Around the World: Cheaper Than Water and $10 a Gallon.]The Atlantic, May 3, 2011. <http://www.theatlantic. com/business/archive/2011/05/gas-prices-around-the-worldcheaper-than-water-i-and-i-10-a-gallon/238226/#slide7>.

Institutional Design Text Endnotes 1.

184

“Mica & Shuster Reactions to DOT Rail Funding Announcement.” Transportation and Infrastructure Committee, United States House of Representatives. 9 May 2011. <http://transportation. house.gov/news/PRArticle.aspx?NewsID=1261>. 2. “High Speed Rail” Statement, Department for Transport, http:// www.dft.gov.uk/news/statements/greening-20120110 3. High Speed Two Ltd: Framework Document. November 5, 2011. http://hs2.org.uk/assets/x/78428 4. Sir Brian Briscoe, “Developing HS2,” Presentation to UPenn Studio, March 7th, 2012 5. Sir Brian Briscoe, “Developing HS2,” Presentation to UPenn Studio, March 7th, 2012 6. Sir Brian Briscoe, “Developing HS2,” Presentation to UPenn Studio, March 7th, 2012 7. Sir Brian Briscoe, “Developing HS2,” Presentation to UPenn Studio, March 7th, 2012 8. “Analysis of the 2004-05 Budget Bill: High-Speed Rail Authority (2665).” Legislative Analyst’s Office. February 2004. <http:// www.lao.ca.gov/analysis_2004/transportation/trans_05_2665_ anl04.htm>. 9. “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century.” Legislative Analyst’s Office. 17 July 2008. <http:// www.lao.ca.gov/ballot/2008/1_11_2008.aspx>. 10. “Opinion of Edmund G. Brown, Jr., Attorney General, and Taylor

Penndesign 2012 studio report

11.

12.

13. 14. 15. 16. 17.

18. 19. 20. 21.

22. 23. 24. 25. 26. 27. 28.

S. Carey, Deputy Attorney General.” No. 07-1002. State of California. 27 February 2009. <http://ag.ca.gov/cms_ attachments/opinions/pdfs/o524_07-1002.pdf>. “California High-Speed Rail Program Draft Revised 2012 Business Plan: Building California’s Future.” Chapter 4, p. 4-5. 2 April 2012. <http://www.cahighspeedrail.ca.gov/uploadedFiles/ Document_Repository/Business_Plans/Draft%20Revised%20 2012%20Business%20Plan%282%29.pdf>. “Executive Summary [of] Economic Impact Analysis: Passenger Rail Station Areas,” p. 1. Carter & Burgess, Inc. and Capitol Market Research for Austin-San Antonio Intermunicipal Commuter Rail District. 10 April 2006. <http://lonestarrail. com/images/uploads/ASA_Economic_Impact_Study.pdf>. “FAQs.” Lone Star Rail District. 2009. <http://lonestarrail.com/ index.php/lstar/faq/>. “The Organization.” Lone Star Rail District. 2009. <http:// lonestarrail.com/index.php/lstar/about-rail-organization/>. “The Next Wave of Transportation.” Lone Star Rail District. 2009. <http://lonestarrail.com/index.php/lstar/about-projectoverview/>. “Project Milestones.” Lone Star Rail District. 2009. <http:// lonestarrail.com/index.php/lstar/about-project-timeline/>. “Memorandum of Understanding between the Regional Transportation Council of the North Central Texas Council of Governments and the Lone Star Rail District.” 14 April 2011. <http://lonestarrail.com/images/uploads/MOU.LSRD__ NCTCOG_.Executed_4-18-11_.pdf>. “About the Business Alliance” http://www.northeastbizalliance. org/about/ “High-Speed Rail in the Northeast Megaregion: From Vision to Reality,” 100. Spring 2011 Studio, Department of City and Regional Planning, University of Pennsylvania. Spring 2011. “Statement of Transportation Secretary Ray LaHood on the First Meeting of the Northeast Corridor Infrastructure and Operations Advisory Commission.” 27 September 2010. <http://www.fra.dot.gov/Pages/press-releases/222.shtml>. “H.R. 6003: An Act to Reauthorize Amtrak, and For Other Purposes (Passenger Rail Investment and Improvement Act of 2008,” p. 32-3. 12 June 2008. 110th Congress, 2d Session. <http:// www.gpo.gov/fdsys/pkg/BILLS-110hr6003pcs/pdf/BILLS110hr6003pcs.pdf>. “H.R. 6003,” 35. Discussion with Donnie Maley. 9 April 2012. “Discussion with Donnie Maley.” Ibid. Compliance with the National Environmental Policy Act in Implementing High-Speed Intercity Passenger Rail Program. http://www.fra.dot.gov/downloads/rrdev/hsipr_nepa_ guidance_081309Final.pdf http://www.whitehouse.gov/administration/eop/ceq/Press_ Releases/January_13_2012 http://www.whitehouse.gov/administration/eop/ceq/Press_ Releases/March_6_2012

185

Penndesign 2012 studio report 29. NEC Master Plan Working Group. The Northeast Corridor Infrastructure Master Plan. May 2010. Pg 45. 30. Stephen Gardner 31. United States Department of Labor. “CPI Inflation Calculator.” Bureau of Labor Statistics. 2012. http://www.bls.gov/data/ inflation_calculator.htm.

Images Endnotes i. ii.

iii. iv. v. vi. vii. viii. ix.

32.

[Acela Train] <http://www.northeastbizalliance.org/2011/07/ the-acela-story-part-2-planning-for-the-not-so-distant-future. html>. [HS2 Train Rendering] <http://www.rail.co/wp-content/ uploads/HS22.jpg>. [HS2 Logo] <http://www.hs2.org.uk/>. [CHSRA Logo] <http://www.cahighspeedrail.ca.gov/>. [CHSRA Train Rendering] <http://www.cityofgilroy.org/ cityofgilroy/city_hall/community_development/high_speed_ rail/HSR1.jpg>. [Business Alliance for Northeast Mobility Logo] <http://www. northeastbizalliance.org/sync/elements/bafnem-logo-web. png>. [Northeast Corridor Infrastructure and Operations Advisory Commission] < http://northeastcorridorcommission.com/ index.htm>. [Highway Image] <http://media.treehugger.com/assets/ images/2011/10/interstate-stimulus.jpg>. [City Hall, Philadelphia] <http://www.flickr.com/photos/ klingon65/5352922847/sizes/o/in/photostream/>. “California High-Speed Rail Program Draft Revised 2012 Business Plan: Building California’s Future.”

messaging Text Endnotes 1. 2. 3. 4.

5. 6. 7.

186

Alan Altshuler and David Luberoff, Mega-Projects: The Changing of Urban Public Investment (Washington, D.C., Brookings Institution: 2004), 220. Exceptions to this rule were coalitions headed by environmental groups. Alshuler et al, 224. Ibid, 287. “Are We There Yet? Selling American on Transportation,” paper presented at the David R. Goode National Transportation Policy Conference, The Miller Center, University of Virginia (2011): 9, <http://web1.millercenter.org/conferences/report/conf_2011_ transportation-Miller-Center.pdf> “Are We There Yet? Selling American on Transportation,” 10. Ibid, 13, 50. Ibid, 50.

Penndesign 2012 studio report 8. 9. 10. 11. 12. 13. 14. 15.

Lucy James and James Bethell, “Winning Hearts and Minds for HSR, “ Presentation, London Charette on Positioning the Northeast for Global Competitiveness, London, UK, March 5-9, 2012. Institute for Sustainable Communities, “Case Study: Denver,” 2012, <http://www.iscvt.org/resources/documents/denver_ fastracks.pdf>. Institute for Sustainable Communities. Ibid. Center for Transportation Excellence, Transportation Finance at the Ballot Box (Washington D.C.: Center For Transportation Excellence, 2006), 13. Institute for Sustainable Communities. Center for Transportation Excellence, 14. Leah Harnack, “RTD: A Willing Partner,” Mass Transit, February 12, 2012, <http://www.masstransitmag.com/article/10616334/ rtd-a-willing-partner?page=3>.

Images Endnotes i.

[Supporting HS2 in England] <http://www.flickr.com/ photos/25904993@N07/5857969218/sizes/o/in/ photostream/>. ii. [Five Former U.S. Transportation Secretaries] <http://www. flickr.com/photos/miller_center/6795982781/in/set72157629115356517>. iii. [HS2 Public Relations Tour Bus] < http://gohs2.files.wordpress. com/2012/01/bus.jpg>. iv. [HS2 Campaign Ads] <http://www.campaignforhsr.com/wpcontent/uploads/2011/06/HSR-Web-Banner-05.jpg>. <http:// www.campaignforhsr.com/wp-content/uploads/2011/07/ HSR-Web-Banner-06.jpg>. v. [Denver FasTracks] <http://www.rtd-fastracks.com/gallery. php?category=30&section=main>. vi. [Philadelphia Skyline] <http://www.flickr.com/photos/ acouture/3450219515/sizes/o/in/photostream/>.

Conclusion

Images Endnotes i.

187

[London at Night] <http://www.boston.com/bigpicture/2008/08/ london_from_above_at_night.html>.

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Appendix

A-1 Phase 1 Costs

COST REFERENCE Item Early Ac2on HSR Alignment Sta4ons Junc4ons Special Case: Gateway Project State of Good Repair 30th St-‐NYP Shopping List

PROJECT TOTAL

189

Cost

Source $32,009,308,332 $9,359,308,332 $4,800,000,000 $4,350,000,000 $13,500,000,000 $2,000,000,000 $10,000,000,000

$44,009,308,332

Penn Penn Penn Penn AMTK FN Penn/AMTK

190

Fro m Segment MP Airport station approach (break point from original NEC) 121 Philadelphia International Airport HSR Station 126 Tunnel to Philadelphia Junction 128 Philadelphia Junction (off to 30th Street and to Market East) to South Street 131 Philadelphia Market East HSR Station 134 Spring Garden St. to I-95 (tunnel) 135 I-95 to Comly (re-join NEC; aerial) 137 I-95 existing NEC alignment 142 Cornwells Heights Station 147 After Cornwells to the PA/NJ state line 150 Trenton Station 163 Olden Ave. to Princeton Jct 165 Princeton Junction Station 173 PJS to New Brunswick 175 New Brunswick Station 188 NB to I-287 crossing 190 Curves in Metuchen to Metropark 194 Metropark Station 197 Metropark to Elizabeth junction point (leaving 198 NEC; trains to Newark Downtown stay on NEC) Approaching EWR 206 Newark Liberty Interational Airport HSR Station 208 Junction point between original NEC and New NEC (Newark Downtown trains re-join 210 for new tunnel) Junction point to west edge of Hudson 216 New York Moynihan Station 219

NEC Alignment

125 150 150 150

210.4

215.8

218.9 221.7

125

150 150 150 125 110 90 100 60 40 45 80 110 110 125

135.3 137.2 141.7 147.1 149.7 163 164.9 173 174.7 187.6 190.4 193.7 196.5 198.3

125

150

133.9

205.9

125 125

128.4 131.1

208.1

125

Max Speed (mph)

125.5

To MP

4 4

4 4 3 2 4 0 4 5 10 4 4 4 4 4

3 3

ROW Acquisition Type

$ 19,036,237 Undeveloped

Track Cost

None none Suburban None Suburban Suburban None Suburban None None None Dense Suburban Dense Suburban Dense Suburban

$ $ $

$ 749,372

$ $ $ 155,297 $ $ 89,727 $ 458,990 $ $ 279,535 $ $ $ $ 325,385 $ 276,084 $ 177,483

2 Double Track Section - In Tunnel or Subway $ 18,000,335 None

2 Double Track Section - In Tunnel or Subway $ 24,261,321 None 2 Double Track Section - In Tunnel or Subway $ 21,913,451 None

$ 96,630

$ $

$ 113,392

ROW Cost

$ 42,261,655 None 2 Double Track Section - In Tunnel or Subway

2 Double Track Section - In Tunnel or Subway $ 17,217,711 None

$ 31,451,175 Dense Suburban

Double Track Section - In Tunnel or Subway $ 10,956,725 Double Track Section - In Tunnel or Subway $ 14,869,842 Double Track Section - On Structure $ 35,218,046 Double Track Section - On Structure $ 42,261,655 Double Track Section - At Grade $ 10,759,612 Double Track Section - At Grade $ 55,039,556 Double Track Section - In Tunnel or Subway $ 14,869,842 Double Track Section - At Grade $ 33,520,331 Double Track Section - In Tunnel or Subway $ 13,304,595 Double Track Section - In Tunnel or Subway $100,958,399 Double Track Section - In Tunnel or Subway $ 21,913,451 Double Track Section - On Structure $ 25,826,567 Double Track Section - At Grade $ 11,587,275 Double Track Section - At Grade $ 7,448,962

2 Double Track Section - At Grade

2 2 2 2 2 2 2 2 2 2 2 2 2 2

2 Double Track Section - In Tunnel or Subway $ 21,913,451 Suburban

2 Double Track Section - In Tunnel or Subway $ 22,696,074 None 2 Double Track Section - In Tunnel or Subway $ 21,130,828 none

2 Double Track Section - At Grade

Add Tracks Tracks Needed Track Type

$ $

$ $ $ $ $ $ $ $ $ $ $ $ $ $

$ $

Twin Single Track TBM (<6 Miles) Twin Single Track TBM (<6 Miles) Standard Structure Standard Structure None None Twin Single Track TBM (<6 Miles) None Twin Single Track TBM (<6 Miles) Twin Single Track Drill & Blast (<6 Miles) Twin Single Track TBM (<6 Miles) Standard Structure None None

10,412,492 Twin Single Track TBM (<6 Miles) 9,404,832 Twin Single Track TBM (<6 Miles)

18,137,890 Twin Single Track TBM (<6 Miles)

7,725,398 Twin Single Track TBM (<6 Miles)

7,389,511 Twin Single Track TBM (<6 Miles)

25,527,400 None

4,702,416 6,381,850 15,114,908 18,137,890 8,733,058 44,672,951 6,381,850 27,206,835 5,710,076 43,329,403 9,404,832 11,084,266 9,404,832 6,045,963

9,404,832 Twin Single Track TBM (<6 Miles)

9,740,719 Twin Single Track TBM (<6 Miles) 9,068,945 Twin Single Track TBM (<6 Miles)

15,450,795 None

Signaling/ Communications/ ElectriďŹ cation Structures, Tunnels, Walls -

$ 358,218,607 $ 323,552,290

$ 623,993,703

$ 265,775,096

$ 254,219,657

$ 161,776,145 $ 219,553,340 $ 128,759,275 $ 154,511,130 $ $ $ 219,553,340 $ $ 196,442,462 $ 2,016,763,961 $ 323,552,290 $ 94,423,468 $ $ -

$ 323,552,290

$ 335,107,729 $ 311,996,851

STW Costs

$ 500,000,000

$500,000,000

$ 500,000,000 $ 500,000,000 $ 500,000,000

$ 500,000,000

$ 500,000,000 $ 500,000,000

$ 500,000,000

Other

57,727,948

Gateway Gateway

Gateway

$ 291,500,828

$ 278,826,879

$ 677,435,287 $ 740,805,032 $ 679,247,526 $ 214,910,675 $ 19,582,398 $ 100,171,497 $ 240,805,032 $ 61,006,701 $ 215,457,134 $ 2,161,051,763 $ 354,870,573 $ 131,659,687 $ 21,268,191 $ 13,672,409

$ 854,967,203

$ 867,544,522 $ 842,196,624

$ 534,600,424

Total

$/Rt-Mi

3.1 2.8 100.8

5.4

2.3 $ 126,739,000

2.2 $ 126,739,000

7,596,000

$ 483,882,000 $ 389,897,000 $ 150,944,000 $ 39,798,000 $ 7,532,000 $ 7,532,000 $ 126,739,000 $ 7,532,000 $ 126,739,000 $ 167,523,000 $ 126,739,000 $ 39,897,000 $ 7,596,000 $ 7,596,000 7.6 $

1.4 1.9 4.5 5.4 2.6 13.3 1.9 8.1 1.7 12.9 2.8 3.3 2.8 1.8

2.8 $ 305,345,000

2.9 $ 299,153,000 2.7 $ 311,925,000

4.6 $ 116,217,000

Rt-Mi

Penndesign 2012 studio report

A-2 Early Action HSR Alignment & Cost Estimates

191

New York Moynihan Station

Newark Penn Station

Station Philadelphia Airport Philadelphia Market East Philadelphia 30th Street Cornwells Heights Trenton Metropark Newark Liberty Airport

Sel 1 1 1 1 1 1 1

Location Philadelphia South (Baldwin) South Philadelphia Wye 30th Street South Philadelphia North (Bridesburg) Trenton South (Morrisville) Trenton Terminal Area Trenton North (Ham) Metropark South (Edison) Metropark North (Colonia) Newark South (Linden) Newark North (Meadowlands) Meadowlands freight connection Empire Deep Tunnel Connection

No. of Tracks 4 to 6 Multi Multi 6 to 4 4 to 6 Multi 6 to 4 4 to 6 6 to 6 6 to 6 4 to 2 2 to 3 2 Sel 1 1 1 1 1 1 1 1 1 1 1 1 1

SPECIAL CASE- IN GATEWAY ESTIMATE

Station Type A SPECIAL CASE F B E E A

Appro x MP Type

NE CORRIDOR HSR CAPITAL COSTS

ID 13 14 15 16 17 20 21

NE CORRIDOR HSR CAPITAL COSTS STATIONS

4,350

Cost of Selected Projects ($M) $ 100 $ 600 $ 800 $ 100 $ 150 $ 250 $ 200 $ 100 $ 150 $ 150 $ 500 $ 250 $ 1,000

Cost Allowance ($M) $ 100 $ 600 $ 800 $ 100 $ 150 $ 250 $ 200 $ 100 $ 150 $ 150 $ 500 $ 250 $ 1,000

Existing station upgrade

4,775

500 $

4,300

This number becomes much higher if we build an HSR station on the new alignment at Newark (which is what Amtrak is now 500 proposing) -- probably in $500M range

Remarks Southerly connection from NEC to Philadelphia center city & airport route 3-way wye junction in tunnel to connect center city tunnel to 30th Street Station Tunnel portal and track connections south of 30th Street Station Northerly connection from NEC to Philadelphia center city & airport route Southerly connection to hi-speed route through Trenton NJT & SEPTA commuter rail terminal improvements Northerly connection to hi-speed route through Trenton Southerly connection to hi-speed route through Metuchen & Metropark Northerly connection to hi-speed route through Metuchen & Metropark Southerly connection to hi-speed route through Newark Airport and NYC Provides HSR access from hi-speed tunnel tracks to Newark Penn Sta Track connection from Hudson River tunnel to freight lines in NJ Provides connectivity from Moynihan hi-speed station platforms to Empire Line

Cost Location ($M) Highspeed Basic Tunnel $ 500 $ 3,000 Existing station upgrade $ 25 Highspeed+Commuter At-grade $ 250 Highspeed Adjacent At-grade $ 200 Highspeed Adjacent Trench $ 300 Highspeed Basic Tunnel $ 500

Cost of Selected Projects ($M) $ 500 $ 3,000 $ 25 $ 250 $ 200 $ 300 $ 25

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A-3 Early Action HSR Capital Costs: Stations & Junctions

192

WUS

New Carrollton Station

Baltimore to Washington 3rd track

Baltimore B+P Tunnel

Bridges

Wilmington 3rd Track

Southern Section Improvement Projects

Bridges

Bridgeport

S Norwalk

Stamford Station Approach

Harrison/Rye Express Tracks

New Rochelle -- Shell Flyover

Northern Section Improvement Projects Boston South Station

$2,000

WUS Other Improvements

$15,326

$1,000 $309m Amtrak, $1b FN estimate

$120

$595

$3,511

$3,065

$399

Millions Source/Cost type information

Included in above Going rate based on previous tunnel station cost estimates, doubled for $1,000 double entrances $210 Double Niatic $600 $210 Double Niatic $210 Double Niatic $210 Double Niatic $210 Double Niatic

$132 Deep bore tunnel

$87 High structure

Taken from Hartford example $750 placeholder

$9 Suburban ﬂyover $500 High-speed station cost $9 Suburban ﬂyover

Millions Source/Cost type information $500 $286m Amtrak, $500m FN estimate

WUS Capacity-only improvements

Add 4th track through station area; additional platforms

Additional track? Need a cost?

New track (Amtrak)

Item New track along existing ROW (Amtrak) Gunpowder, Bush, Susquehanna and 4tracking Replace with uniform curvature arc, station improvements

Peck Saga/Walk Repair Coscob Repair Devon Pelham Bridge (NY) Conn River

station platform in tunnel (east and west sides) - potential development site?

save time with straight tunnel under harbor

branch, jet, s-curve

own alignment (using I-95) along river to avoid existing crossing

branch connection

New HSR-ready tracks and platforms Fly back down past yard

Flyover @ I-95

Separate middle two tracks for highspeed envelope

New tracks, station improvement Grade separated junction for Amtrak Hell Gate Line & Metro-North New Haven Line

Item

NEC IMPROVEMENT PROJECTS

TOTAL

AMTK

Units

1.14 miles

2.53 miles

Source Length

PENN David David David David David David

PENN

PENN PENN PENN

Source Length AMTK

This project should be done in Phase 1, along with one segment of 4th track closer to Baltimore -- provides an opportunity for non-stop trains to pass stopping trains. Despite what I told you previously, it now looks like the initial DC terminal investment will need to be on the order of $3B to "do it right," though there might be opportunities to tap funding sources beyond those that would otherwise be available to the NEC. If I were assembling this list, I probably would shift some funds from the "bridges" line item to "Washington terminal"

This is probably light for getting all the way from DC to Baltimore. May be OK for ﬁrst phase (West Baltimore to north of Odenton)

Not sure what Amtrak scope entails; bypass route that was part of prior UPenn studio proposal would probably be more costly than this. Opportunity to save some $$ in initial phase -- perhaps assume just one of the three bridges within the $10B allowance

Scope of this project is larger than that of the B&P Tunnel in Baltimore -- I'd guess at the $4-5B range -- therefore I wouldn't count on doing this one in the ﬁrst $10B

Cost at S.Norwalk depends on how long the bypass route has to be. Lots of stuff in the way and expensive connections back to the main line. Costs probably much higher but hard to pin down without an alignment plan -- maybe somewhere between $500M and $1B ??

Just a guess, but as good a placeholder as any I think this one should be on the initial list, since it's an actual project that has been designed (can't recall the cost thought); important for increasing # of Amtrak trains from 2 to 4 per hr. [Ok to omit this one -- probably the least necessary of the New Haven Line capacity projects; probably ends up being replaced by a future major project at Rye/Port Chester] Stamford project in total will probably be of the order of magnitude of $1B or more, by the time all the elements are added up.]

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A-4 Section Improvement Projects

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B-1 Gas Tax Scenarios: Best and Moderate Cases Best Case: Gas Tax ($0.10 Federal Increase, $0.10 State Increase) State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

< http://www.api.org/Oil-and-Natural-Gas-Overview/IndustryBest Case: Gas Tax ($0.10 Federal Increase, $0.10 State Increase) Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ Prop_Tax_ Addl_Rev_ To_HSR_ Amt_HSR_ To_HSR_ Amt_HSR_ Source: State Gas Tax Rates Economics/~/media/Files/Statistics/State_Motor_Fuel_Excise_Tax_Update.ashx > _Tax Cur Tax Rev Rev Prop_Fed_AllProp_Fed_All Gain Fed Fed State State To_HSR_Tot To_Other Tax_Inc State_ Current_ Fed_Rev_ Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ Total Gasoline Consumption by State (2006) < http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/ﬁg5_2.cfm > 0.330 110154660 0.10 Total_Consum 0.430 Fed_Tax 143534860 33380200 238334628 Rev 66760400 0.25 Cur 8345050 8345050 16690100 50070300 Abbr State_Name Cur Tax Rev _Tax Tax Rev Rev All Tax_Inc 171574228 Tax_Inc 0.25 RI Rhode Island 333802000 0.184 61419568 0.10 0.284 94799768 33380200 0.330 110154660 0.10 0.430 143534860 33380200 171574228 0.486 737156538 0.10 0.586 888834838 151678300 1016244610 1319601210 303356600 0.25 37919575 0.25 37919575 75839150 227517450 CT Connecticut 1516783000 0.184 279088072 0.2841710768059 430766372 151678300 0.486 0.10 0.586 888834838 151678300 1016244610 0.235 649483835 0.10 0.335 925859935 2763761000.10 1158015859 552752200 0.25 737156538 69094025 0.25 69094025 138188050 414564150 MA Massachusetts 2763761000 0.184 508532024 0.10 0.284 784908124 276376100 0.235 649483835 0.10 0.335 925859935 276376100 1158015859 0.490 2745139740 0.590 3305372340 5602326000.10 3775967724 1120465200 0.25 2745139740 140058150 0.25 140058150 280116300 840348900 NY New York0.10 5602326000 0.184 1030827984 0.2844896432924 1591060584 560232600 0.490 0.10 0.590 3305372340 560232600 3775967724 0.323 1605056768 0.10 0.423 2101978368 4969216000.10 2519392512 993843200 0.25 1605056768 124230400 0.25 124230400 248460800 745382400 PA Pennsylvania 4969216000 0.184 914335744 0.2843513235712 1411257344 496921600 0.323 0.10 0.423 2101978368 496921600 2519392512 NJ New Jersey 4184152000 0.184 769883968 0.10 0.284 1188299168 418415200 0.145 606702040 0.10 0.245 1025117240 418415200 1376586008 0.145 606702040 0.10 0.245 1025117240 418415200 1376586008 2213416408 836830400 0.25 104603800 0.25 104603800 209207600 627622800 DE Delaware0.10 433203000 0.184 79709352433203000.10179346042 0.284 265986642 123029652 43320300 0.230 99636690 0.10 0.330 142956990 43320300 179346042 0.230 99636690 0.330 142956990 86640600 0.25 10830075 0.25 10830075 21660150 64980450 MD Maryland 2542371000 0.184 467796264 0.284 722033364 254237100 0.235 0.10 0.335 851694285 254237100 1065253449 0.235 597457185 0.10 0.335 851694285 2542371000.10 1065253449 1573727649 508474200 0.25 597457185 63559275 0.25 63559275 127118550 381355650 DC DC 123904000 0.184 22798336 0.10 0.284 35188736 12390400 0.235 29117440 0.10 0.335 41507840 12390400 51915776 0.235 29117440 0.10 0.335 41507840 12390400 51915776 76696576 24780800 0.25 3097600 0.25 3097600 6195200 18585600 SUM 1123475900 3370427700

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0 0 0 0 0 0 0 0 0

Current_ Fed_Rev_ Prop_Fed_ Prop_Fed_ Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ C Rev Rev A State_Name Total_Consum Fed_Tax Cur Tax_Inc Tax Rev Rev _Tax Cur Tax_Inc Tax Rhode Island 333802000 0.184 61419568 0.10 0.284 94799768 33380200 0.330 110154660 0.10 0.430 143534860 33380200 1 Connecticut 1516783000 0.184 279088072 0.10 0.284 430766372 151678300 0.486 737156538 0.10 0.586 888834838 151678300 10 Massachusetts 2763761000 0.184 508532024 0.10 0.284 784908124 276376100 0.235 649483835 0.10 0.335 925859935 276376100 11 New York 5602326000 0.184 1030827984 0.10 0.284 1591060584 560232600 0.490 2745139740 0.10 0.590 3305372340 560232600 37 Pennsylvania 4969216000 0.184 914335744 0.10 0.284 1411257344 496921600 0.323 1605056768 0.10 0.423 2101978368 496921600 25 New Jersey 4184152000 0.184 769883968 0.10 0.284 1188299168 418415200 0.145 606702040 0.10 0.245 1025117240 418415200 13 Delaware 433203000 0.184 79709352 0.10 0.284 123029652 43320300 0.230 99636690 0.10 0.330 142956990 43320300 1 Maryland 2542371000 0.184 467796264 0.10 0.284 722033364 254237100 0.235 597457185 0.10 0.335 851694285 254237100 10 DC 123904000 0.184 22798336 0.10 0.284 35188736 12390400 0.235 29117440 0.10 0.335 41507840 12390400

Source: State Gas Tax Rates Total Gasoline Consumption by State (2006)

Prop_Tax_ Addl_Rev_ To_HSR All Gain Fed 238334628 66760400 0. 1319601210 303356600 0. 1710768059 552752200 0. 4896432924 1120465200 0. 3513235712 993843200 0. 2213416408 836830400 0. 265986642 86640600 0. 1573727649 508474200 0. 76696576 24780800 0.

< http://www.api.org/Oil-and-Natural-Gas-Overview/IndustryEconomics/~/media/Files/Statistics/State_Motor_Fuel_Excise_Tax_Update.ashx > < http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/ﬁg5_2.cfm >

Moderate Case: Gas Tax ($0.05 Federal Increase, $0.10 State Increase) State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

Current_ Fed_Rev_ Prop_Fed_ Prop_Fed_ Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ C Rev Rev A State_Name Total_Consum Fed_Tax Cur Tax_Inc Tax Rev Rev _Tax Cur Tax_Inc Tax Rhode Island 333802000 0.184 61419568 0.05 0.234 78109668 16690100 0.330 110154660 0.10 0.430 143534860 33380200 1 Connecticut 1516783000 0.184 279088072 0.05 0.234 354927222 75839150 0.486 737156538 0.10 0.586 888834838 151678300 10 Massachusetts 2763761000 0.184 508532024 0.05 0.234 646720074 138188050 0.235 649483835 0.10 0.335 925859935 276376100 11 New York 5602326000 0.184 1030827984 0.05 0.234 1310944284 280116300 0.490 2745139740 0.10 0.590 3305372340 560232600 37 Pennsylvania 4969216000 0.184 914335744 0.05 0.234 1162796544 248460800 0.323 1605056768 0.10 0.423 2101978368 496921600 25 New Jersey 4184152000 0.184 769883968 0.05 0.234 979091568 209207600 0.145 606702040 0.10 0.245 1025117240 418415200 13 Delaware 433203000 0.184 79709352 0.05 0.234 101369502 21660150 0.230 99636690 0.10 0.330 142956990 43320300 1 Maryland 2542371000 0.184 467796264 0.05 0.234 594914814 127118550 0.235 597457185 0.10 0.335 851694285 254237100 10 DC 123904000 0.184 22798336 0.05 0.234 28993536 6195200 0.235 29117440 0.10 0.335 41507840 12390400

Best Case: Gas Tax ($0.10 Federal Increase, $0.10 State Increase) < http://www.api.org/Oil-and-Natural-Gas-Overview/IndustryCurrent_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ Prop_Tax_ Addl_Rev_ To_HSR_ Amt_HSR_ To_HSR_ Amt_HSR_ >State Prop_State_ Source: State Gas Tax Rates _Tax Cur Tax Tax_Inc Rev Rev Economics/~/media/Files/Statistics/State_Motor_Fuel_Excise_Tax_Update.ashx Gain Fed Fed State To_HSR_Tot To_Other State_ Current_ Fed_Rev_ Prop_Fed_All Prop_Fed_ All Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ Total Gasoline Consumption by State (2006) <Tax_Inc http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/ﬁg5_2.cfm 0.330 110154660 0.10 Total_Consum 0.430 Fed_Tax 143534860 33380200 171574228 221644528Rev 50070300 0.25Cur >4172525 0.25 8345050 12517575 37552725 Abbr State_Name Cur Tax Rev _Tax Tax Rev Rev All Tax_Inc RI Rhode Island 333802000 0.184 614195681516783000.10 0.284 1243762060 94799768 33380200 0.330 0.10 0.430 143534860 33380200 171574228 0.486 737156538 0.10 0.586 888834838 1016244610 227517450 0.25 110154660 18959788 0.25 37919575 56879363 170638088 CT Connecticut 1516783000 0.184 2790880722763761000.10 0.284 1572580009 430766372 151678300 0.486 0.10 0.586 888834838 151678300 1016244610 0.235 649483835 0.10 0.335 925859935 1158015859 414564150 0.25 737156538 34547013 0.25 69094025 103641038 310923113 MA Massachusetts 2763761000 0.184 508532024 0.10 0.284 784908124 276376100 0.235 649483835 0.10 0.335 925859935 276376100 1158015859 0.490 2745139740 0.10 0.590 3305372340 5602326000.103775967724 4616316624 840348900 0.25 70029075 0.25 140058150 210087225 630261675 NY New York 5602326000 0.184 1030827984 0.284 1591060584 560232600 0.490 2745139740 0.10 0.590 3305372340 560232600 3775967724 0.323 1605056768 0.10 0.423 2101978368 2519392512 745382400 0.25 1605056768 62115200 0.25 124230400 186345600 559036800 PA Pennsylvania 4969216000 0.184 9143357444969216000.10 0.284 3264774912 1411257344 496921600 0.323 0.10 0.423 2101978368 496921600 2519392512 NJ New Jersey 4184152000 0.184 7698839684184152000.10 0.284 2004208808 1188299168 418415200 0.145 0.10 0.245 1025117240 418415200 1376586008 0.145 606702040 0.10 0.245 1025117240 1376586008 627622800 0.25 606702040 52301900 0.25 104603800 156905700 470717100 DE Delaware 433203000 0.184 79709352 0.10 0.284 123029652 43320300 0.230 99636690 0.10 0.330 142956990 43320300 179346042 0.230 99636690 0.10 0.330 142956990 43320300 179346042 244326492 64980450 0.25 5415038 0.25 10830075 16245113 48735338 MD Maryland 2542371000 0.184 467796264 0.284 722033364 254237100 0.235 0.10 0.335 851694285 254237100 1065253449 0.235 597457185 0.10 0.335 851694285 2542371000.101065253449 1446609099 381355650 0.25 597457185 31779638 0.25 63559275 95338913 286016738 DC DC 123904000 0.184 22798336 0.10 0.284 35188736 12390400 0.235 29117440 0.10 0.335 41507840 12390400 51915776 0.235 29117440 0.10 0.335 41507840 12390400 51915776 70501376 18585600 0.25 1548800 0.25 3097600 4646400 13939200 SUM 842606925 2527820775

Source: State Gas Tax Rates Total Gasoline Consumption by State (2006)

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Prop_Tax_ Addl_Rev_ To_HSR All Gain Fed 238334628 66760400 0.2 1319601210 303356600 0.2 1710768059 552752200 0.2 4896432924 1120465200 0.2 3513235712 993843200 0.2 2213416408 836830400 0.2 265986642 86640600 0.2 1573727649 508474200 0.2 76696576 24780800 0.2

Penndesign 2012 studio report

B-2 Gas Tax Scenarios: Conservative Case Conservative Case: Gas Tax ($0.00 Federal Increase, $0.05 State Increase) State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

Current_ Fed_Rev_ Prop_Fed_ Prop_Fed_ Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ C Rev Rev A State_Name Total_Consum Fed_Tax Cur Tax_Inc Tax Rev Rev _Tax Cur Tax_Inc Tax Rhode Island 333802000 0.184 61419568 0.00 0.184 61419568 0 0.330 110154660 0.05 0.380 126844760 16690100 1 Connecticut 1516783000 0.184 279088072 0.00 0.184 279088072 0 0.486 737156538 0.05 0.536 812995688 75839150 10 Massachusetts 2763761000 0.184 508532024 0.00 0.184 508532024 0 0.235 649483835 0.05 0.285 787671885 138188050 11 New York 5602326000 0.184 1030827984 0.00 0.184 1030827984 0 0.490 2745139740 0.05 0.540 3025256040 280116300 37 Pennsylvania 4969216000 0.184 914335744 0.00 0.184 914335744 0 0.323 1605056768 0.05 0.373 1853517568 248460800 25 New Jersey 4184152000 0.184 769883968 0.00 0.184 769883968 0 0.145 606702040 0.05 0.195 815909640 209207600 13 Delaware 433203000 0.184 79709352 0.00 0.184 79709352 0 0.230 99636690 0.05 0.280 121296840 21660150 1 Maryland 2542371000 0.184 467796264 0.00 0.184 467796264 0 0.235 597457185 0.05 0.285 724575735 127118550 10 DC 123904000 0.184 22798336 0.00 0.184 22798336 0 0.235 29117440 0.05 0.285 35312640 6195200

Best Case: Gas Tax ($0.10 Federal Increase, $0.10 State Increase)

Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ Prop_Tax_ Addl_Rev_ To_HSR_ Amt_HSR_ To_HSR_ Amt_HSR_ < http://www.api.org/Oil-and-Natural-Gas-Overview/Industry_Tax Cur Tax Rev Rev Economics/~/media/Files/Statistics/State_Motor_Fuel_Excise_Tax_Update.ashx AllProp_Fed_All Tax_Inc Gain Fed Fed State To_HSR_Tot To_Other >State Source: State Gas Tax Rates State_ Current_ Fed_Rev_ Prop_Fed_ Prop_Fed_ Add_Fed_ Current_State State_Rev_ Prop_State_ Prop_State_ Prop_State_ Add_State_ Cur_Tax_ 0.330 110154660 0.05 Total_Consum 0.380 by 126844760 16690100 171574228 188264328 Rev 16690100 0.25 Cur > 0 0.25 4172525 4172525 12517575 Abbr State_Name Fed_Tax Cur Tax Rev _Tax Tax Rev Rev All Tax_Inc Total Gasoline Consumption State (2006) <Tax_Inc http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/ﬁg5_2.cfm RI Rhode Island 333802000 0.184 61419568 0.10 0.284 94799768 33380200 0.330 110154660 0.10 0.430 143534860 33380200 171574228 0.486 737156538 0.05 0.536 812995688 75839150 1016244610 1092083760 75839150 0.25 0 0.25 18959788 18959788 56879363 CT Connecticut 1516783000 0.184 279088072 0.284 1296203909 430766372 151678300 0.486 0.10 0.586 888834838 151678300 1016244610 0.235 649483835 0.05 0.285 787671885 1381880500.10 1158015859 138188050 0.25 737156538 0 0.25 34547013 34547013 103641038 MA Massachusetts 2763761000 0.184 508532024 0.10 0.284 784908124 276376100 0.235 649483835 0.10 0.335 925859935 276376100 1158015859 0.490 2745139740 0.05 0.540 3025256040 2801163000.10 3775967724 4056084024 280116300 0.25 0 0.25 70029075 70029075 210087225 NY New York 5602326000 0.184 1030827984 0.284 1591060584 560232600 0.490 2745139740 0.10 0.590 3305372340 560232600 3775967724 0.323 1605056768 0.05 0.373 1853517568 2484608000.10 2519392512 248460800 0.25 1605056768 0 0.25 62115200 62115200 186345600 PA Pennsylvania 4969216000 0.184 914335744 0.284 2767853312 1411257344 496921600 0.323 0.10 0.423 2101978368 496921600 2519392512 NJ New Jersey 4184152000 0.184 769883968 0.10 0.284 1188299168 418415200 0.145 606702040 0.10 0.245 1025117240 418415200 1376586008 0.145 606702040 0.05 0.195 815909640 209207600 1376586008 1585793608 209207600 0.25 0 0.25 52301900 52301900 156905700 DE Delaware0.05 433203000 0.184 79709352216601500.10179346042 0.284 201006192 123029652 43320300 0.230 99636690 0 0.10 0.330 142956990 43320300 179346042 0.230 99636690 0.280 121296840 21660150 0.25 0.25 5415038 5415038 16245113 MD Maryland 2542371000 0.184 467796264 0.284 722033364 254237100 0.235 0.10 0.335 851694285 254237100 1065253449 0.235 597457185 0.05 0.285 724575735 1271185500.10 1065253449 1192371999 127118550 0.25 597457185 0 0.25 31779638 31779638 95338913 DC DC 123904000 0.184 22798336 0.10 0.284 35188736 12390400 0.235 29117440 0.10 0.335 41507840 12390400 51915776 0.235 29117440 0.05 0.285 35312640 6195200 51915776 58110976 6195200 0.25 0 0.25 1548800 1548800 4646400 SUM 280868975 842606925 Source: State Gas Tax Rates Total Gasoline Consumption by State (2006)

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195

tate Local_Sales_ Tax 4357 0.000 3692 0.000 4560 0.000 8250 0 9750 0 4643 0.000 0 0.000 4833 0.000 0833 0.000

Penndesign 2012 studio report

B-3 Sales Tax Scenarios: Best and Moderate Cases Best Case: Sales Tax (0.5% State Increase, 0.75% Local Increase)

State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Delaware Maryland DC

State_Sales_ Current_GS_Tax_ Current_Sales_ Incr_State_ New_State_ Prop_State Add_State Local_Sales_ Current_GS_Tax_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo Rate Rev_State State Tax_Rate Tax _Rev _Rev Tax Rev_Local Local Tax_Rate Tax Rev Rev 0.0700 798481000 11406871429 0.005 0.075 855515357 57034357 0.000 0.00 0.00 0.0000 0.000 0.00 0.0635 3145579000 52426316667 0.005 0.069 3591202692 445623692 0.000 0.00 0.00 0.0000 0.000 0.00 0.0625 4625682000 74010912000 0.005 0.068 4995736560 370054560 0.000 0.00 0.00 0.0000 0.000 0.00 0 10568466000 264211650000 0.005 0 11889524250 1321058250 0 6000000000 133333333333 0.0075 0 7000000000 100000 0 8029797000 133829950000 0.005 0 8698946750 669149750 0 248600000 12430000000 0.0075 0 341825000 9322 0.0700 7898165000 112830928571 0.005 0.075 8462319643 564154643 0.000 0.00 0.00 0.0000 0.000 0.00 0.0000 0 0 0.005 0.005 0 0 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 3753778000 62562966667 0.005 0.065 4066592833 312814833 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 976690000 16278166667 0.005 0.065 1058080833 81390833 0.000 0.00 0.00 0.0000 0.000 0.00

Best Case: Sales Tax (0.5% State Increase, 0.75% Local Increase)

Source: State Sales Tax Revenue < http://www.census.gov/govs/state/ > State_ Current_Sales_State_Sales_ Current_GS_Tax_ Current_Sales_ Prop_State Add_State Local_Sales_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/11taxfacts.pdf > Current_GS_Tax_ Incr_Local_ < New_Loc_ Prop_Local_ Add_Local_Incr_State_ New_State_ To_HSR_ Amt_HSR Current_GS_Tax_ To_HSR_ Amt_HSR_ State_Name _RevTot_Rev_All Rev_Local Abbr Rate Rev_State State Rev Tax_Rate TaxAddl_Tax_All _Rev State Tax_State Tax_Rate Rev Rev Sales Tax Rates (2012) http://www.taxadmin.org/fta/rate/sales.pdf >Tot_Tax_All Rev_Local Tax Local Local LocalTo_HSR_Tot To_OtherTax Local Tax_Rate < Rev RI 0.00 Local RhodeSales Island 798481000 0.0011406871429 0.005 0.075 570343570.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 Tax 0.00 Revenue 0.0700 > 855515357 0.0000 < http://www.www.picapa.org/ﬁlestream.aspx?ﬁle=CitizensGuideBudget112011.pdf 0.000 0.00 798481000 57034357855515357 14258589 0.25 14258589 42775768 CT 0.00 Connecticut 0.00 0.0635 3145579000 0.0052426316667 0.005 0.069 3591202692 4456236920.25 111405923 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 > 0.0000 < http://www.nbcnewyork.com/news/local/NY-Sales-Tax-Collection-Rise-Economic-Recovery-Revenue-139901863.html 0.000 0.00 3145579000 445623692 3591202692 0.25 111405923 334217769 MA 0.00 Massachusetts 0.00 0.0625 4625682000 0.0074010912000 0.005 0.068 4995736560 3700545600.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.0000 0.000 0.00 4625682000 370054560 4995736560 92513640 0.25 92513640 277540920 NY New133333333333 York 0 10568466000 264211650000 0.005 0 11889524250 1321058250 0 330264563 0 6000000000 0.0075 0 7000000000 100000 6000000000 0.0075 0 7000000000 1000000000 16568466000 2321058250 18889524250 0 250000000133333333333 580264563 1740793688 PA Pennsylvania 0 8029797000 133829950000 0.005 0 8698946750 669149750 0 167287438 0 248600000 0.0075 0 341825000 9322 248600000 12430000000 0.0075 0 341825000 93225000 8278397000 762374750 9040771750 0 23306250 12430000000 190593688 571781063 NJ 0.00 New Jersey 0.00 0.0700 7898165000 0.00 112830928571 0.005 0.075 8462319643 5641546430.25 141038661 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.0000 0.000 0.00 7898165000 564154643 8462319643 0.25 141038661 423115982 DE 0.00 Delaware 0.0000 0 0.00 0 0.005 0 0.005 0 00.25 0.000 0 0.00 0.00 0.00 0 0.0000 0 0.000 0.00 0.00 0.0000 0.000 0.00 0 0 0.25 3753778000 0.0062562966667 0.005 0.065 4066592833 3128148330.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 MD 0.00 Maryland 0.0600 0.00 0.0000 0.000 0.00 3753778000 312814833 4066592833 78203708 0.25 78203708 234611125 DC 0.00 DC 0.0600 976690000 0.0016278166667 0.005 0.065 1058080833 813908330.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 0.0000 0.000 0.00 976690000 81390833 1058080833 20347708 0.25 20347708 61043125 SUM 1228626480 3685879439

Source: State Sales Tax Revenue Sales Tax Rates (2012) Local Sales Tax Revenue

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tate Local_Sales_ Tax 7179 0.000 7900 0.000 7280 0.000 9125 0 4875 0 7321 0.000 0 0.000 7417 0.000 5417 0.000

< http://www.census.gov/govs/state/ > < http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/11taxfacts.pdf > < http://www.taxadmin.org/fta/rate/sales.pdf > < http://www.www.picapa.org/ﬁlestream.aspx?ﬁle=CitizensGuideBudget112011.pdf > < http://www.nbcnewyork.com/news/local/NY-Sales-Tax-Collection-Rise-Economic-Recovery-Revenue-139901863.html >

Moderate Case: Sales Tax (0.25% State Increase, 0.50% Local Increase)

State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Delaware Maryland DC

State_Sales_ Current_GS_Tax_ Current_Sales_ Incr_State_ New_State_ Prop_State Add_State Local_Sales_ Current_GS_Tax_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo Rate Rev_State State Tax_Rate Tax _Rev _Rev Tax Rev_Local Local Tax_Rate Tax Rev Rev 0.0700 798481000 11406871429 0.0025 0.073 826998179 28517179 0.000 0.00 0.00 0.0000 0.000 0.00 0.0635 3145579000 52426316667 0.0025 0.066 3460136900 314557900 0.000 0.00 0.00 0.0000 0.000 0.00 0.0625 4625682000 74010912000 0.0025 0.065 4810709280 185027280 0.000 0.00 0.00 0.0000 0.000 0.00 0 10568466000 264211650000 0.0025 0 11228995125 660529125 0 6000000000 133333333333 0.0050 0 6666666667 66666 0 8029797000 133829950000 0.0025 0 8364371875 334574875 0 248600000 12430000000 0.0050 0 310750000 6215 0.0700 7898165000 112830928571 0.0025 0.073 8180242321 282077321 0.000 0.00 0.00 0.0000 0.000 0.00 0.0000 0 0 0.0025 0.003 0 0 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 3753778000 62562966667 0.0025 0.063 3910185417 156407417 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 976690000 16278166667 0.0025 0.063 1017385417 40695417 0.000 0.00 0.00 0.0000 0.000 0.00

Best Case: Sales Tax (0.5% State Increase, 0.75% Local Increase)

Source: State Sales Tax Revenue < http://www.census.gov/govs/state/ > State_ Current_Sales_State_Sales_ Current_GS_Tax_ Current_Sales_ Prop_State Add_State Local_Sales_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/11taxfacts.pdf > Current_GS_Tax_ Incr_Local_ < New_Loc_ Prop_Local_ Add_Local_Incr_State_ New_State_ To_HSR_ Amt_HSR Current_GS_Tax_ To_HSR_ Amt_HSR_ State_Name _RevTot_Rev_All Rev_Local Rate Rev_State State Rev Tax_Rate TaxAddl_Tax_All _Rev State Tax_State Tax_Rate Rev Rev Tax Rates (2012) http://www.taxadmin.org/fta/rate/sales.pdf >Tot_Tax_All Rev_Local Abbr Sales Tax Local Local LocalTo_HSR_Tot To_OtherTax Local Tax_Rate < Rev RI 0.00 Local RhodeSales Island 798481000 0.0011406871429 0.005 0.075 570343570.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 Tax 0.00 Revenue 0.0700 > 826998179 0.0000 < http://www.www.picapa.org/ﬁlestream.aspx?ﬁle=CitizensGuideBudget112011.pdf 0.000 0.00 798481000 28517179855515357 7129295 0.25 7129295 21387884 CT 0.00 Connecticut 0.00 0.0635 3145579000 0.0052426316667 0.005 0.069 3591202692 4456236920.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 > 0.0000 < http://www.nbcnewyork.com/news/local/NY-Sales-Tax-Collection-Rise-Economic-Recovery-Revenue-139901863.html 0.000 0.00 3145579000 314557900 3460136900 78639475 0.25 78639475 235918425 MA 0.00 Massachusetts 0.00 0.0625 4625682000 0.0074010912000 0.005 0.068 4995736560 3700545600.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.0000 0.000 0.00 4625682000 185027280 4810709280 46256820 0.25 46256820 138770460 NY New133333333333 York 0 10568466000 264211650000 0.005 0 11889524250 1321058250 0 165132281 0 6000000000 0.0075 0 7000000000 100000 6000000000 0.0050 0 6666666667 666666667 16568466000 1327195792 17895661792 0 166666667133333333333 331798948 995396844 PA Pennsylvania 0 8029797000 133829950000 0.005 0 8698946750 669149750 0 0 248600000 0.0075 0 341825000 9322 248600000 12430000000 0.0050 0 310750000 62150000 8278397000 396724875 8675121875 83643719 0 15537500 12430000000 99181219 297543656 NJ 0.00 New Jersey 0.00 0.0700 7898165000 0.00 112830928571 0.005 0.075 8462319643 5641546430.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.0000 0.000 0.00 7898165000 282077321 8180242321 70519330 0.25 70519330 211557991 DE 0.00 Delaware 0.0000 0 0.00 0 0.005 0 0.005 0 00.25 0.000 0 0.00 0.00 0.00 0 0.0000 0 0.000 0.00 0.00 0.0000 0.000 0.00 0 0 0.25 3753778000 0.0062562966667 0.005 0.065 4066592833 3128148330.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 MD 0.00 Maryland 0.0600 0.00 0.0000 0.000 0.00 3753778000 156407417 3910185417 39101854 0.25 39101854 117305563 DC 0.00 DC 0.0600 976690000 0.0016278166667 0.005 0.065 1058080833 813908330.25 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 0.0000 0.000 0.00 976690000 40695417 1017385417 10173854 0.25 10173854 30521563 SUM 682800795 2048402385

Source: State Sales Tax Revenue Sales Tax Rates (2012) Local Sales Tax Revenue

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196

tate Local_Sales_ Tax 6871 0.000 8425 0.000 0912 0.000 1650 0 9950 0 0929 0.000 0 0.000 2967 0.000 8167 0.000

Penndesign 2012 studio report

B-4 Sales Tax Scenarios: Conservative Case Conservative Case: Sales Tax (0.10% State Increase, 0.25% Local Increase)

State_ Abbr RI CT MA NY PA NJ DE MD DC SUM

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Delaware Maryland DC

State_Sales_ Current_GS_Tax_ Current_Sales_ Incr_State_ New_State_ Prop_State Add_State Local_Sales_ Current_GS_Tax_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo Rate Rev_State State Tax_Rate Tax _Rev _Rev Tax Rev_Local Local Tax_Rate Tax Rev Rev 0.0700 798481000 11406871429 0.0010 0.071 809887871 11406871 0.000 0.00 0.00 0.0000 0.000 0.00 0.0635 3145579000 52426316667 0.0010 0.065 3381497425 235918425 0.000 0.00 0.00 0.0000 0.000 0.00 0.0625 4625682000 74010912000 0.0010 0.064 4699692912 74010912 0.000 0.00 0.00 0.0000 0.000 0.00 0 10568466000 264211650000 0.0010 0 10832677650 264211650 0 6000000000 133333333333 0.0025 0 6333333333 33333 0 8029797000 133829950000 0.0010 0 8163626950 133829950 0 248600000 12430000000 0.0025 0 279675000 3107 0.0700 7898165000 112830928571 0.0010 0.071 8010995929 112830929 0.000 0.00 0.00 0.0000 0.000 0.00 0.0000 0 0 0.0010 0.001 0 0 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 3753778000 62562966667 0.0010 0.061 3816340967 62562967 0.000 0.00 0.00 0.0000 0.000 0.00 0.0600 976690000 16278166667 0.0010 0.061 992968167 16278167 0.000 0.00 0.00 0.0000 0.000 0.00

Conservative Case: Sales Tax (0.10% State Increase, 0.25% Local Increase)

Source: State Sales Tax Revenue < http://www.census.gov/govs/state/ > State_ State_Sales_ Current_GS_Tax_ Current_Sales_ Incr_State_ New_State_ Prop_State Add_State Local_Sales_ Current_GS_Tax_ Current_Sales_ Incr_Local_ New_Loc_ Prop_Local_ Add_Lo http://cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/11taxfacts.pdf > Current_GS_Tax_ Current_Sales_ Incr_Local_ <New_Loc_ Prop_Local_ Add_Local_ To_HSR_ Amt_HSR To_HSR_ Amt_HSR_ State_Name _Rev Rev_Local Abbr Sales Rate Rev_State State Tax_Rate Tax _Rev Tax Local Tax_Rate Tax Rev Rev Tax Rates (2012) http://www.taxadmin.org/fta/rate/sales.pdf >Tot_Tax_All Rev_Local Rev Addl_Tax_All Tot_Rev_All State _State Local Local To_HSR_Tot To_Other Local Tax_Rate <Tax Rev RI Rhode Island 0.0700 798481000 11406871429 0.0010 0.071 809887871 11406871 0.000 0.00 0.00 0.0000 0.000 0.00 Revenue 0.00 Local Sales Tax 0.00 0.0000 < http://www.www.picapa.org/ﬁlestream.aspx?ﬁle=CitizensGuideBudget112011.pdf 0.000 0.00 0.00 798481000 11406871 > 809887871 0.25 2851718 0.25 0.00 2851718 8555154 CT Connecticut 0.0635 < http://www.nbcnewyork.com/news/local/NY-Sales-Tax-Collection-Rise-Economic-Recovery-Revenue-139901863.html 3145579000 52426316667 0.0010 0.065 3381497425 235918425 0.000 0.00 0.00 0.0000 0.000 0.00 > 0.00 0.00 0.0000 0.000 0.00 0.00 3145579000 235918425 3381497425 0.25 58979606 0.25 0.00 58979606 176938819 MA Massachusetts 0.0625 4625682000 74010912000 0.0010 0.064 4699692912 74010912 0.000 0.00 0.00 0.0000 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 4625682000 74010912 4699692912 0.25 18502728 0.25 0.00 18502728 55508184 NY New York 0 10568466000 264211650000 0.0010 0 10832677650 264211650 0 6000000000 133333333333 0.0025 0 6333333333 33333 6000000000 133333333333 0.0025 0 6333333333 333333333 16568466000 597544983 17166010983 0 66052913 0 83333333 149386246 448158738 PA Pennsylvania 0 8029797000 133829950000 0.0010 0 8163626950 133829950 0 248600000 12430000000 0.0025 0 279675000 3107 248600000 12430000000 0.0025 0 279675000 31075000 8278397000 164904950 8443301950 0 33457488 0 7768750 41226238 123678713 NJ New Jersey 0.0700 7898165000 112830928571 0.0010 0.071 8010995929 112830929 0.000 0.00 0.00 0.0000 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 7898165000 112830929 8010995929 0.25 28207732 0.25 0.00 28207732 84623196 DE Delaware 0.0000 0 0 0.0010 0.001 0 0 0.000 0.00 0.00 0.0000 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 0 0 0 0.25 0 0.25 0.00 0 0 3753778000 62562966667 0.0010 0.061 3816340967 62562967 0.000 0.00 0.00 0.0000 0.000 0.00 MD Maryland 0.0600 0.00 0.00 0.0000 0.000 0.00 0.00 3753778000 62562967 3816340967 0.25 15640742 0.25 0.00 15640742 46922225 DC DC 0.0600 976690000 16278166667 0.0010 0.061 992968167 16278167 0.000 0.00 0.00 0.0000 0.000 0.00 0.00 0.00 0.0000 0.000 0.00 0.00 976690000 16278167 992968167 0.25 4069542 0.25 0.00 4069542 12208625 SUM 318864551 956593653

Source: State Sales Tax Revenue Sales Tax Rates (2012) Local Sales Tax Revenue

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197

198

State_Abbr RI CT MA NY PA NJ DE MD DC

Total_Gas Total_Sales Totall_All 16,690,100.00 14,258,589.29 30948689 75,839,150.00 111,405,922.92 187245073 138,188,050.00 92,513,640.00 230701690 280,116,300.00 580,264,562.50 860380863 248,460,800.00 190,593,687.50 439054488 209,207,600.00 141,038,660.71 350246261 21,660,150.00 21660150 127,118,550.00 78,203,708.33 205322258 6,195,200.00 20,347,708.33 26542908 1,123,475,900.00 1,228,626,479.58

Total_Gas Total_Sales Totall_All 12,517,575.00 7,129,294.64 19646870 56,879,362.50 78,639,475.00 135518838 103,641,037.50 46,256,820.00 149897858 210,087,225.00 331,798,947.92 541886173 186,345,600.00 99,181,218.75 285526819 156,905,700.00 70,519,330.36 227425030 16,245,112.50 16245113 95,338,912.50 39,101,854.17 134440767 4,646,400.00 10,173,854.17 14820254 842,606,925.00 682,800,795.00

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Deleware Maryland Washington D.C SUM

Total_Gas Total_Sales Totall_All 4,172,525.00 2,851,717.86 7024243 18,959,787.50 58,979,606.25 77939394 34,547,012.50 18,502,728.00 53049741 70,029,075.00 149,386,245.83 219415321 62,115,200.00 41,226,237.50 103341438 52,301,900.00 28,207,732.14 80509632 5,415,037.50 5415038 31,779,637.50 15,640,741.67 47420379 1,548,800.00 4,069,541.67 5618342 280,868,975.00 318,864,550.92

Conservative CaseTax Scenario

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Deleware Maryland Washington D.C SUM

Moderate Case Tax Scenario

State_Name Rhode Island Connecticut Massachusetts New York Pennsylvania New Jersey Deleware Maryland Washington D.C SUM

Best Case Tax Scenario

Perc_Gas 0.594017759 0.243263215 0.651219255 0.319162193 0.601067699 0.649635312 1 0.670168355 0.275668532

Perc_Gas 0.637128216 0.419715543 0.691411066 0.387696228 0.652637818 0.68992274 1 0.709151806 0.31351689

Perc_Gas 0.539282935 0.405026145 0.598990194 0.325572444 0.565899694 0.597315727 1 0.619117241 0.23340321

Perc_Sales Total_Total_Gas Total_Total_Sales Total_Total_Income 0.405982241 280,868,975 318,864,550.92 599,733,526 0.756736785 280,868,975 318,864,550.92 599,733,526 0.348780745 280,868,975 318,864,550.92 599,733,526 0.680837807 280,868,975 318,864,550.92 599,733,526 0.398932301 280,868,975 318,864,550.92 599,733,526 0.350364688 280,868,975 318,864,550.92 599,733,526 0 280,868,975 318,864,550.92 599,733,526 0.329831645 280,868,975 318,864,550.92 599,733,526 0.724331468 280,868,975 318,864,550.92 599,733,526

Perc_Sales Total_Total_Gas Total_Total_Sales Total_Total_Income 0.362871784 842,606,925 682,800,795.00 1,525,407,720 0.580284457 842,606,925 682,800,795.00 1,525,407,720 0.308588934 842,606,925 682,800,795.00 1,525,407,720 0.612303772 842,606,925 682,800,795.00 1,525,407,720 0.347362182 842,606,925 682,800,795.00 1,525,407,720 0.31007726 842,606,925 682,800,795.00 1,525,407,720 0 842,606,925 682,800,795.00 1,525,407,720 0.290848194 842,606,925 682,800,795.00 1,525,407,720 0.68648311 842,606,925 682,800,795.00 1,525,407,720

Perc_Sales Total_Total_Gas Total_Total_Sales Total_Total_Income 0.460717065 1,123,475,900 1228626480 2,352,102,380 0.594973855 1,123,475,900 1228626480 2,352,102,380 0.401009806 1,123,475,900 1228626480 2,352,102,380 0.674427556 1,123,475,900 1228626480 2,352,102,380 0.434100306 1,123,475,900 1228626480 2,352,102,380 0.402684273 1,123,475,900 1228626480 2,352,102,380 0 1,123,475,900 1228626480 2,352,102,380 0.380882759 1,123,475,900 1228626480 2,352,102,380 0.76659679 1,123,475,900 1228626480 2,352,102,380

Penndesign 2012 studio report

B-5 Gas & Sales Tax Scenario Summaries: Best, Moderate, and Conservative Cases

Penndesign 2012 studio report

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Penndesign 2012 studio report

B-6 HSR Ridership & Revenue HIGH-SPEED RAIL PASSENGERS Year Existing Amtrak 2011 Studio Difference HSR (2011 Studio)

2010 1 13,000,000 13,000,000 -

2011 2 13,500,000 13,500,000 -

2012 3 14,000,000 14,000,000 -

2013 4 14,500,000 14,500,000 -

2014 5 15,000,000 15,000,000 -

2015 6 15,500,000 15,500,000 -

Year Existing Amtrak 2012 Studio Difference HSR (2012 Studio)

2010 1 13,000,000 13,000,000 -

2011 2 13,500,000 13,500,000 -

2012 3 14,000,000 14,000,000 -

2013 4 14,500,000 14,500,000 -

2014 5 15,000,000 15,000,000 -

2015 6 15,500,000 15,500,000 -

9.8236% 2013 2025 416 14,500,000 20,500,000 14,500,000 24,424,077 3,924,077

2014 2026 517 15,000,000 21,000,000 15,000,000 26,823,401 5,823,401

2015 2027 618 15,500,000 21,500,000 15,500,000 29,458,424 7,958,424

16, 22 16, 32 10

4.91% 2013 2025 416 14,500,000 20,500,000 14,500,000 20,982,000 482,000

2014 2026 517 15,000,000 21,000,000 15,000,000 22,012,216 1,012,216

2015 2027 618 15,500,000 21,500,000 15,500,000 23,093,016 1,593,016

16, 22 16, 24 2

2025 440,227 69,335,700

2026 924,491 145,607,300

2027 1,454,955 229,155,354

16, 16,

Year TOTAL HSR RIDERSHIP TOTAL HSR RIDERSHIP REVENUE

HIGH-SPEED RAIL 4.91%PASSENGERS 2019 2020 2021 10Year 11 12 17,500,000Existing Amtrak 18,000,000 18,500,000 17,500,0002011 Studio 18,359,250 19,260,689 (2011 Studio) 760,689 - Difference HSR 359,250

2018 9 00,000 00,000 -

HIGH-SPEED RAIL PASSENGERS 2010 2011 2012 2022 2023 2024 1 2 3 15 13 Year 14 Amtrak 13,000,000 13,500,000 14,000,000 20,000,000 19,000,000 Existing 19,500,000 13,000,000 13,500,000 14,000,000 22,239,370 20,206,389 2011 Studio 21,198,523 Difference HSR - (2011 Studio) 2,239,370 1,206,389 1,698,523

Phase 1

2018 9 00,000 00,000 2018 -

2010 2011 2012 2022 2023 2024 1 2 3 15 13 Year 14 Amtrak 13,000,000 13,500,000 14,000,000 20,000,000 19,000,000 Existing 19,500,000 13,000,000 13,500,000 14,000,000 20,000,000 19,000,000 2012 Studio 19,500,000 Difference HSR -- -(2012 Studio) --

2019 2020 2021 10Year 11 12 17,500,000Existing Amtrak 18,000,000 18,500,000 17,500,0002012 Studio 18,000,000 18,500,000 Studio) - Difference HSR (2012 -

2030 21 3,000,000 9,020,833 6,020,833

DC to PHL 9.8236% 2030 21 3,000,000 7,913,231 4,913,231

2030 4,501,171 6,988,194

2019Year 2020 2021 TOTAL HSR RIDERSHIP HSR RIDERSHIP - TOTAL $ $ REVENUE-

HIGH-SPEED RAIL PASSENGERS 2031 2032 2033 Year 22 23 24 Existing Amtrak 23,506,000 24,023,132 24,551,641 2011 Studio 47,063,897 42,854,084 51,687,267 Difference HSR (2011 Studio) 27,135,626 19,348,084 23,040,765

2022 Year 2023 2024 TOTAL HSR RIDERSHIP TOTAL HSR RIDERSHIP REVENUE $ $ -

20102034 1 25 25,091,777 13,000,000 13,000,000 56,764,817 31,673,040

2.5232% 20112035 2 26 13,500,000 25,643,796 13,500,000 58,202,272 32,558,476

20122036 3 27 14,000,000 26,207,960 14,000,000 59,670,716 33,462,756

20132037 4 28 14,500,000 26,784,535 14,500,000 61,176,208 34,391,673

20142038 5 29 15,000,000 27,373,794 15,000,000 62,719,684 35,345,889

20152039 6 30 15,500,000 27,976,018 15,500,000 64,302,101 36,326,083

20122036 3 27 14,000,000 26,207,960 14,000,000 48,976,096 22,768,136

20132037 4 28 14,500,000 26,784,535 14,500,000 53,787,311 27,002,777

20142038 5 29 15,000,000 27,373,794 15,000,000 59,071,162 31,697,367

20152039 6 30 15,500,000 27,976,018 15,500,000 64,874,076 36,898,058

2 320

16, 16,

Phase 3 NY Boston 2031 2032 2033 Year 22 23 24 Existing Amtrak 23,506,000 24,023,132 24,551,641 2012 Studio 33,666,770 30,655,315 36,974,059 Difference HSR (2012 Studio) 12,422,418 7,149,315 9,643,638 Year 2031 2032 2033 TOTAL HSR 8,834,852 RIDERSHIP 6,549,721 11,380,583 TOTAL RIDERSHIP$REVENUE $ 1,217,913,924 $ HSR 1,642,831,748 2,116,207,845

200

20102034 1 25 13,000,000 25,091,777 13,000,000 40,606,243 15,514,466

2034 14,213,309 $ 2,642,950,316

20112035 2 26 13,500,000 25,643,796 13,500,000 44,595,238 18,951,442

2035 17,332,704 $ 3,037,895,940

2036 20,823,395 $ 3,649,707,969

2037 24,696,333 $ 4,328,516,351

2038 28,989,935 $ 5,081,054,219

2039 33,746,409 $ 5,914,719,475

16, 16,

Penndesign 2012 studio report

2014 5 15,000,000 15,000,000 -

2015 6 15,500,000 15,500,000 -

2016 7 16,000,000 16,000,000 -

2017 8 16,500,000 16,500,000 -

2018 9 17,000,000 17,000,000 -

2019 10 17,500,000 17,500,000 -

4.91% 2020 11 18,000,000 18,359,250 359,250

2021 12 18,500,000 19,260,689 760,689

2022 13 19,000,000 20,206,389 1,206,389

2023 14 19,500,000 21,198,523 1,698,523

2014 5 15,000,000 15,000,000 -

2015 6 15,500,000 15,500,000 -

2016 7 16,000,000 16,000,000 -

2017 8 16,500,000 16,500,000 -

2018 9 17,000,000 17,000,000 -

2019 10 17,500,000 17,500,000 -

2020 11 18,000,000 18,000,000 -

2021 12 18,500,000 18,500,000 -

2022 13 19,000,000 19,000,000 -

2023 14 19,500,000 19,500,000 -

2017 $

6% 025 16 00 77 77

2026 17 21,000,000 26,823,401 5,823,401

1% 025 16 00 00 00

25 27 00

2027 18 21,500,000 29,458,424 7,958,424

2026 17 21,000,000 22,012,216 1,012,216

2026 924,491 145,607,300

2028 19 22,000,000 32,352,302 10,352,302

2027 18 21,500,000 23,093,016 1,593,016

2027 1,454,955 229,155,354

2029 20 22,500,000 35,530,463 13,030,463

2028 19 22,000,000 24,226,883 2,226,883 2028 2,033,887 320,337,134

2018

2029 20 22,500,000 25,416,423 2,916,423

2029 2,663,666 419,527,457

2019 $

2030 21 23,000,000 39,020,833 16,020,833

Phase 2 DC to PHL 9.8236% 2030 21 23,000,000 27,913,231 4,913,231

2030 4,501,171 836,988,194

2020 $

2031 22 23,506,000 42,854,084 19,348,084

2021 $

2032 23 24,023,132 47,063,897 23,040,765

2022 $

2033 24 24,551,641 51,687,267 27,135,626

2023 $

2034 25 25,091,777 56,764,817 31,673,040

2.5

25,643 58,202 32,558

Phase 3 NY B 2031 22 23,506,000 30,655,315 7,149,315 2031 6,549,721 $ 1,217,913,924

2032 23 24,023,132 33,666,770 9,643,638 2032 8,834,852 $ 1,642,831,748

2033 24 24,551,641 36,974,059 12,422,418 2033 11,380,583 $ 2,116,207,845

2034 25 25,091,777 40,606,243 15,514,466 2034 14,213,309 $ 2,642,950,316

25,643 44,595 18,951

17,332 $ 3,037,895

HIGH-SPEED RAIL PASSENGERS 037 2038 2039 28Year 29 30 Amtrak 35 Existing27,373,794 27,976,018 08 2011 Studio 62,719,684 64,302,101 HSR (2011 Studio) 73 Difference 35,345,889 36,326,083

2.6212% 2040 31 28,591,490 65,987,587.80 37,396,097

2041 32 29,220,503 67,717,254.45 38,496,751

2042 33 29,863,354 69,492,259.13 39,628,905

2043 34 30,520,348 71,313,790.22 40,793,442

2044 35 31,191,796 73,183,067.29 41,991,272

1.75% 2045 36 31,878,015 74,461,868 42,583,853

2046 37 32,579,332 75,764,951 43,185,619

33,296 77,090 43,794

037 2038 2039 28Year 29 30 Amtrak 35 Existing27,373,794 27,976,018 11 2012 Studio 59,071,162 64,874,076 HSR (2012 Studio) 77 Difference 31,697,367 36,898,058

2.5232% 2040 31 28,591,490 66,510,998.55 37,919,508

2041 32 29,220,503 68,189,224.02 38,968,721

2042 33 29,863,354 69,909,794.98 40,046,441

2043 34 30,520,348 71,673,779.90 41,153,432

2044 35 31,191,796 73,482,274.22 42,290,479

2.62% 2045 36 31,878,015 75,408,392 43,530,376

2046 37 32,579,332 77,384,996 44,805,665

33,296 79,413 46,117

37 Year 2038 2039 HSR RIDERSHIP 33,746,409 33 TOTAL 28,989,935 HSR RIDERSHIP REVENUE 51 TOTAL $ 5,081,054,219 $ 5,914,719,475

201

2040 34,680,612 $ 6,078,456,785

2041 2042 2043 2044 2045 35,640,206 36,625,872 37,638,310 38,678,235 39,812,227 $ 6,246,644,460 $ 6,419,401,811 $ 6,596,851,309 $ 6,779,118,678 $ 6,977,872,986

2046 40,978,587 42,178 $ 7,182,300,363 $ 7,392,559

Penndesign 2012 studio report

B-6 HSR Ridership & Revenue

2042 33 ,863,354 2,259.13 ,628,905

HIGH-SPEED RAIL PASSENGERS 1.75% 2043 2044 2045 Year 34 35 36 Existing Amtrak 30,520,348 31,191,796 31,878,015 2011 Studio 71,313,790.22 73,183,067.29 74,461,868 Difference HSR (2011 Studio) 42,583,853 40,793,442 41,991,272

2010 2046 1 37 13,000,000 32,579,332 13,000,000 75,764,951 43,185,619

2011 2047 2 38 13,500,000 33,296,077 13,500,000 77,090,838 43,794,761

2012 2048 3 39 14,000,000 34,028,590 14,000,000 78,439,927 44,411,337

2013 2049 4 40 14,500,000 34,777,219 14,500,000 79,812,626 45,035,406

2014 2050 5 41 15,000,000 35,542,318 15,000,000 81,209,347 45,667,029

2015 2051 6 42 15,500,000 36,324,249 15,500,000 82,630,510 46,306,261

2042 33 ,863,354 9,794.98 ,046,441

2.62% 2043 2044 2045 Year 34 35 36 Existing Amtrak 30,520,348 31,191,796 31,878,015 2012 Studio 71,673,779.90 73,482,274.22 75,408,392 Difference HSR (2012 Studio) 43,530,376 41,153,432 42,290,479

2010 2046 1 37 13,000,000 32,579,332 13,000,000 77,384,996 44,805,665

2011 2047 2 38 13,500,000 33,296,077 13,500,000 79,413,412 46,117,335

2012 2048 3 39 14,000,000 34,028,590 14,000,000 81,494,996 47,466,406

2013 2049 4 40 14,500,000 34,777,219 14,500,000 83,631,143 48,853,924

1.75% 2014 2050 5 41 15,000,000 35,542,318 15,000,000 85,092,514 49,550,195

2015 2051 6 42 15,500,000 36,324,249 15,500,000 86,579,420 50,255,171

Year 2042 2043 2044 2045 2046 2047 TOTAL HSR RIDERSHIP ,625,872 37,638,310 38,678,235 39,812,227 40,978,587 42,178,221 TOTAL RIDERSHIP$ REVENUE ,401,811 $ 6,596,851,309 $ HSR 6,779,118,678 6,977,872,986 $ 7,182,300,363 $ 7,392,559,704

GERS

VENUE

2048 43,412,060 $ 7,608,814,295

2049 44,681,063 $ 7,831,231,929

2050 45,317,863 $ 7,942,843,551

2051 45,962,623 $ 8,055,850,386

HIGH-SPEED RAIL PASSENGERS 2055 2056 2057 Year 46 47 48 Existing Amtrak 39,627,825 40,499,637 41,390,629 2011 Studio90,118,203 88,568,259 91,695,272 Difference HSR (2011 Studio) 50,304,643 48,940,434 49,618,567

2058 2010 1 49 42,301,222 13,000,000 93,299,939 13,000,000 50,998,717 -

2059 2011 2 50 43,231,849 13,500,000 94,932,688 13,500,000 51,700,839 -

2060 2012 3 51 44,182,950 14,000,000 96,594,010 14,000,000 52,411,060 -

2061 2013 4 52 45,154,975 14,500,000 98,284,405 14,500,000 53,129,430 -

2062 2014 5 53 46,148,384 15,000,000 100,004,382 15,000,000 53,855,998 -

2063 2015 6 54 47,163,649 15,500,000 101,754,459 15,500,000 54,590,810 -

2055 2056 2057 Year 46 47 48 Existing Amtrak 39,627,825 40,499,637 41,390,629 2012 Studio94,412,886 92,791,449 96,062,657 Difference HSR (2012 Studio) 54,672,028 53,163,624 53,913,250

2058 2010 1 49 42,301,222 13,000,000 97,741,256 13,000,000 55,440,034 -

2059 2011 2 50 43,231,849 13,500,000 99,449,187 13,500,000 56,217,337 -

2060 2012 3 51 44,182,950 14,000,000 101,186,962 14,000,000 57,004,012 -

2061 2013 4 52 45,154,975 14,500,000 102,955,103 14,500,000 57,800,128 -

2062 2014 5 53 46,148,384 15,000,000 104,754,140 15,000,000 58,605,756 -

2063 2015 6 54 47,163,649 15,500,000 106,584,614 15,500,000 59,420,965 -

2055 2056 2057 Year TOTAL HSR RIDERSHIP 48,622,651 49,308,247 50,002,215 TOTAL RIDERSHIP$REVENUE $ 8,522,072,327 $ HSR 8,642,236,518 8,763,867,947

202

2058 50,704,620 $ 8,886,978,337

2059 51,415,531 $ 9,011,579,310

2060 52,135,011 $ 9,137,682,379

2061 52,863,127 $ 9,265,298,937

2062 53,599,942 $ 9,394,440,250

2063 54,345,521 $ 9,525,117,447

16, 16,

$ 8,1

16, 16,1

$ 9,6

Penndesign 2012 studio report

49 40 19 26 06

2050 41 35,542,318 81,209,347 45,667,029

2051 42 36,324,249 82,630,510 46,306,261

HIGH-SPEED RAIL PASSENGERS 2052 2053 2054 43Year 44 45 Amtrak 37,123,383 Existing37,940,097 38,774,779 84,076,544 2011 Studio 85,547,884 87,044,972 HSR (2011 Studio) 46,953,162 Difference 47,607,787 48,270,193

2055 46 39,627,825 88,568,259 48,940,434

2056 47 40,499,637 90,118,203 49,618,567

2057 48 41,390,629 91,695,272 50,304,643

2058 49 42,301,222 93,299,939 50,998,717

43,231 94,932 51,700

49 40 19 43 24

1.75% 2050 41 35,542,318 85,092,514 49,550,195

2051 42 36,324,249 86,579,420 50,255,171

2052 2053 2054 43Year 44 45 Amtrak 37,123,383 Existing37,940,097 38,774,779 88,092,309 2012 Studio 89,631,634 91,197,857 HSR (2012 Studio) 50,968,926 Difference 51,691,537 52,423,078

2055 46 39,627,825 92,791,449 53,163,624

2056 47 40,499,637 94,412,886 53,913,250

2057 48 41,390,629 96,062,657 54,672,028

2058 49 42,301,222 97,741,256 55,440,034

43,231 99,449 56,217

49 2050 2051 2052 Year 2053 2054 HSR RIDERSHIP 47,945,358 63 45,317,863 45,962,623 46,615,413 TOTAL 47,276,302 HSR RIDERSHIP REVENUE 29 $ 7,942,843,551 $ 8,055,850,386 $ 8,170,264,602 TOTAL $ 8,286,098,309 $ 8,403,363,558

61 52 5 5 0

2062 53 46,148,384 100,004,382 53,855,998

2063 54 47,163,649 101,754,459 54,590,810

2064 55 48,201,249 103,535,162 55,333,913

2065 56 49,261,677 105,347,028 56,085,351

61 52 5 3 8

2062 53 46,148,384 104,754,140 58,605,756

2063 54 47,163,649 106,584,614 59,420,965

2064 55 48,201,249 108,447,074 60,245,824

2065 56 49,261,677 110,342,078 61,080,401

1 2062 7 53,599,942 7 $ 9,394,440,250

2063 54,345,521 $ 9,525,117,447

203

2064 55,099,925 $ 9,657,341,510

2065 55,863,216 $ 9,791,123,264

2055 48,622,651 $ 8,522,072,327

2056 49,308,247 $ 8,642,236,518

2057 50,002,215 $ 8,763,867,947

2058 50,704,620 $ 8,886,978,337

51,415 $ 9,011,579

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED RAIL PASSENGERS Year Ridership New York - Philadelphia Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

1.00

Phase 2 Phase 3 31.32% 25.20%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Ridership New York - Washington, DC Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

Change in Ridership $ $

Ridership Philadelphia - Washington, DC

Current Acela Price & Revenue % of Acela Passenger Facility Charge

$ $

7.67%

Phase 3

6.17%

186.00 120% 7.50 230.70 44.70

Phase 2

5.40%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

204

156.30 32.30

Change in Ridership

Ridership BWI - New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

124.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

210.30 41.30

Change in Ridership

Ridership Baltimore - New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

169.00 120% 7.50

Phase 2 Phase 3 14.18% 11.41%

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

157.50 32.50

Phase 2 Phase 3 35.21% 28.32%

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

125.00 120% 7.50

186.00 120% 7.50 230.70 45

Phase 3

4.34%

2010 1

2011 2

2012 3

10 1

Penndesign 2012 studio report

2011 2

2012 3

205

2013 4

2014 5

2015 6

2016 7

2017 8

2018 9

2019 10

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment 2013 4

HIGH-SPEED RAIL 2014 2015PASSENGERS2016 5Year 6 7 Ridership New York - Philadelphia Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

2017 2018 8 9 Phase 2 Phase 3 1.00 31.32% 25.20%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Ridership New York - Washington, DC Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

Change in Ridership $ $

Ridership Philadelphia - Washington, DC

Current Acela Price & Revenue % of Acela Passenger Facility Charge

$ $

7.67%

Phase 3

6.17%

186.00 120% 7.50 230.70 44.70

Phase 2

5.40%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

206

156.30 32.30

Change in Ridership

Ridership BWI - New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

124.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

210.30 41.30

Change in Ridership

Ridership Baltimore - New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

169.00 120% 7.50

Phase 2 Phase 3 14.18% 11.41%

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

157.50 32.50

Phase 2 Phase 3 35.21% 28.32%

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

125.00 120% 7.50

186.00 120% 7.50 230.70 45

Phase 3

4.34%

2019 2010 10 1

2020 2011 11 2

2021 2012 12 3

2022 2 13

Penndesign 2012 studio report

EED RAIL 2020 PASSENGERS 2021 11 12 p New York - Philadelphia

Ridership Ridership (Elasticity)

cela Price & Revenue cela nger Facility Charge

2022 13

2023 14

2024 15

2025 16

1.00

2027 18

2028 19

2029 20

100% 482,000 440,227 (41,773) 60,250,000 $

1,012,216 924,491 (87,725) 126,527,025 $

1,593,016 1,454,955 (138,061) 199,127,002 $

2,226,883 2,033,887 (192,997) 278,360,388 $

2,916,423 2,663,666 (252,757) 364,552,883 $

$ $

69,335,700 9,085,700

145,607,300 19,080,275

229,155,354 30,028,352

320,337,134 41,976,746

419,527,457 54,974,575

Change in Ridership

Price & Revenue (Elasticity) Change in Revenue

2026 17

$ $

p New York - Washington, DC

Ridership Ridership (Elasticity)

cela Price & Revenue cela nger Facility Charge

Change in Ridership

Price & Revenue (Elasticity) Change in Revenue

$ $

p Philadelphia - Washington, DC

Ridership Ridership (Elasticity)

cela Price & Revenue cela nger Facility Charge

Change in Ridership

Price & Revenue (Elasticity) Change in Revenue

p Baltimore - New York

Ridership Ridership (Elasticity)

cela Price & Revenue cela nger Facility Charge

Change in Ridership

Price & Revenue (Elasticity) Change in Revenue

p BWI - New York

Ridership Ridership (Elasticity)

cela Price & Revenue cela nger Facility Charge

Change in Ridership

Price & Revenue (Elasticity) Change in Revenue

207

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment 2023 14

HIGH-SPEED 2024 RAIL PASSENGERS 2025 2026 2027 2028 Year 15 16 17 18 19 Ridership New York - Philadelphia Phase 2 Phase 3 1.00 31.32% 25.20% 100% Expected Ridership 482,000 1,012,216 1,593,016 2,226,883 Expected Ridership (Elasticity) 440,227 924,491 1,454,955 2,033,887 Ridership (41,773) Change in(87,725) (138,061) (192,997) Current Acela$Price60,250,000 & Revenue $ 125.00 $ 126,527,025 $ $ 199,127,002 278,360,388 $ % of Acela 120% Passenger Facility Charge $ 7.50 Proposed Price (Elasticity) 157.50 $ & Revenue 69,335,700 $ 145,607,300 $ $ 229,155,354 Change in Revenue$ $ 30,028,352 32.50 $ 9,085,700 $ 19,080,275

$ $

320,337,134 41,976,746

$ $

20102029 1 20

20112030 2 21

31.32% 1,538,824 1,405,459 (133,365) 192,352,986 $

2,239,165 2,045,104 (194,061) 279,895,680 $

3,0 2,7 (2 377,5

$ $

221,359,816 29,006,830

322,103,948 42,208,269

$ $

434,4 56,9

2,517,274 2,312,218 (205,056) 425,419,270 $

3,3 3,1 (2 573,8

486,259,395 60,840,124

$ $

655,9 82,0

1,013,773 925,749 (88,024) 125,707,834 $

1,3 1,2 (1 169,5

144,694,574 18,986,739

$ $

195,1 25,6

2,916,423 2,663,666 (252,757) 364,552,883 $

419,527,457 54,974,575

20122031 3 22

Ridership New York - Washington, DC

$ $

Phase 2 Phase 3 35.21% 28.32% Expected Ridership Expected Ridership (Elasticity) Change in Ridership Current Acela Price & Revenue $ 169.00 % of Acela 120% Passenger Facility Charge $ 7.50

35.21% 1,729,949 1,589,028 (140,921) 292,361,307 $

Proposed Price & Revenue -(Elasticity) $ Change in Revenue $ -

$ $

334,172,526 41,811,219

Phase 2 Phase 3 14.18% 11.41% Expected Ridership Expected Ridership (Elasticity) Change in Ridership Current Acela Price & Revenue $ 124.00 % of Acela 120% Passenger Facility Charge $ 7.50

14.18% 696,696 636,203 (60,493) 86,390,320 $

Proposed Price & Revenue -(Elasticity) $ Change in Revenue $ -

$ $

99,438,595 13,048,276

548,352 504,425 (43,927) 101,993,557 $

7 6 ( 137,5

116,370,916 14,377,359

$ $

156,9 19,3

5 4 ( 96,8

210.30 41.30 -

$ $

Ridership Philadelphia - Washington, DC

Ridership Baltimore - New York

156.30 32.30 -

Phase 2

7.67%

Phase 3

6.17%

$ $

Change in Ridership Current Acela Price & Revenue $ % of Acela Passenger Facility Charge $

186.00 120% 7.50

7.67% 376,845 346,657 (30,188) 70,093,133 $

Proposed Price & Revenue -(Elasticity) $ Change in Revenue $ -

230.70 44.70 -

$ $

79,973,700 9,880,567

386,003 355,081 (30,922) 71,796,470 $

81,917,145 10,120,675

Expected Ridership Expected Ridership (Elasticity) -

Ridership BWI - New York

Phase 2

5.40%

Phase 3

4.34%

$ $

Change in Ridership Current Acela Price & Revenue $ % of Acela Passenger Facility Charge $

186.00 120% 7.50

5.40% 265,273 244,023 (21,250) 49,340,759 $

Proposed Price & Revenue -(Elasticity) $ Change in Revenue $ -

230.70 45 -

$ $

56,296,001 6,955,241

Expected Ridership Expected Ridership (Elasticity) -

208

$ $

110,4 13,6

Penndesign 2012 studio report

9 0

2030 21

2031 22

2032 23

2033 24

2034 25

2035 26

2036 27

2037 28

3 6 7) 3 $

31.32% 1,538,824 1,405,459 (133,365) 192,352,986 $

2,239,165 2,045,104 (194,061) 279,895,680 $

3,020,388 2,758,621 (261,767) 377,548,446 $

3,890,701 3,553,507 (337,194) 486,337,681 $

4,859,131 4,438,006 (421,125) 607,391,344 $

25.20% 4,775,763 4,361,864 (413,899) 596,970,417 $

5,737,570 5,240,314 (497,256) 717,196,286 $

6,804,700 6,214,959 (589,741) 850,587,466

7 5

$ $

221,359,816 29,006,830

322,103,948 42,208,269

434,482,751 56,934,306

559,677,403 73,339,722

698,985,959 91,594,615

686,993,556 90,023,139

825,349,486 108,153,200

978,856,056 128,268,590

35.21% 1,729,949 1,589,028 (140,921) 292,361,307 $

2,517,274 2,312,218 (205,056) 425,419,270 $

3,395,525 3,118,927 (276,598) 573,843,742 $

4,373,934 4,017,635 (356,299) 739,194,766 $

$ $

334,172,526 41,811,219

486,259,395 60,840,124

655,910,369 82,066,627

844,908,598 105,713,832

$ $

5,462,643 5,017,659 (444,985) 923,186,748 $

$ 1,055,213,670 $ 132,026,921

$ $

28.32% 5,367,048 6,447,936 7,647,186 4,929,851 5,922,690 7,024,250 (437,197) (525,246) (622,936) 907,031,166 $ 1,089,701,207 $ 1,292,374,495

$ 1,036,747,642 $ 129,716,477

$ 1,245,541,719 $ 155,840,512

$ 1,477,199,750 $ 184,825,254

14.18% 696,696 636,203 (60,493) 86,390,320 $

1,013,773 925,749 (88,024) 125,707,834 $

1,367,468 1,248,733 (118,734) 169,566,024 $

1,761,499 1,608,552 (152,947) 218,425,867 $

2,199,951 2,008,934 (191,017) 272,793,959 $

11.41% 2,162,360 1,974,606 (187,753) 268,132,579 $

2,597,844 2,372,279 (225,566) 322,132,696 $

3,081,017 2,813,498 (267,518) 382,046,086

$ $

99,438,595 13,048,276

144,694,574 18,986,739

195,177,044 25,611,020

251,416,612 32,990,744

313,996,385 41,202,426

308,630,957 40,498,378

370,787,178 48,654,482

439,749,804 57,703,718

7.67% 376,845 346,657 (30,188) 70,093,133 $

548,352 504,425 (43,927) 101,993,557 $

739,667 680,414 (59,253) 137,578,075 $

952,799 876,473 (76,326) 177,220,706 $

1,189,960 1,094,635 (95,325) 221,332,475 $

6.17% 1,169,304 1,075,634 (93,670) 217,490,536 $

1,404,794 1,292,259 (112,535) 261,291,683 $

1,666,071 1,532,606 (133,465) 309,889,266

$ $

79,973,700 9,880,567

116,370,916 14,377,359

156,971,549 19,393,474

202,202,340 24,981,634

252,532,255 31,199,780

248,148,743 30,658,207

298,124,249 36,832,566

353,572,312 43,683,046

5.40% 265,273 244,023 (21,250) 49,340,759 $

386,003 355,081 (30,922) 71,796,470 $

$ $

56,296,001 6,955,241

81,917,145 10,120,675

$ $

209

$ $

520,675 478,965 (41,710) 96,845,531 $

110,497,207 13,651,676

$ $

670,706 616,977 (53,729) 124,751,224 $

837,650 770,548 (67,102) 155,802,885 $

4.34% 822,493 756,605 (65,888) 152,983,619 $

988,137 908,980 (79,157) 183,793,502 $

1,171,921 1,078,041 (93,880) 217,977,215

142,336,582 17,585,358

177,765,390 21,962,505

174,548,711 21,565,092

209,701,660 25,908,158

248,704,025 30,726,811

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED RAIL PASSENGERS HIGH-SPEED RAIL PASSENGERS Year Year Ridership New York - Philadelphia Ridership New York - Philadelphia Phase 2 Phase 3 1.00 31.32% 25.20%1.00 Expected Ridership Expected Ridership Expected Ridership (Elasticity) Expected Ridership (Elasticity) Change in Ridership Change in Ridership Current Acela Price & Revenue Current Acela Price $ & Revenue 125.00 $ % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

20102038 1 29

20112039 2 30

20122040 3 31

7,987,737 9,298,311 9,555,716 9,8 7,295,466 8,492,457 8,727,554 8,9 (692,271) (805,854) (828,162) (8 998,467,069 $ 1,162,288,841 $ 1,194,464,508 $ 1,227,5

Proposed Price & Revenue (Elasticity)Proposed Price &$ Revenue (Elasticity) 157.50 $ 1,149,035,903 Change in Revenue $ 32.50 Change in Revenue $ 150,568,834

$ 1,337,561,998 $ 175,273,157

$ 1,374,589,756 $ 180,125,248

$ 1,412,6 $ 185,1

Ridership New York - Washington, DC Phase 2 Phase Ridership New York - Washington, DC3 35.21% 28.32% Expected Ridership Expected Ridership 8,976,694 10,449,530 10,738,805 11,0 Expected Ridership (Elasticity) Expected Ridership (Elasticity) 8,245,457 9,598,316 9,864,026 10,1 Change in Ridership Change in Ridership (731,238) (851,214) (874,778) (8 Current Acela Price & Revenue $ & Revenue 169.00 Current Acela Price $ 1,517,061,355 $ 1,765,970,595 $ 1,814,857,998 $ 1,865,0 % of Acela 120% % of Acela Passenger Facility Charge $ 7.50 Passenger Facility Charge Proposed Price & Revenue (Elasticity)Proposed Price &$ Revenue 210.30 (Elasticity) $ 1,734,019,560 Change in Revenue $ 41.30 Change in Revenue $ 216,958,205

$ 2,018,525,846 $ 252,555,251

$ 2,074,404,741 $ 259,546,743

$ 2,131,8 $ 266,7

Ridership Philadelphia - Washington, DC Phase 2- Washington, Phase 3 Ridership Philadelphia DC 14.18% 11.41% Expected Ridership Expected Ridership Expected Ridership (Elasticity) Expected Ridership (Elasticity) Change in Ridership Change in Ridership Current Acela Price & Revenue $ & Revenue 124.00 Current Acela Price $ % of Acela 120% % of Acela Passenger Facility Charge $ 7.50 Passenger Facility Charge

3,616,670 3,302,642 (314,028) 448,467,031 $

4,210,068 3,844,517 (365,552) 522,048,490 $

4,326,616 3,950,945 (375,671) 536,500,370 $

4,4 4,0 (3 551,3

Proposed Price & Revenue (Elasticity)Proposed Price &$ Revenue 156.30 (Elasticity) $ Change in Revenue $ 32.30 Change in Revenue $

516,202,878 67,735,847

600,897,979 78,849,490

617,532,651 81,032,282

$ $

634,6 83,2

$ $

Ridership Baltimore - New York

Phase- New 2 Ridership Baltimore YorkPhase 3 7.67% 6.17% Expected Ridership Expected Ridership Expected Ridership (Elasticity) Expected Ridership (Elasticity) Change in Ridership Change in Ridership Current Acela Price & Revenue $ & Revenue 186.00 Current Acela Price $ % of Acela 120% % of Acela Passenger Facility Charge $ 7.50 Passenger Facility Charge

1,955,728 1,799,059 (156,668) 363,765,326 $

2,276,610 2,094,237 (182,374) 423,449,498 $

2,339,634 2,152,211 (187,422) 435,171,860 $

2,4 2,2 (1 447,2

Proposed Price & Revenue (Elasticity)Proposed Price &$ Revenue 230.70 (Elasticity) $ Change in Revenue $ 44.70 Change in Revenue $

415,042,926 51,277,599

483,140,382 59,690,884

496,515,168 61,343,308

$ $

510,2 63,0

Ridership BWI - New York Expected Ridership Expected Ridership (Elasticity)

$ $

2 Phase 3 Ridership BWI -Phase New York 5.40% 4.34%

Expected Ridership Expected Ridership (Elasticity) Change in Ridership Change in Ridership Current Acela Price & Revenue $ & Revenue 186.00 Current Acela Price $ % of Acela 120% % of Acela Passenger Facility Charge $ 7.50 Passenger Facility Charge

1,375,666 1,265,465 (110,201) 255,873,827 $

1,601,376 1,473,093 (128,282) 297,855,887 $

1,645,707 1,513,873 (131,833) 306,101,438 $

1,6 1,5 (1 314,5

Proposed Price & Revenue (Elasticity)Proposed Price &$ Revenue 230.70 (Elasticity) $ Change in Revenue $ 45 Change in Revenue $

291,942,674 36,068,846

339,842,667 41,986,780

349,250,539 43,149,101

358,9 44,3

210

$ $

Penndesign 2012 studio report

38 29

2039 30

2040 31

2041 32

2042 33

2043 34

2044 35

2045 36

2046 37

2047 38

7 9,298,311 9,555,716 9,820,118 10,091,703 10,370,665 10,657,201 10,969,655 11,291,028 11,621,568 6 8,492,457 8,727,554 8,969,041 9,217,089 9,471,874 9,733,577 10,018,951 10,312,472 10,614,366 1) (805,854) (828,162) (851,077) (874,614) (898,791) (923,624) (950,703) (978,556) (1,007,203) 9 $ 1,162,288,841 $ 1,194,464,508 $ 1,227,514,708 $ 1,261,462,884 $ 1,296,333,105 $ 1,332,150,074 $ 1,371,206,857 $ 1,411,378,443 $ 1,452,696,055 $ 1,

3 4

$ 1,337,561,998 $ 175,273,157

$ 1,374,589,756 180,125,248 $

$ 1,412,623,925 $ 185,109,218

$ 1,451,691,487 $ 190,228,603

$ 1,491,820,137 $ 195,487,032

$ 1,533,038,306 $ 200,888,231

$ 1,577,984,851 $ 206,777,994

$ 1,624,214,312 $ 212,835,869

$ 1,671,762,620 $ 219,066,565

$ 1, $

4 10,449,530 10,738,805 11,035,942 11,341,152 11,654,652 11,976,664 12,327,803 12,688,964 13,060,429 7 9,598,316 9,864,026 10,136,959 10,417,307 10,705,269 11,001,050 11,323,585 11,655,327 11,996,532 8) (851,214) (874,778) (898,983) (923,845) (949,383) (975,614) (1,004,217) (1,033,638) (1,063,897) 5 $ 1,765,970,595 $ 1,814,857,998 $ 1,865,074,156 $ 1,916,654,692 $ 1,969,636,173 $ 2,024,056,136 $ 2,083,398,640 $ 2,144,434,964 $ 2,207,212,551 $ 2,

0 5

$ 2,018,525,846 $ 252,555,251

$ 2,074,404,741 259,546,743 $

0 2 8) 1 $

4,210,068 3,844,517 (365,552) 522,048,490 $

8 7

600,897,979 78,849,490

$ $

8 9 8) 6 $

2,276,610 2,094,237 (182,374) 423,449,498 $

6 9

483,140,382 59,690,884

$ $

6 5 1) 7 $

1,601,376 1,473,093 (128,282) 297,855,887 $

4 6

339,842,667 41,986,780

$ $

$ 2,131,802,420 $ 266,728,264

4,326,616 3,950,945 (375,671) 536,500,370 $

617,532,651 81,032,282

$ $

2,339,634 2,152,211 (187,422) 435,171,860 $

496,515,168 61,343,308

$ $

1,645,707 1,513,873 (131,833) 306,101,438 $

349,250,539 43,149,101

211

$ $

$ 2,190,759,599 $ 274,104,907

$ 2,251,318,076 $ 281,681,903

$ 2,313,520,754 $ 289,464,619

$ 2,381,349,957 $ 297,951,318

$ 2,451,115,217 $ 306,680,254

$ 2,522,870,762 $ 315,658,211

$ 2, $

4,446,331 4,060,265 (386,066) 551,345,050 $

4,569,299 4,172,556 (396,743) 566,593,062 $

4,695,607 4,287,897 (407,710) 582,255,216 $

4,825,344 4,406,369 (418,975) 598,342,607 $

4,966,816 4,535,557 (431,258) 615,885,178 $

5,112,326 4,668,434 (443,893) 633,928,468 $

5,261,988 4,805,100 (456,888) 652,486,504 $

634,619,452 83,274,402

652,170,503 85,577,441

670,198,247 87,943,031

688,715,455 90,372,849

708,907,632 93,022,454

729,676,157 95,747,688

751,037,172 98,550,669

$ $

2,404,370 2,211,762 (192,608) 447,212,834 $

2,470,865 2,272,930 (197,935) 459,580,963 $

2,539,167 2,335,760 (203,406) 472,285,015 $

2,609,323 2,400,296 (209,026) 485,333,990 $

2,685,824 2,470,669 (215,155) 499,563,306 $

2,764,510 2,543,052 (221,458) 514,198,771 $

2,845,440 2,617,498 (227,941) 529,251,761 $

510,253,479 63,040,644

524,365,061 64,784,098

538,859,919 66,574,904

553,748,322 68,414,332

569,983,451 70,420,145

586,681,981 72,483,210

603,856,892 74,605,131

$ $

1,691,242 1,555,761 (135,481) 314,571,102 $

1,738,016 1,598,787 (139,228) 323,270,888 $

1,786,059 1,642,982 (143,077) 332,206,964 $

1,835,407 1,688,377 (147,030) 341,385,659 $

1,889,218 1,737,878 (151,341) 351,394,611 $

1,944,566 1,788,791 (155,774) 361,689,249 $

2,001,492 1,841,158 (160,335) 372,277,576 $

358,914,116 44,343,014

368,840,254 45,569,366

379,035,989 46,829,025

389,508,544 48,122,885

400,928,392 49,533,781

412,674,197 50,984,948

424,755,091 52,477,515

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED 2042 RAIL PASSENGERS 2043 Year 33 34 Ridership New York - Philadelphia

2041 32

2044 35

1.00 Expected Ridership 10,370,665 9,820,118 10,091,703 10,657,201 Expected Ridership (Elasticity) 8,969,041 9,217,089 9,471,874 9,733,577 Ridership (851,077) (874,614) (898,791)Change in (923,624) Current Acela Price & Revenue $ 1,227,514,708 $ 1,261,462,884 $ 1,296,333,105 $ 1,332,150,074 % of Acela Passenger Facility Charge

$ 1,412,623,925 $ 185,109,218

Proposed Price$& Revenue (Elasticity) 157.50 $ 1,451,691,487 1,491,820,137 $ 1,533,038,306 $ 1,577,984,851 in Revenue $ 32.50 $ 190,228,603 $ 195,487,032 Change $ 200,888,231 206,777,994

Ridership New York - Washington, DC Expected Ridership 11,654,652 11,035,942 11,341,152 11,976,664 Expected Ridership (Elasticity) 10,136,959 10,417,307 10,705,269 11,001,050 Ridership (898,983) (923,845) (949,383)Change in (975,614) Current Acela Price & Revenue $ 1,865,074,156 $ 1,916,654,692 $ 1,969,636,173 $ 2,024,056,136 % of Acela Passenger Facility Charge

$ 2,131,802,420 $ 266,728,264

2010 2047 2011 2048 2012 2049 2 2045 2046 1 2 3 36 37 38 39 40 Phase 2 Phase 3 31.32% 25.20% 10,969,655 11,291,028 11,621,568 11,961,534 12,311,189 12 10,018,951 10,312,472 10,614,366 10,924,868 11,244,219 11 (950,703) (978,556) (1,007,203) (1,036,666) (1,066,970) (1 $ 1,371,206,857 125.00 $ 1,411,378,443 $ 1,452,696,055 $ 1,495,191,781 $ 1,538,898,593 $ 1,560 120% $ 7.50

Expected Ridership 4,695,607 4,569,299 4,825,344 Expected Ridership (Elasticity) 4,172,556 4,287,897 4,406,369 Ridership (396,743) (407,710)Change in (418,975) Current Acela Price & Revenue 566,593,062 $ 582,255,216 $ 598,342,607 % of Acela Passenger Facility Charge

$ $

634,619,452 83,274,402

Proposed Price$& Revenue (Elasticity) 652,170,503 670,198,247 $ 688,715,455 $ in Revenue $ 85,577,441 $ 87,943,031 Change $ 90,372,849 Ridership Baltimore - New York

$ 2,451,115,217 $ 306,680,254

$ 2,522,870,762 315,658,211 $

Phase 2 Phase 3 14.18% 11.41% 4,966,816 5,112,326 4,535,557 4,668,434 (431,258) (443,893) $ 124.00 615,885,178 $ 633,928,468 $ 120% $ 7.50

4,446,331 4,060,265 (386,066) 551,345,050 $

$ $

$ 1,671,762,620 219,066,565 $

156.30 708,907,632 32.30 93,022,454

Phase 2

7.67%

$ $

729,676,157 95,747,688

Phase 3

$ $

Expected Ridership 2,539,167 2,470,865 2,609,323 Expected Ridership (Elasticity) 2,272,930 2,335,760 2,400,296 Ridership (197,935) (203,406)Change in (209,026) Current Acela Price & Revenue 459,580,963 $ 472,285,015 $ 485,333,990 $$ % of Acela Passenger Facility Charge $

2,685,824 2,470,669 (215,155) 186.00 499,563,306 $ 120% 7.50

2,764,510 2,543,052 (221,458) 514,198,771 $

$ $

510,253,479 63,040,644

Proposed Price$& Revenue (Elasticity) 524,365,061 538,859,919 $ 553,748,322 $$ in Revenue $$ 64,784,098 $ 66,574,904 Change $ 68,414,332

230.70 569,983,451 44.70 70,420,145

586,681,981 72,483,210

Ridership BWI - New York

Phase 2

5.40%

$ $

Phase 3

$ $

Expected Ridership 1,786,059 1,738,016 1,835,407 Expected Ridership (Elasticity) 1,598,787 1,642,982 1,688,377 Ridership (139,228) (143,077)Change in (147,030) Current Acela Price & Revenue 323,270,888 $ 332,206,964 $ 341,385,659 $$ % of Acela Passenger Facility Charge $

1,889,218 1,737,878 (151,341) 186.00 351,394,611 $ 120% 7.50

1,944,566 1,788,791 (155,774) 361,689,249 $

$ $

358,914,116 44,343,014

Proposed Price$& Revenue (Elasticity) 368,840,254 379,035,989 $ 389,508,544 $$ in Revenue $$ 45,569,366 $ 46,829,025 Change $ 48,122,885

230.70 400,928,392 45 49,533,781

412,674,197 50,984,948

212

$ 1,796 $ 235

$ $

$ 2,596,672,314 $ 324,892,163

5,261,988 4,805,100 (456,888) 652,486,504 $

751,037,172 98,550,669

$ $

$ 2,672,577,139 $ 334,389,273

$ 2,710 $ 339

5,415,917 4,945,664 (470,253) 671,573,695 $

5,574,233 5,090,233 (483,999) 691,204,852 $

701

773,007,267 101,433,572

795,603,488 104,398,635

$ $

806 105

2,928,677 2,694,068 (234,609) 544,733,966 $

3,014,287 2,772,820 (241,467) 560,657,398 $

3 2

568

621,521,521 76,787,555

639,689,574 79,032,177

$ $

648 80

2,060,042 1,895,017 (165,025) 383,167,814 $

2,120,260 1,950,411 (169,849) 394,368,413 $

2 1

399

437,180,454 54,012,640

449,959,928 55,591,515

456 56

$ $

5 5

2,845,440 2,617,498 (227,941) 529,251,761 $

603,856,892 74,605,131

$ $

4.34%

1,691,242 1,555,761 (135,481) 314,571,102 $

$ $

$ 1,770,964,501 $ 232,065,908

6.17%

2,404,370 2,211,762 (192,608) 447,212,834 $

$ $

$ 1,720,666,701 $ 225,474,921

Phase 2 Phase 3 35.21% 28.32% 12,327,803 12,688,964 13,060,429 13,442,486 13,835,431 14 11,323,585 11,655,327 11,996,532 12,347,467 12,708,403 12 (1,004,217) (1,033,638) (1,063,897) (1,095,019) (1,127,028) (1 $ 2,083,398,640 169.00 $ 2,144,434,964 $ 2,207,212,551 $ 2,271,780,152 $ 2,338,187,866 $ 2,371 120% $ 7.50

Proposed Price$& Revenue (Elasticity) 210.30 $ 2,190,759,599 2,251,318,076 $ 2,313,520,754 $ 2,381,349,957 in Revenue $ 41.30 $ 274,104,907 $ 281,681,903 Change $ 289,464,619 297,951,318 Ridership Philadelphia - Washington, DC

$ 1,624,214,312 $ 212,835,869

$ $

2,001,492 1,841,158 (160,335) 372,277,576 $

424,755,091 52,477,515

$ $

Penndesign 2012 studio report

47 38

2048 39

HIGH-SPEED 2050 RAIL PASSENGERS 2051 Year 41 42 Ridership New York - Philadelphia

2049 40

2052 43

2053 44

2054 45

2055 46

2056 47

1.00 Expected Ridership 12,664,303 68 11,961,534 12,311,189 13,026,267 13,210,616 13,397,233 13,586,139 12,486,649 12,844,169 Expected Ridership 11,566,730 (Elasticity) 11,897,324 12,065,696 12,236,140 12,408,674 66 10,924,868 11,244,219 11,404,473 11,731,008 in Ridership (1,128,943) (1,144,920) (1,161,094) (1,177,465) 03) (1,036,666) (1,066,970) (1,082,176) (1,097,573) Change(1,113,161) Current Acela $Price & Revenue $ 1,605,521,176 $ 1,628,283,410 $ 1,651,326,953 $ 1,674,654,158 $ 1,698,267,366 $ 55 $ 1,495,191,781 $ 1,538,898,593 $ 1,560,831,154 1,583,037,884 % of Acela Passenger Facility Charge

20 65

$ 1,720,666,701 $ 225,474,921

$ 1,770,964,501 $ 232,065,908

Proposed Price Revenue (Elasticity) $ 1,873,828,548 $ 1,796,204,492 $ &1,821,759,997 $ 1,847,633,770 in Revenue $ 245,545,138 $ 235,373,338 $ 238,722,113 Change $ 242,112,593

$ 1,900,347,057 $ 249,020,104

$ 1,927,192,005 $ 252,537,847

$ 1,954,366,084 $ 256,098,719

$ $

Ridership New York - Washington, DC

Expected Ridership 14,232,264 14,639,043 14,846,216 15,055,938 15,268,232 29 13,442,486 13,835,431 14,032,615 14,434,400 Expected Ridership 13,072,910 (Elasticity) 13,446,553 13,636,849 13,829,488 14,024,489 32 12,347,467 12,708,403 12,889,525 13,258,580 in Ridership (1,192,490) (1,209,366) (1,226,450) (1,243,744) 97) (1,095,019) (1,127,028) (1,143,091) (1,159,354) Change(1,175,820) Current Acela $Price & Revenue $ 2,439,413,585 $ 2,473,998,306 $ 2,509,010,445 $ 2,544,453,579 $ 2,580,331,261 $ 51 $ 2,271,780,152 $ 2,338,187,866 $ 2,371,511,990 2,405,252,685 % of Acela Passenger Facility Charge

62 11

$ 2,596,672,314 $ 324,892,163

$ 2,672,577,139 $ 334,389,273

Proposed Price Revenue (Elasticity) $ 2,827,810,121 $ 2,710,667,017 $ &2,749,233,041 $ 2,788,279,365 in Revenue $ 353,811,815 $ 339,155,027 $ 343,980,356 Change $ 348,865,780

$ 2,867,829,421 $ 358,818,977

$ 2,908,341,354 $ 363,887,775

$ 2,949,349,981 $ 369,018,720

$ $

Ridership Philadelphia - Washington, DC

88 00 88) 04 $

5,415,917 4,945,664 (470,253) 671,573,695 $

5,574,233 5,090,233 (483,999) 691,204,852 $

Expected Ridership 5,734,115 5,653,677 5,815,554 Expected Ridership (Elasticity) 5,162,780 5,236,234 5,310,602 Ridership (490,897) (497,881) Change in(504,953) Current Acela $Price711,030,260 & Revenue $ $ 701,055,984 721,128,756 % of Acela Passenger Facility Charge

5,898,004 5,385,893 (512,112) 731,352,540 $

5,981,473 5,462,114 (519,359) 741,702,675 $

6,065,970 5,539,274 (526,696) 752,180,219 $

6,151,502 5,617,379 (534,122) 762,786,222 $

72 69

773,007,267 101,433,572

795,603,488 104,398,635

Proposed Price (Elasticity) 806,942,520 $ & Revenue 818,423,298 $ 830,047,057 $ in Revenue $ 105,886,537 $ 107,393,038 Change $ 108,918,301

841,815,026 110,462,487

853,728,432 112,025,757

865,788,490 113,608,271

877,996,409 115,210,187

$ $

Ridership Baltimore - New York

40 98 41) 61 $

2,928,677 2,694,068 (234,609) 544,733,966 $

3,014,287 2,772,820 (241,467) 560,657,398 $

Expected Ridership 3,100,744 3,057,247 3,144,783 Expected Ridership (Elasticity) 2,812,339 2,852,351 2,892,862 Ridership (244,909) (248,393) Change in(251,921) Current Acela $Price576,738,393 & Revenue $ 568,647,952 584,929,591 $ % of Acela Passenger Facility Charge

3,189,368 2,933,875 (255,492) 593,222,415 $

3,234,504 2,975,396 (259,108) 601,617,726 $

3,280,196 3,017,427 (262,768) 610,116,383 $

3,326,448 3,059,974 (266,473) 618,719,236 $

92 31

621,521,521 76,787,555

639,689,574 79,032,177

Proposed Price (Elasticity) 648,806,504 $ & Revenue 658,037,401 $ 667,383,259 $ in Revenue $ 80,158,552 $ 81,299,008 Change $ 82,453,668

676,845,067 83,622,652

686,423,810 84,806,084

696,120,466 86,004,083

705,936,007 87,216,771

$ $

Ridership BWI - New York

92 58 35) 76 $

2,060,042 1,895,017 (165,025) 383,167,814 $

2,120,260 1,950,411 (169,849) 394,368,413 $

Expected Ridership 2,181,074 2,150,478 2,212,051 Expected Ridership (Elasticity) 1,978,209 2,006,354 2,034,849 Ridership (172,270) (174,720) Change in(177,202) Current Acela $Price405,679,842 & Revenue $ 399,988,997 411,441,560 $ % of Acela Passenger Facility Charge

2,243,413 2,063,698 (179,714) 417,274,762 $

2,275,162 2,092,904 (182,258) 423,180,054 $

2,307,301 2,122,469 (184,832) 429,158,039 $

2,339,835 2,152,397 (187,438) 435,209,317 $

91 15

437,180,454 54,012,640

449,959,928 55,591,515

Proposed Price (Elasticity) 456,372,808 $ & Revenue 462,865,854 $ 469,439,764 $ in Revenue $ 56,383,811 $ 57,186,012 Change $ 57,998,204

476,095,234 58,820,472

482,832,956 59,652,902

489,653,618 60,495,579

496,557,905 61,348,588

$ $

213

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment

HIGH-SPEED RAIL PASSENGERS HIGH-SPEED RAIL PASSENGERS 2053 2054 2055 2056 2057 2058 2010 2011 2012 2 Year Year 44 45 46 1 47 2 48 3 49 Ridership New York -Ridership Philadelphia New York - Philadelphia Phase 2 Phase 3 1.00 1.00 31.32% 25.20% Expected Ridership Expected Ridership 13,026,267 13,210,616 13,397,233 13,586,139 13,777,351 13,970,888 14,16 Expected Ridership (Elasticity) Expected Ridership (Elasticity) 11,897,324 12,065,696 12,236,140 12,408,674 12,583,314 12,760,078 12,93 Change in Ridership Change in Ridership (1,128,943) (1,144,920) (1,161,094) (1,177,465) (1,194,037) (1,210,810) (1,22 Current Acela Price & Current Revenue Acela Price & Revenue $ 1,628,283,410 $ $1,651,326,953 125.00 $ 1,674,654,158 $ 1,698,267,366 $ 1,722,168,897 $ 1,746,361,056 $ 1,770,84 % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50 Proposed Price & Revenue (Elasticity) Proposed Price & Revenue (Elasticity) $ 1,873,828,548 $ $1,900,347,057 157.50 Change in Revenue $Change in Revenue$ $ 249,020,104 245,545,138 32.50

$ 1,927,192,005 $ 252,537,847

$ 1,954,366,084 256,098,719 $

$ 1,981,871,967 $ 259,703,070

$ 2,009,712,303 $ 263,351,247

$ 2,037,88 $ 267,04

Ridership New York -Ridership Washington, NewDC York - Washington, DC

Phase 2 Phase 3 35.21% 28.32% Expected Ridership Expected Ridership 15,483,118 15,700,617 15,92 14,639,043 14,846,216 15,055,938 15,268,232 Expected Ridership (Elasticity) 14,221,870 14,421,652 14,62 13,446,553 13,636,849 13,829,488 14,024,489 Expected Ridership (Elasticity) Change in Ridership Change (1,192,490) (1,209,366) (1,226,450) (1,243,744) (1,261,248) (1,278,965) (1,29 in Ridership Current Acela Price & Current Revenue Acela Price & Revenue $ 2,473,998,306 $ $2,509,010,445 169.00 $ 2,544,453,579 $ 2,580,331,261 $ 2,616,647,020 $ 2,653,404,356 $ 2,690,60 % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50 Proposed Price & Revenue (Elasticity) $ 2,827,810,121 $ $2,867,829,421 Proposed Price & Revenue (Elasticity) 210.30 Change in Revenue $Change 353,811,815 in Revenue$ $ 358,818,977 41.30

$ 2,908,341,354 $ 363,887,775

$ 2,949,349,981 369,018,720 $

$ 2,990,859,335 $ 374,212,315

$ 3,032,873,416 $ 379,469,060

$ 3,075,39 $ 384,78

Ridership Philadelphia - Washington, DC - Washington, DC Ridership Philadelphia

Phase 2 Phase 3 14.18% 11.41% Expected Ridership Expected Ridership 5,898,004 5,981,473 6,065,970 Expected Ridership (Elasticity) 5,385,893 5,462,114 5,539,274 Expected Ridership (Elasticity) Change in Ridership Change (512,112) (519,359) (526,696) in Ridership Current Acela Price & Current Revenue 731,352,540 $ $ 741,702,675 752,180,219 $ Acela Price & Revenue $ 124.00 $ % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

6,151,502 5,617,379 (534,122) 762,786,222 $

6,238,078 5,696,439 (541,640) 773,521,728 $

6,325,708 5,776,460 (549,248) 784,387,770 $

6,41 5,85 (55 795,38

Proposed Price & Revenue (Elasticity) $ 841,815,026 $ $ 853,728,432 Proposed Price & Revenue (Elasticity) 156.30 Change in Revenue $Change 110,462,487 in Revenue$ $ 112,025,757 32.30

877,996,409 115,210,187

890,353,391 116,831,663

902,860,626 118,472,855

$ $

915,51 120,13

3,373,264 3,103,040 (270,224) 627,427,133 $

3,420,650 3,146,630 (274,020) 636,240,913 $

3,46 3,19 (27 645,16

715,871,399 88,444,266

725,927,599 89,686,686

$ $

736,10 90,94

2,372,766 2,182,690 (190,076) 441,334,483 $

2,406,097 2,213,351 (192,747) 447,534,127 $

2,43 2,24 (19 453,80

503,546,495 62,212,012

510,620,061 63,085,935

517,77 63,97

Ridership Baltimore Ridership - New YorkBaltimore - New York

$ $

865,788,490 113,608,271

$ $

Phase 3 7.67% 6.17% Expected Ridership Expected Ridership 3,189,368 3,234,504 3,280,196 Expected Ridership (Elasticity) 2,933,875 2,975,396 3,017,427 Expected Ridership (Elasticity) Change in Ridership Change (255,492) (259,108) (262,768) in Ridership Current Acela Price & Current Revenue 593,222,415 $ $ 601,617,726 610,116,383 $ Acela Price & Revenue $ 186.00 $ % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

3,326,448 3,059,974 (266,473) 618,719,236 $

Proposed Price & Revenue (Elasticity) $ 676,845,067 $ $ 686,423,810 Proposed Price & Revenue (Elasticity) 230.70 Change in Revenue $Change 83,622,652 in Revenue$ $ 84,806,084 44.70

705,936,007 87,216,771

Ridership BWI - NewRidership York BWI - New York

Phase 2

$ $

696,120,466 86,004,083

$ $

Phase 3 5.40% 4.34% Expected Ridership Expected Ridership 2,243,413 2,275,162 2,307,301 Expected Ridership (Elasticity) 2,063,698 2,092,904 2,122,469 Expected Ridership (Elasticity) Change in Ridership Change (179,714) (182,258) (184,832) in Ridership Current Acela Price & Current Revenue 417,274,762 $ $ 423,180,054 429,158,039 $ Acela Price & Revenue $ 186.00 $ % of Acela % of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

2,339,835 2,152,397 (187,438) 435,209,317 $

Proposed Price & Revenue (Elasticity) $ 476,095,234 $ $ 482,832,956 Proposed Price & Revenue (Elasticity) 230.70 Change in Revenue $Change 58,820,472 in Revenue$ $ 59,652,902 45

496,557,905 61,348,588

214

$ $

Phase 2

$ $

489,653,618 60,495,579

$ $

Penndesign 2012 studio report

56 47

2057 48

2058 49

2059 50

2060 51

2061 52

2062 53

2063 54

2064 55

2065 56

9 13,777,351 13,970,888 14,166,769 14,365,011 14,565,632 14,768,650 14,974,083 15,181,948 15,392,261 4 12,583,314 12,760,078 12,938,982 13,120,043 13,303,277 13,488,701 13,676,329 13,866,179 14,058,265 5) (1,194,037) (1,210,810) (1,227,787) (1,244,968) (1,262,355) (1,279,950) (1,297,754) (1,315,769) (1,333,996) 6 $ 1,722,168,897 $ 1,746,361,056 $ 1,770,846,126 $ 1,795,626,369 $ 1,820,704,026 $ 1,846,081,308 $ 1,871,760,404 $ 1,897,743,471 $ 1,924,032,636

4 9

$ 1,981,871,967 $ 259,703,070

$ 2,009,712,303 263,351,247 $

$ 2,037,889,722 $ 267,043,596

$ 2,066,406,826 $ 270,780,457

$ 2,095,266,193 $ 274,562,167

$ 2,124,470,369 $ 278,389,061

$ 2,154,021,873 $ 282,261,469

$ 2,183,923,186 $ 286,179,715

$ 2,214,176,758 $ 290,144,122

15,920,750 16,143,536 16,368,996 16,597,150 16,828,017 17,061,617 17,297,970 2 15,483,118 15,700,617 14,623,853 14,828,491 15,035,585 15,245,153 15,457,214 15,671,786 15,888,885 9 14,221,870 14,421,652 4) (1,261,248) (1,278,965) (1,296,897) (1,315,045) (1,333,411) (1,351,997) (1,370,803) (1,389,832) (1,409,085) 1 $ 2,616,647,020 $ 2,653,404,356 $ 2,690,606,738 $ 2,728,257,605 $ 2,766,360,356 $ 2,804,918,358 $ 2,843,934,931 $ 2,883,413,356 $ 2,923,356,864

1 0

$ 2,990,859,335 $ 374,212,315

$ 3,032,873,416 379,469,060 $

$ 3,075,396,191 $ 384,789,453

$ 3,118,431,589 $ 390,173,984

$ 3,161,983,497 $ 395,623,141

$ 3,206,055,761 $ 401,137,403

$ 3,250,652,179 $ 406,717,247

$ 3,295,776,498 $ 412,363,142

$ 3,341,432,412 $ 418,075,549

2 9 2) 2 $

6,238,078 5,696,439 (541,640) 773,521,728 $

6,325,708 5,776,460 (549,248) 784,387,770 $

6,414,398 5,857,449 (556,949) 795,385,375 $

6,504,158 5,939,415 (564,743) 806,515,560 $

6,594,995 6,022,365 (572,630) 817,779,328 $

6,686,917 6,106,305 (580,611) 829,177,676 $

6,779,932 6,191,244 (588,688) 840,711,584 $

6,874,049 6,277,189 (596,860) 852,382,023 $

6,969,274 6,364,146 (605,128) 864,189,948

9 7

890,353,391 116,831,663

902,860,626 118,472,855

915,519,294 120,133,919

928,330,566 121,815,007

941,295,599 123,516,271

954,415,537 125,237,861

967,691,511 126,979,927

981,124,637 128,742,614

994,716,015 130,526,067

$ $

8 4 3) 6 $

3,373,264 3,103,040 (270,224) 627,427,133 $

7 1

715,871,399 88,444,266

$ $

5 7 8) 7 $

2,372,766 2,182,690 (190,076) 441,334,483 $

5 8

503,546,495 62,212,012

$ $

3,420,650 3,146,630 (274,020) 636,240,913 $

725,927,599 89,686,686

$ $

2,406,097 2,213,351 (192,747) 447,534,127 $

510,620,061 63,085,935

215

$ $

3,468,610 3,190,748 (277,862) 645,161,407 $

3,517,148 3,235,398 (281,750) 654,189,439 $

3,566,268 3,280,583 (285,685) 663,325,827 $

3,615,975 3,326,308 (289,667) 672,571,375 $

3,666,274 3,372,577 (293,696) 681,926,881 $

3,717,167 3,419,394 (297,773) 691,393,131 $

3,768,661 3,466,763 (301,898) 700,970,900

736,105,556 90,944,149

746,406,211 92,216,772

756,830,495 93,504,668

767,379,327 94,807,952

778,053,617 96,126,736

788,854,262 97,461,131

799,782,145 98,811,246

$ $

2,439,832 2,244,383 (195,449) 453,808,834 $

2,473,974 2,275,790 (198,184) 460,159,184 $

2,508,526 2,307,574 (200,952) 466,585,752 $

2,543,490 2,339,737 (203,753) 473,089,103 $

2,578,870 2,372,283 (206,587) 479,669,800 $

2,614,669 2,405,214 (209,455) 486,328,393 $

2,650,889 2,438,533 (212,356) 493,065,430

517,779,273 63,970,439

525,024,790 64,865,606

532,357,268 65,771,517

539,777,355 66,688,251

547,285,688 67,615,889

554,882,900 68,554,507

562,569,613 69,504,183

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED 2060 RAIL PASSENGERS 2061 Year 51 52 Ridership New York - Philadelphia

2059 50

Expected Ridership14,565,632 14,166,769 14,365,011 Expected Ridership13,303,277 (Elasticity) 12,938,982 13,120,043 (1,227,787) (1,244,968) (1,262,355) Current Acela$Price & Revenue 1,770,846,126 $ 1,795,626,369 1,820,704,026 % of Acela Passenger Facility Charge 2,037,889,722 267,043,596

2062 53

2063 54

2064 55

2065 2010 1 56

Phase 2 Phase 3 1.00 31.32% 25.20% 14,768,650 14,974,083 15,181,948 15,392,261 13,488,701 13,676,329 13,866,179 14,058,265 Change(1,279,950) in Ridership (1,297,754) (1,315,769) (1,333,996) $ 1,846,081,308 $ $1,871,760,404 125.00 $ 1,897,743,471 $ 1,924,032,636 120% $ 7.50

Proposed Price Revenue (Elasticity) $ 2,066,406,826 $ & 2,095,266,193 $ 2,124,470,369 $ $2,154,021,873 157.50 in Revenue$ $ 282,261,469 $ 270,780,457 $ 274,562,167 $Change 278,389,061 32.50

$ 2,183,923,186 $ 286,179,715

$ 2,214,176,758 $ 290,144,122

Ridership New York - Washington, DC 15,920,750 16,143,536 Expected Ridership16,368,996 14,623,853 14,828,491 Expected Ridership15,035,585 (Elasticity) (1,296,897) (1,315,045) (1,333,411) 2,690,606,738 $ 2,728,257,605 2,766,360,356 Current Acela$Price & Revenue % of Acela Passenger Facility Charge 3,075,396,191 384,789,453

Phase 2 Phase 3 35.21% 28.32% 16,597,150 16,828,017 17,061,617 17,297,970 15,245,153 15,457,214 15,671,786 15,888,885 (1,370,803) (1,389,832) (1,409,085) Change(1,351,997) in Ridership $ 2,804,918,358 $ $2,843,934,931 169.00 $ 2,883,413,356 $ 2,923,356,864 120% $ 7.50

$ 3,118,431,589 $ & 3,161,983,497 $ 3,206,055,761 $ $3,250,652,179 Proposed Price Revenue (Elasticity) 210.30 $ 390,173,984 $ 395,623,141 $Change 401,137,403 in Revenue$ $ 406,717,247 41.30

$ 3,295,776,498 $ 412,363,142

$ 3,341,432,412 $ 418,075,549

Ridership Philadelphia - Washington, DC

Phase 2 Phase 3 14.18% 11.41% 6,686,917 6,779,932 6,874,049 6,106,305 6,191,244 6,277,189 (580,611) (588,688) (596,860) Change in Ridership $ 829,177,676 $ $ 840,711,584 852,382,023 $ 124.00 $ 120% $ 7.50

6,414,398 5,857,449 (556,949) 795,385,375 $

6,504,158Ridership 6,594,995 Expected 5,939,415Ridership (Elasticity) 6,022,365 Expected (564,743) (572,630) 806,515,560 817,779,328 Current Acela$Price & Revenue % of Acela Passenger Facility Charge

915,519,294 120,133,919

928,330,566 $ & 941,295,599 $ 954,415,537 $ $ 967,691,511 Proposed Price Revenue (Elasticity) 156.30 121,815,007 $ 123,516,271 $Change 125,237,861 in Revenue$ $ 126,979,927 32.30

$ $

Ridership Baltimore - New York

736,105,556 90,944,149

746,406,211 $ & 756,830,495 $ 767,379,327 $ $ 778,053,617 Proposed Price Revenue (Elasticity) 230.70 92,216,772 $ 93,504,668 $Change 94,807,952 in Revenue$ $ 96,126,736 44.70

$ $

788,854,262 97,461,131

$ $

Phase 3 5.40% 4.34% 2,543,490 2,578,870 2,614,669 2,339,737 2,372,283 2,405,214 (203,753) (206,587) (209,455) Change in Ridership $ 473,089,103 $ $ 479,669,800 486,328,393 $ 186.00 $ 120% $ 7.50

2,473,974Ridership 2,508,526 Expected 2,275,790Ridership (Elasticity) 2,307,574 Expected (198,184) (200,952) 460,159,184 466,585,752 Current Acela$Price & Revenue % of Acela Passenger Facility Charge

517,779,273 63,970,439

525,024,790 $ & 532,357,268 $ 539,777,355 $ $ 547,285,688 Proposed Price Revenue (Elasticity) 230.70 64,865,606 $ 65,771,517 $Change 66,688,251 in Revenue$ $ 67,615,889 45

216

994,716,015 130,526,067

3,768,661 3,466,763 (301,898) 700,970,900

799,782,145 98,811,246

Phase 2

2,439,832 2,244,383 (195,449) 453,808,834 $

$ $

Phase 3 7.67% 6.17% 3,615,975 3,666,274 3,717,167 3,326,308 3,372,577 3,419,394 (289,667) (293,696) (297,773) Change in Ridership $ 672,571,375 $ $ 681,926,881 691,393,131 $ 186.00 $ 120% $ 7.50

3,517,148Ridership 3,566,268 Expected 3,235,398Ridership (Elasticity) 3,280,583 Expected (281,750) (285,685) 654,189,439 663,325,827 Current Acela$Price & Revenue % of Acela Passenger Facility Charge

Ridership BWI - New York

981,124,637 128,742,614

Phase 2

3,468,610 3,190,748 (277,862) 645,161,407 $

$ $

6,969,274 6,364,146 (605,128) 864,189,948

$ $

554,882,900 68,554,507

$ $

2,650,889 2,438,533 (212,356) 493,065,430

562,569,613 69,504,183

2011 2

2012 3

Penndesign 2012 studio report

217

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED RAIL PASSENGERS Year Ridership New York - Wilmington Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

2010 1 Phase 2

$ $

Ridership Boston-New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

$ $

132.30 28.30

0.00%

Phase 3

4.45%

104.00 120% 7.50 132.30 28.30

Phase 2

0.00%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

218

Phase 3 10.80%

Change in Ridership

Ridership New York - Providence

Current Acela Price & Revenue % of Acela Passenger Facility Charge

0.00%

104.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

163.50 33.50

Change in Ridership

Ridership New York - Route 128

Current Acela Price & Revenue % of Acela Passenger Facility Charge

5.01%

130.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

Phase 3

Change in Ridership

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

6.23%

99.00 120% 7.50 126.30 27.30

Phase 3

4.29%

2011 2

2012 3

2013 4

Penndesign 2012 studio report

2012 3

2013 4

219

2014 5

2015 6

2016 7

2017 8

2018 9

2019 10

2020 11

2021 12

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment 2014 5

HIGH-SPEED RAIL PASSENGERS 2015 2016 Year 6 7

2017 8

Ridership New York - Wilmington Expected Ridership Expected Ridership (Elasticity) Current Acela Price & Revenue % of Acela Passenger Facility Charge

2018 9 Phase 2

$ $

Ridership Boston-New York

Current Acela Price & Revenue % of Acela Passenger Facility Charge

$ $

132.30 28.30

0.00%

Phase 3

4.45%

104.00 120% 7.50 132.30 28.30

Phase 2

0.00%

Change in Ridership $ $

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

220

Phase 3 10.80%

Change in Ridership

Ridership New York - Providence

Current Acela Price & Revenue % of Acela Passenger Facility Charge

0.00%

104.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

163.50 33.50

Change in Ridership

Ridership New York - Route 128

Current Acela Price & Revenue % of Acela Passenger Facility Charge

5.01%

130.00 120% 7.50

Phase 2

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

Phase 3

Change in Ridership

Proposed Price & Revenue (Elasticity) $ Change in Revenue $

Expected Ridership Expected Ridership (Elasticity)

6.23%

2019 10

99.00 120% 7.50 126.30 27.30

Phase 3

4.29%

2010 2020 111

2011 2021 122

2012 2022 133

2013 4

Penndesign 2012 studio report

2023 14

n Ridership

n Revenue

n Ridership

n Revenue

n Ridership

n Revenue

n Ridership

n Revenue

221

2024 15

2025 16

2026 17

2027 18

2028 19

2029 20

2030 21

2031 22

6.23% 306,094 279,802 (26,293) 39,792,256 $

445,402 407,143 (38,259) 57,902,302 $

78,1

$ $

45,747,556 5,955,300

66,567,946 8,665,645

89,7 11,6

$ $

6 5

2024 15

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment RAIL PASSENGERS 2025 HIGH-SPEED 2026 2027 16 Year 17 18 Ridership New York - Wilmington

2028 19

2029 20

Phase 2

6.23%

Expected Ridership Expected Ridership (Elasticity) -

Change in RidershipCurrent Acela-Price & Revenue - $ % of Acela Passenger Facility Charge $

130.00 120% 7.50

Proposed Price - & Revenue (Elasticity) - $ Change in Revenue- $ -

163.50 33.50

Ridership Boston-New York

Phase 2

0.00%

Expected Ridership Expected Ridership (Elasticity) -

Change in RidershipCurrent Acela-Price & Revenue - $ % of Acela Passenger Facility Charge $

104.00 120% 7.50

Proposed Price - & Revenue (Elasticity) - $ Change in Revenue- $ -

132.30 28.30

Ridership New York - Route 128

Phase 2

0.00%

Expected Ridership Expected Ridership (Elasticity) -

Change in RidershipCurrent Acela-Price & Revenue - $ % of Acela Passenger Facility Charge $

104.00 120% 7.50

Proposed Price - & Revenue (Elasticity) - $ Change in Revenue- $ -

132.30 28.30

Ridership New York - Providence -

Expected Ridership Expected Ridership (Elasticity) Current Acela-Price & Revenue % of Acela Passenger Facility Charge

Phase 2

Change in Ridership- $

Proposed Price - & Revenue (Elasticity) - $ Change in Revenue- $ -

222

0.00%

99.00 120% 7.50 126.30 27.30

Phase 3 -

2010 1

2030 21

2011 2

2031 22

2012 3

2032 23

2013 4

2033 24

203 2

5.01%

6.23% 306,094 279,802 (26,293) 39,792,256 $

445,402 407,143 (38,259) 57,902,302 $

600,799 549,192 (51,607) 78,103,828 $

773,917 707,439 (66,477) 100,609,167 $

966,55 883,52 (83,02 125,651,66

$ $

45,747,556 5,955,300

66,567,946 8,665,645

89,792,828 11,689,000

115,666,311 15,057,144

144,456,65 18,804,99

$ $

Phase 3 10.80% -

Phase 3

4.45%

4.29%

Penndesign 2012 studio report

031 22

2032 23

2033 24

02 43 59) 02 $

600,799 549,192 (51,607) 78,103,828 $

46 45

89,792,828 11,689,000

$ $

773,917 707,439 (66,477) 100,609,167 $

115,666,311 15,057,144

HIGH-SPEED 2035 RAIL PASSENGERS 2036 Year 26 27

2034 25

$ $

2038 29

2039 30

2040 31

204 3

966,551 883,527 (83,024) 125,651,660 $

Ridership New York - Wilmington 5.01% Expected Ridership 1,140,684 949,467 1,352,839 Expected Ridership (Elasticity) 867,910 1,042,702 1,236,634 Ridership (81,557) (97,982) Change in(116,205) Current Acela$Price148,288,870 & Revenue $ 123,430,740 175,869,085 $ % of Acela Passenger Facility Charge

1,588,038 1,451,630 (136,408) 206,444,953 $

1,848,593 1,689,803 (158,789) 240,317,055 $

1,899,767 1,736,582 (163,185) 246,969,757 $

1,952,33 1,784,63 (167,70 253,803,27

144,456,658 18,804,998

Proposed Price (Elasticity) $ 141,903,356 $ & Revenue 170,481,747 $ 202,189,610 in Revenue $ 18,472,615 $ 22,192,877 Change $ 26,320,526

237,341,456 30,896,503

276,282,848 35,965,794

283,931,192 36,961,435

$ $

291,787,41 37,984,13

Ridership Boston-New York 10.80% Expected Ridership 2,046,755.71 2,458,958.70 2,916,299.88 Expected Ridership (Elasticity) 1,861,104.48 2,235,918.53 2,651,776.53 Ridership (185,651) (223,040) Change in(264,523) Current Acela$Price255,731,704 & Revenue $ 212,862,594 303,295,188 $ % of Acela Passenger Facility Charge

3,423,315.66 3,112,803.38 (310,512) 356,024,829 $

3,984,990.31 3,623,531.25 (361,459) 414,438,992 $

4,095,306.88 3,723,841.55 (371,465) 425,911,916 $

4,208,621.8 3,826,878.2 (381,74 437,696,67

Proposed Price (Elasticity) 246,224,122 $ & Revenue 295,812,022 $ 350,830,035 $ in Revenue $ 33,361,528 $ 40,080,317 Change $ 47,534,847

411,823,887 55,799,058

479,393,185 64,954,193

492,664,237 66,752,321

$ $

506,295,99 68,599,32

$ $

223

2037 28

Ridership New York - Route 128 4.45% Expected Ridership 1,013,182 843,339 1,201,624 Expected Ridership (Elasticity) 766,844 921,281 1,092,630 Ridership (76,495) (91,901) Change in(108,993) Current Acela$Price105,370,934 & Revenue $ 87,707,273 124,968,851 $ % of Acela Passenger Facility Charge Proposed Price (Elasticity) 101,453,458 $ & Revenue 121,885,509 $ 144,554,968 $ in Revenue $ 13,746,185 $ 16,514,575 Change $ 19,586,117

$ $

1,410,533 1,282,590 (127,943) 146,695,416 $

1,641,964 1,493,029 (148,935) 170,764,214 $

1,687,418 1,534,361 (153,057) 175,491,484 $

1,734,10 1,576,81 (157,29 180,347,24

169,686,694 22,991,278

197,527,747 26,763,533

202,995,912 27,504,429

$ $

208,612,70 28,265,46

$ $

Ridership New York - Providence 4.29% Expected Ridership 813,017 976,753 1,158,419 Expected Ridership (Elasticity) 738,285 886,971 1,051,938 Ridership (74,732) (89,782) Change in(106,481) Current Acela$Price 96,698,551 & Revenue $ 80,488,668 114,683,493 $ % of Acela Passenger Facility Charge

1,359,817 1,234,824 (124,993) 134,621,889 $

1,582,927 1,437,425 (145,501) 156,709,744 $

1,626,747 1,477,218 (149,529) 161,047,943 $

1,671,75 1,518,09 (153,66 165,504,05

Proposed Price (Elasticity) $ 93,245,396 $ & Revenue 112,024,398 $ 132,859,791 in Revenue $ 12,756,727 $ 15,325,847 Change $ 18,176,298

155,958,242 21,336,354

181,546,823 24,837,079

186,572,588 25,524,645

191,734,95 26,230,89

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment HIGH-SPEED RAILRAIL PASSENGERS HIGH-SPEED PASSENGERS Year Year Ridership New New YorkYork - Wilmington Ridership - Wilmington

2038 29

2010 1

2039 30

2011 2

2040 31

Phase 3 6.23% 5.01% Expected Ridership Expected Ridership 1,588,038 1,848,593 Expected Ridership (Elasticity) Expected Ridership (Elasticity) 1,451,630 1,689,803 Change in Ridership Change in Ridership (136,408) (158,789) Current AcelaAcela PricePrice & Revenue $ Current & Revenue $ 130.00 206,444,953 $ 240,317,055 $ % of % Acela 120% of Acela Passenger Facility Charge $ 7.50 Passenger Facility Charge

1,899,767 1,736,582 (163,185) 246,969,757 $

Proposed PricePrice & Revenue (Elasticity) $ Proposed & Revenue (Elasticity) $ 163.50 237,341,456 Change in Revenue $ Change in Revenue $ 33.50 30,896,503

283,931,192 36,961,435

Ridership Boston-New YorkYork Ridership Boston-New

$ $

276,282,848 35,965,794

$ $

4,095,306.88 3,723,841.55 (371,465) 425,911,916 $

Proposed PricePrice & Revenue (Elasticity) Proposed & Revenue (Elasticity) $ $ 132.30 411,823,887 Change in Revenue Change in Revenue $ 28.30 55,799,058 $

492,664,237 66,752,321

$ $

479,393,185 64,954,193

$ $

1,687,418 1,534,361 (153,057) 175,491,484 $

Proposed & Revenue (Elasticity) $ 132.30 169,686,694 Proposed PricePrice & Revenue (Elasticity) $ Change in Revenue $ 28.30 22,991,278 Change in Revenue $

202,995,912 27,504,429

1,952,333 1,784,633 (167,700) 253,803,279 $

2,006,327 1,833,988 (172,338) 260,822,469 $

2,061,78 1,884,68 (177,10 268,032,30

291,787,418 37,984,139

299,857,098 39,034,629

$ $

308,145,95 40,113,65

4,208,621.85 3,826,878.27 (381,744) 437,696,673 $

4,325,015.60 3,932,714.51 (392,301) 449,801,623 $

4,444,570.6 4,041,425.2 (403,14 462,235,34

506,295,995 68,599,322

520,298,129 70,496,507

$ $

534,680,56 72,445,21

1,734,108 1,576,816 (157,292) 180,347,240 $

1,782,067 1,620,424 (161,643) 185,334,928 $

1,831,32 1,665,21 (166,11 190,458,08

208,612,702 28,265,461

214,382,100 29,047,172

$ $

220,308,19 29,850,11

1,671,758 1,518,091 (153,667) 165,504,054 $

1,717,992 1,560,076 (157,916) 170,081,239 $

1,765,48 1,603,20 (162,28 174,782,74

191,734,953 26,230,898

197,037,579 26,956,341

202,484,22 27,701,48

$ $

Phase 2

Expected Ridership Expected Ridership Expected Ridership (Elasticity) Expected Ridership (Elasticity) Change in Ridership Change in Ridership Current & Revenue $ Current AcelaAcela PricePrice & Revenue $ of Acela % of % Acela Passenger Facility Charge Passenger Facility Charge $

$ $

197,527,747 26,763,533

$ $

Phase 3 0.00% 4.29% 1,359,817 1,582,927 1,234,824 1,437,425 (124,993) (145,501) 134,621,889 $ 156,709,744 $ 99.00 120% 7.50

Proposed & Revenue (Elasticity) $ 126.30 155,958,242 Proposed PricePrice & Revenue (Elasticity) $ Change in Revenue $ 27.30 21,336,354 Change in Revenue $

224

Phase 2

Phase 3 0.00% 4.45% Expected Ridership Expected Ridership 1,410,533 1,641,964 Expected Ridership (Elasticity) Expected Ridership (Elasticity) 1,282,590 1,493,029 Change in Ridership Change in Ridership (127,943) (148,935) Current & Revenue $ 104.00 146,695,416 $ 170,764,214 $ Current AcelaAcela PricePrice & Revenue $ of Acela % of % Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

Ridership - Providence Ridership New New YorkYork - Providence

2013 4

2042 33

Phase 2

Phase 3 0.00% 10.80% Expected Ridership Expected Ridership 3,423,315.66 3,984,990.31 Expected Ridership (Elasticity) Expected Ridership (Elasticity) 3,112,803.38 3,623,531.25 Change in Ridership Change in Ridership (310,512) (361,459) Current AcelaAcela PricePrice & Revenue Current & Revenue $ $ 104.00 356,024,829 $ 414,438,992 $ % of % Acela of Acela 120% Passenger Facility Charge Passenger Facility Charge $ 7.50

Ridership - Route Ridership New New YorkYork - Route 128 128

2012 3

2041 32

$ $

181,546,823 24,837,079

$ $

1,626,747 1,477,218 (149,529) 161,047,943 $

186,572,588 25,524,645

$ $

Penndesign 2012 studio report

040 31

2041 32

2042 33

67 82 85) 57 $

1,952,333 1,784,633 (167,700) 253,803,279 $

92 35

291,787,418 37,984,139

$ $

88 55 65) 16 $

4,208,621.85 3,826,878.27 (381,744) 437,696,673 $

37 21

506,295,995 68,599,322

$ $

18 61 57) 84 $

1,734,108 1,576,816 (157,292) 180,347,240 $

12 29

208,612,702 28,265,461

$ $

47 18 29) 43 $

1,671,758 1,518,091 (153,667) 165,504,054 $

88 45

191,734,953 26,230,898

$ $

2043 34

2,006,327 1,833,988 (172,338) 260,822,469 $

299,857,098 39,034,629

$ $

4,325,015.60 3,932,714.51 (392,301) 449,801,623 $

520,298,129 70,496,507

$ $

1,782,067 1,620,424 (161,643) 185,334,928 $

214,382,100 29,047,172

$ $

1,717,992 1,560,076 (157,916) 170,081,239 $

197,037,579 26,956,341

225

$ $

2044 35

2045 36

2046 37

2047 38

2048 39

2049 40

2,061,787 1,884,685 (177,102) 268,032,302 $

2,118,753 1,936,758 (181,995) 275,437,887 $

2,180,872 1,993,541 (187,331) 283,513,342 $

2,244,764 2,051,944 (192,819) 291,819,295 $

2,310,478 2,112,014 (198,464) 300,362,203 $

2,378,067 2,173,797 (204,270) 309,148,701 $

308,145,953 40,113,651

316,659,856 41,221,969

325,943,881 42,430,540

335,492,902 43,673,607

345,314,340 44,952,136

355,415,822 46,267,121

$ $

2050 41

2,447,582 2,237,341 (210,241) 318,185,604 $

365,805,187 47,619,582

$ $

2,482,465 2,269,227 (213,237) 322,720,422

371,018,684 48,298,262

4,444,570.64 4,041,425.29 (403,145) 462,235,347 $

4,567,371.68 4,153,087.65 (414,284) 475,006,655 $

4,701,280.65 4,274,850.39 (426,430) 488,933,188 $

4,839,011.80 4,400,088.62 (438,923) 503,257,228 $

4,980,672.19 4,528,899.68 (451,773) 517,989,908 $

5,126,371.82 4,661,383.61 (464,988) 533,142,669 $

5,276,223.75 4,797,643.20 (478,581) 548,727,270 $

5,351,421.10 4,866,019.76 (485,401) 556,547,794

534,680,566 72,445,219

549,453,496 74,446,841

565,562,706 76,629,519

582,131,724 78,874,497

599,173,427 81,183,520

616,701,051 83,558,382

634,728,195 86,000,925

643,774,414 87,226,620

$ $

1,831,328 1,665,217 (166,111) 190,458,083 $

1,881,926 1,711,226 (170,700) 195,720,335 $

1,937,102 1,761,397 (175,705) 201,458,582 $

1,993,852 1,812,999 (180,853) 207,360,617 $

2,052,221 1,866,074 (186,147) 213,431,027 $

2,112,255 1,920,663 (191,592) 219,674,526 $

2,174,000 1,976,807 (197,193) 226,095,958 $

2,204,984 2,004,980 (200,003) 229,318,304

220,308,196 29,850,114

226,395,190 30,674,856

233,032,782 31,574,200

239,859,831 32,499,214

246,881,644 33,450,617

254,103,674 34,429,148

261,531,525 35,435,566

265,258,902 35,940,598

$ $

1,765,482 1,603,201 (162,282) 174,782,741 $

1,814,262 1,647,496 (166,765) 179,611,891 $

1,867,453 1,695,798 (171,655) 184,877,862 $

1,922,163 1,745,479 (176,684) 190,294,139 $

1,978,434 1,796,578 (181,856) 195,864,934 $

2,036,309 1,849,133 (187,176) 201,594,572 $

2,095,833 1,903,186 (192,647) 207,487,499 $

2,125,703 1,930,310 (195,393) 210,444,635

202,484,227 27,701,486

208,078,754 28,466,863

214,179,333 29,301,472

220,454,042 30,159,903

226,907,757 31,042,823

233,545,491 31,950,919

240,372,394 32,884,895

243,798,209 33,353,574

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment RAIL PASSENGERS 2043 HIGH-SPEED2044 2045 34 Year 35 36

2042 33

Ridership New York - Wilmington

2046 37

Phase 3 6.23% 5.01% Expected Ridership 2,118,753 2,180,872 2,244,764 2,310,478 2,378,067 Expected Ridership (Elasticity) 1,936,758 1,993,541 2,051,944 2,112,014 2,173,797 Change in Ridership (181,995) (187,331) (192,819) (198,464) (204,270) Current Acela Price $& Revenue $ $ 130.00 $ 275,437,887 283,513,342 $ 291,819,295 300,362,203 $ 309,148,701 $ % of Acela 120% Passenger Facility Charge $ 7.50

2,061,787 1,884,685 (177,102) 268,032,302

,098 ,629

Price & Revenue (Elasticity) $ $ 308,145,953 Proposed $ 316,659,856 $ 325,943,881 335,492,902 Change $ 40,113,651 $ 41,221,969 $ 42,430,540 $ in Revenue 43,673,607 Ridership Boston-New York 4,444,570.64 4,041,425.29 (403,145) 462,235,347

,129 ,507

Price & Revenue (Elasticity) $ $ 534,680,566 Proposed $ 549,453,496 $ 565,562,706 582,131,724 Change 72,445,219 $ 74,446,841 $ 76,629,519 $ in Revenue 78,874,497 $

1,831,328 1,665,217 (166,111) 190,458,083

,100 ,172

220,308,196 Proposed $ 226,395,190 $ 233,032,782 239,859,831 Price & Revenue (Elasticity) $ $ 29,850,114 $ 30,674,856 $ 31,574,200 $ in Revenue 32,499,214 Change $

$ 132.30 599,173,427 $ 28.30 81,183,520

$ 132.30 246,881,644 $ 28.30 33,450,617

Phase 2

,992 ,076 ,916) ,239 $

1,765,482 1,603,201 (162,282) 174,782,741

,579 ,341

202,484,227 Proposed $ 208,078,754 $ 214,179,333 220,454,042 Price & Revenue (Elasticity) $ $ 27,701,486 $ 28,466,863 $ 29,301,472 $ in Revenue 30,159,903 Change $

$ $

355,415,822 46,267,121

$ $

616,701,051 83,558,382

$ $

Phase 3 0.00% 4.45% Expected Ridership 1,881,926 1,937,102 1,993,852 2,052,221 2,112,255 Expected Ridership (Elasticity) 1,711,226 1,761,397 1,812,999 1,866,074 1,920,663 Change in Ridership (170,700) (175,705) (180,853) (186,147) (191,592) $ 195,720,335 201,458,582 $ 207,360,617 213,431,027 $ 219,674,526 $ Current Acela Price $& Revenue $ $ 104.00 % of Acela 120% Passenger Facility Charge $ 7.50

Ridership New York - Providence

1,814,262 1,867,453 1,922,163 Expected Ridership 1,647,496 1,695,798 1,745,479 Expected Ridership (Elasticity) (166,765) (171,655) (176,684) Change in Ridership $ 179,611,891 184,877,862 $ 190,294,139 Current Acela Price $& Revenue $ $ % of Acela Passenger Facility Charge $

226

2012 3

2050 41

2013 4

2051 42

2,447,582 2,237,341 (210,241) 318,185,604 $

365,805,187 47,619,582

$ $

2,482,465 2,269,227 (213,237) 322,720,422 $

2,517,784 2,301,513 (216,271) 327,311,928 $

2,553,54 2,334,20 (219,34 331,960,61

371,018,684 48,298,262

376,297,354 48,985,426

$ $

381,641,76 49,681,14

5,351,421.10 4,866,019.76 (485,401) 556,547,794 $

5,427,558.46 4,935,251.07 (492,307) 564,466,080 $

5,504,644.0 5,005,344.5 (499,29 572,482,98

643,774,414 87,226,620

652,933,717 88,467,637

$ $

662,207,08 89,724,11

2,204,984 2,004,980 (200,003) 229,318,304 $

2,236,355 2,033,506 (202,849) 232,580,931 $

2,268,11 2,062,38 (205,73 235,884,19

265,258,902 35,940,598

269,032,874 36,451,943

$ $

272,853,84 36,969,65

2,125,703 1,930,310 (195,393) 210,444,635 $

2,155,947 1,957,774 (198,173) 213,438,736 $

2,186,56 1,985,57 (200,98 216,470,12

243,798,209 33,353,574

247,266,849 33,828,112

250,778,68 34,308,56

$ $

5,276,223.75 4,797,643.20 (478,581) 548,727,270 $

634,728,195 86,000,925

$ $

Phase 2

,067 ,424 ,643) ,928 $

$ $

$ 163.50 345,314,340 $ 33.50 44,952,136

Phase 3 0.00% 10.80% Expected Ridership 4,567,371.68 4,701,280.65 4,839,011.80 4,980,672.19 5,126,371.82 Expected Ridership (Elasticity) 4,153,087.65 4,274,850.39 4,400,088.62 4,528,899.68 4,661,383.61 Change in Ridership (414,284) (426,430) (438,923) (451,773) (464,988) Current Acela Price $& Revenue $ $ 104.00 $ 475,006,655 488,933,188 $ 503,257,228 517,989,908 $ 533,142,669 $ % of Acela 120% Passenger Facility Charge $ 7.50

Ridership New York - Route 128

2011 2

2049 40

Phase 2

5.60 4.51 ,301) ,623 $

$ $

2010 1

2048 39

Phase 2

,327 ,988 ,338) ,469 $

$ $

2047 38

$ $

254,103,674 34,429,148

$ $

Phase 3 0.00% 4.29% 1,978,434 2,036,309 1,796,578 1,849,133 (181,856) (187,176) 195,864,934 $ 201,594,572 $ 99.00 120% 7.50

$ 126.30 226,907,757 $ 27.30 31,042,823

$ $

233,545,491 31,950,919

$ $

2,174,000 1,976,807 (197,193) 226,095,958 $

261,531,525 35,435,566

$ $

2,095,833 1,903,186 (192,647) 207,487,499 $

240,372,394 32,884,895

$ $

Penndesign 2012 studio report

HIGH-SPEED 2050 RAIL PASSENGERS 2051 Year 41 42

049 40

2052 43

2053 44

2054 45

2055 46

2056 47

2057 48

2058 49

2059 50

Ridership New York - Wilmington

82 41 41) 04 $

Expected Ridership 2,517,784 2,482,465 2,553,543 Expected Ridership (Elasticity) 2,269,227 2,301,513 2,334,200 Ridership (213,237) (216,271)Change in (219,343) Current Acela Price & Revenue 322,720,422 $ 327,311,928 $ 331,960,617 $ % of Acela Passenger Facility Charge

2,589,746 2,367,293 (222,453) 336,666,979 $

2,626,396 2,400,796 (225,601) 341,431,506 $

2,663,498 2,434,710 (228,788) 346,254,684 $

2,701,054 2,469,040 (232,014) 351,136,995 $

2,739,069 2,503,790 (235,279) 356,078,921 $

2,777,546 2,538,962 (238,584) 361,080,938 $

2,816,489 2,574,559 (241,929) 366,143,518

87 82

Proposed Price$& Revenue (Elasticity) $ 381,641,764 $ 371,018,684 376,297,354 in Revenue $ 48,298,262 $ 48,985,426 Change $ 49,681,147

387,052,480 50,385,500

392,530,064 51,098,558

398,075,078 51,820,394

403,688,075 52,551,080

409,369,609 53,290,687

415,120,226 54,039,288

420,940,470 54,796,952

$ $

Ridership Boston-New York

75 20 81) 70 $

Expected Ridership5,427,558.46 5,351,421.10 5,504,644.03 Expected Ridership4,935,251.07 (Elasticity) 4,866,019.76 5,005,344.59 Ridership (485,401) (492,307)Change in (499,299) Current Acela Price & Revenue 556,547,794 $ 564,466,080 $ 572,482,980 $ % of Acela Passenger Facility Charge

5,582,685.98 5,076,307.73 (506,378) 580,599,342 $

5,661,692.41 5,148,147.87 (513,545) 588,816,011 $

5,741,671.40 5,220,872.36 (520,799) 597,133,826 $

5,822,630.97 5,294,488.48 (528,142) 605,553,621 $

5,904,579.08 5,369,003.47 (535,576) 614,076,224 $

5,987,523.62 5,444,424.52 (543,099) 622,702,456 $

6,071,472.43 5,520,758.75 (550,714) 631,433,133

95 25

Proposed Price$& Revenue (Elasticity) 643,774,414 652,933,717 $ 662,207,089 $ in Revenue $ 87,226,620 $ 88,467,637 Change $ 89,724,110

671,595,513 90,996,171

681,099,964 92,283,953

690,721,413 93,587,588

700,460,826 94,907,205

710,319,159 96,242,936

720,297,364 97,594,908

730,396,382 98,963,249

$ $

Ridership New York - Route 128

00 07 93) 58 $

Expected Ridership 2,236,355 2,204,984 2,268,117 Expected Ridership (Elasticity) 2,004,980 2,033,506 2,062,387 Ridership (200,003) (202,849)Change in (205,730) Current Acela Price & Revenue 229,318,304 $ 232,580,931 $ 235,884,191 $ % of Acela Passenger Facility Charge

2,300,273 2,091,627 (208,647) 239,228,432 $

2,332,827 2,121,228 (211,599) 242,614,004 $

2,365,781 2,151,193 (214,588) 246,041,252 $

2,399,140 2,181,525 (217,614) 249,510,520 $

2,432,905 2,212,228 (220,677) 253,022,148 $

2,467,081 2,243,305 (223,777) 256,576,475 $

2,501,672 2,274,757 (226,914) 260,173,837

25 66

Proposed Price$& Revenue (Elasticity) 265,258,902 269,032,874 $ 272,853,847 $ in Revenue $ 35,940,598 $ 36,451,943 Change $ 36,969,656

276,722,225 37,493,793

280,638,411 38,024,407

284,602,804 38,561,552

288,615,803 39,105,284

292,677,802 39,655,654

296,789,192 40,212,717

300,950,361 40,776,524

$ $

Ridership New York - Providence

33 86 47) 99 $

Expected Ridership 2,155,947 2,125,703 2,186,567 Expected Ridership (Elasticity) 1,930,310 1,957,774 1,985,579 Ridership (195,393) (198,173)Change in (200,987) Current Acela Price & Revenue 210,444,635 $ 213,438,736 $ 216,470,127 $ % of Acela Passenger Facility Charge

2,217,567 2,013,730 (203,837) 219,539,126 $

2,248,950 2,042,228 (206,722) 222,646,054 $

2,280,719 2,071,078 (209,642) 225,791,228 $

2,312,878 2,100,280 (212,598) 228,974,963 $

2,345,430 2,129,840 (215,590) 232,197,572 $

2,378,377 2,159,759 (218,619) 235,459,366 $

2,411,724 2,190,040 (221,684) 238,760,653

94 95

Proposed Price$& Revenue (Elasticity) 243,798,209 247,266,849 $ 250,778,687 $ in Revenue $ 33,353,574 $ 33,828,112 Change $ 34,308,560

254,334,095 34,794,969

257,933,443 35,287,389

261,577,099 35,785,871

265,265,427 36,290,464

268,998,791 36,801,219

272,777,550 37,318,183

276,602,061 37,841,408

$ $

227

$ $

Penndesign 2012 studio report

B-7 HSR Ridership & Revenue by Route Segment

ENGERS

HIGH-SPEED2053 RAIL PASSENGERS 2054 Year 44 45

mington

Ridership New York - Wilmington

2055 46

2056 47

2057 48

2010 1

Phase 3 6.23% 5.01% 2,589,746 2,626,396 2,663,498 2,701,054 2,739,069 Expected Ridership ity) 2,367,293 2,400,796 2,434,710 2,469,040 2,503,790 Expected Ridership (Elasticity) Change in Ridership (222,453) (225,601) (228,788) (232,014) (235,279) Change in Ridership nue $ 336,666,979 $ Revenue 341,431,506 $ 346,254,684 $ 130.00 351,136,995 $ 356,078,921 $ Current Acela Price & $ % of Acela 120% ge Passenger Facility Charge $ 7.50

Ridership Boston-New York

$ 163.50 403,688,075 $ 33.50 52,551,080

$ $

409,369,609 53,290,687

$ $

Phase 3 0.00% 10.80% 5,582,685.98 5,661,692.41 5,741,671.40 5,822,630.97 5,904,579.08 Expected Ridership ity) 5,076,307.73 5,148,147.87 5,220,872.36 5,294,488.48 5,369,003.47 Expected Ridership (Elasticity) Change in Ridership (506,378) (513,545) (520,799) (528,142) (535,576) Change in Ridership nue $ 580,599,342 $ Revenue 588,816,011 $ 597,133,826 $ 104.00 605,553,621 $ 614,076,224 $ Current Acela Price & $ % of Acela 120% ge Passenger Facility Charge $ 7.50

Ridership New York - Route 128

$ 132.30 700,460,826 $ 28.30 94,907,205

$ $

710,319,159 96,242,936

$ $

Phase 3 0.00% 4.45% 2,300,273 2,332,827 2,365,781 2,399,140 2,432,905 Expected Ridership ity) 2,091,627 2,121,228 2,151,193 2,181,525 2,212,228 Expected Ridership (Elasticity) Change in Ridership (208,647) (211,599) (214,588) (217,614) (220,677) Change in Ridership nue $ 239,228,432 $ Revenue 242,614,004 $ 246,041,252 $ 104.00 249,510,520 $ 253,022,148 $ Current Acela Price & $ % of Acela 120% ge Passenger Facility Charge $ 7.50

Ridership New York - Providence

$ 132.30 288,615,803 $ 28.30 39,105,284

Phase 2

2,217,567 2,248,950 2,280,719 Expected Ridership 2,013,730 2,042,228 2,071,078 Expected Ridership (Elasticity) Change in Ridership (203,837) (206,722) (209,642) Change in Ridership nue $ 219,539,126 $ Revenue 222,646,054 $ 225,791,228 $ Current Acela Price & $ % of Acela ge Passenger Facility Charge $

ity)

(Elasticity) $ 254,334,095 $ 257,933,443 261,577,099 Proposed Price & Revenue (Elasticity) $ $ Change in Revenue $ 34,794,969 $ 35,287,389 35,785,871 Change$ in Revenue $

228

2012 3

2060 51

2013 4

2,777,546 2,538,962 (238,584) 361,080,938 $

415,120,226 54,039,288

$ $

2,816,489 2,574,559 (241,929) 366,143,518 $

2,855,901 2,610,586 (245,315) 371,267,128 $

2,895,7 2,647,0 (248,7 376,452,2

420,940,470 54,796,952

426,830,879 55,563,751

$ $

432,791,9 56,339,7

6,071,472.43 5,520,758.75 (550,714) 631,433,133 $

6,156,433.27 5,598,013.20 (558,420) 640,269,060 $

6,242,413. 5,676,194. (566,2 649,211,0

730,396,382 98,963,249

740,617,146 100,348,086

$ $

750,960,5 101,749,5

2,501,672 2,274,757 (226,914) 260,173,837 $

2,536,679 2,306,589 (230,090) 263,814,566 $

2,572,1 2,338,8 (233,3 267,498,9

300,950,361 40,776,524

305,161,694 41,347,128

$ $

309,423,5 41,924,5

$ $

5,987,523.62 5,444,424.52 (543,099) 622,702,456 $

720,297,364 97,594,908

$ $

Phase 2

(Elasticity) $ 276,722,225 $ 280,638,411 284,602,804 Proposed Price & Revenue (Elasticity) $ $ Change in Revenue $ 37,493,793 $ 38,024,407 38,561,552 Change$ in Revenue $

vidence

2059 50

Phase 2

(Elasticity) $ 671,595,513 $ 681,099,964 690,721,413 Proposed Price & Revenue (Elasticity) $ $ Change in Revenue $ 90,996,171 $ 92,283,953 93,587,588 Change$ in Revenue $

te 128

2011 2

Phase 2

(Elasticity) $ 387,052,480 $ 392,530,064 398,075,078 Proposed Price & Revenue (Elasticity) $ $ Change in Revenue $ 50,385,500 $ 51,098,558 51,820,394 Change$ in Revenue $

2058 49

$ $

292,677,802 39,655,654

$ $

Phase 3 0.00% 4.29% 2,312,878 2,345,430 2,100,280 2,129,840 (212,598) (215,590) 228,974,963 $ 232,197,572 $ 99.00

2,467,081 2,243,305 (223,777) 256,576,475 $

296,789,192 40,212,717

$ $

2,378,377 2,159,759 (218,619) 235,459,366 $

2,411,724 2,190,040 (221,684) 238,760,653 $

2,445,472 2,220,686 (224,786) 242,101,738 $

2,479,6 2,251,7 (227,9 245,482,9

272,777,550 37,318,183

276,602,061 37,841,408

280,472,678 38,370,939

284,389,7 38,906,8

120% 7.50

$ 126.30 265,265,427 $ 27.30 36,290,464

$ $

268,998,791 36,801,219

$ $

Penndesign 2012 studio report

058 49

2059 50

2060 51

2061 52

2062 53

2063 54

2064 55

2065 56

46 62 84) 38 $

2,816,489 2,574,559 (241,929) 366,143,518 $

2,855,901 2,610,586 (245,315) 371,267,128 $

2,895,786 2,647,046 (248,741) 376,452,232 $

2,936,148 2,683,941 (252,208) 381,699,288 $

2,976,990 2,721,275 (255,716) 387,008,746 $

3,018,316 2,759,050 (259,266) 392,381,055 $

3,060,128 2,797,271 (262,857) 397,816,653

26 88

420,940,470 54,796,952

426,830,879 55,563,751

432,791,984 56,339,752

438,824,313 57,125,025

444,928,384 57,919,637

451,104,711 58,723,656

457,353,799 59,537,146

$ $

62 52 99) 56 $

6,071,472.43 5,520,758.75 (550,714) 631,433,133 $

6,156,433.27 5,598,013.20 (558,420) 640,269,060 $

6,242,413.80 5,676,194.86 (566,219) 649,211,035 $

6,329,421.63 5,755,310.63 (574,111) 658,259,849 $

6,417,464.24 5,835,367.33 (582,097) 667,416,281 $

6,506,549.04 5,916,371.68 (590,177) 676,681,100 $

6,596,683.33 5,998,330.32 (598,353) 686,055,066

64 08

730,396,382 98,963,249

740,617,146 100,348,086

750,960,580 101,749,544

761,427,596 103,167,747

772,019,097 104,602,816

782,735,973 106,054,873

793,579,101 107,524,035

$ $

81 05 77) 75 $

2,501,672 2,274,757 (226,914) 260,173,837 $

2,536,679 2,306,589 (230,090) 263,814,566 $

2,572,106 2,338,803 (233,303) 267,498,991 $

2,607,956 2,371,401 (236,555) 271,227,438 $

2,644,233 2,404,387 (239,845) 275,000,227 $

2,680,939 2,437,764 (243,175) 278,817,676 $

2,718,078 2,471,534 (246,544) 282,680,097

92 17

300,950,361 40,776,524

305,161,694 41,347,128

309,423,572 41,924,581

313,736,371 42,508,933

318,100,461 43,100,234

322,516,211 43,698,535

326,983,981 44,303,885

$ $

77 59 19) 66 $

2,411,724 2,190,040 (221,684) 238,760,653 $

2,445,472 2,220,686 (224,786) 242,101,738 $

2,479,625 2,251,700 (227,925) 245,482,923 $

2,514,187 2,283,085 (231,102) 248,904,506 $

2,549,159 2,314,843 (234,317) 252,366,781 $

2,584,546 2,346,977 (237,569) 255,870,041 $

2,620,349 2,379,489 (240,860) 259,414,572

50 83

276,602,061 37,841,408

280,472,678 38,370,939

284,389,749 38,906,827

288,353,622 39,449,117

292,364,637 39,997,856

296,423,132 40,553,091

300,529,439 41,114,867

$ $

229

$ $

Penndesign 2012 studio report

B-8 Financing Model Assumptions Financial Model Assumptions The following assumptions were made in the creation of the three financial model cases. All revenue assumptions were the same for all three cases. This year’s studio did not seek to replicate revenue and cost estimates from previous years’ work. Instead, where appropriate, we reference that work and build off of it. Please reference the appropriate materials for more detail. Costs were linearly scaled to reflect the proposed phasing in the 2012 report. Revenue · HSR ridership and passenger revenue was estimated using the methodology outlined in the Finance section of the 2012 studio report. · Based on industry standards as outlined by the 2011 studio report, food and beverage revenue were estimated to be 10% of HSR ridership (i.e. one out of every ten riders spends one dollar on food/beverage). · HSR advertising revenue was estimated at $5.00 per passenger. This estimate is in line with the $4.54 per passenger industry standard used by the 2011 studio team. · A passenger facility charge was set at $7.50 per trip. The 2011 studio teamed assumed a $2.50 charge per all NEC inter-city trips, both HSR and non-HSR. Our studio assumed that only HSR riders would pay, and that the facility charge would equal 5% of an average ticket price. · Utility easement and rolling stock leaseback revenues were taken from the 2011 studio report. Utility easements were broken down by utility and estimated in dollars per mile of track per year. Rolling stock leaseback was estimated at 12% of original rolling stock cost. · Station retail estimates were extracted from the 2011 studio report, and were estimated at $5 per NEC inter-city trip. Costs · O&M growth rates were kept in line with ridership growth rates, and are related to the progressive introduction of phases 1, 2, and 3 on to the corridor. · The initial O&M/Non-Labor Cost HSR was extracted the 2011 studio report, and was grown in step with the O&M growth rate. · The O&M Labor/Non-Labor Non-HSR NEC Cost was taken from the 2011 studio report, but the first three years were backed into by assuming each subsequent year was 0.98 of the 2023 value. · Construction cost estimates for the three phases were extracted from the 2011 studio. 230

Penndesign 2012 studio report

· Environmental mitigation is estimated to be 3% of construction cost (in line with industry standards). Mitigation is only required for the first 5 years after the project commences. · Existing corridor upgrades do not include the $10 billion “shopping list” discussed in the 2012 document. These upgrades are required to begin construction of the HSR line. Total estimates for this work are $10 billion and are carried out over 5 years. · Rolling stock costs are taken from the 2011 studio report.

Debt Services · RRIF loans were assumed to be 35 years at 4%. · Infrastructure Bank loans were assumed to be 30 years at 4%. · TIFIA loans were assumed to be 35% at the current TIFIA rate of 3.18%. Bond Proceeds Bonded tax amounts and debt-services were calculated using a bond-sizing model. Each bond rate was estimated to be 4.5% for 40 years, with 4 years of capitalized interest. Transaction fees, total proceeds, and annual debt-service payments can be found on the individual model Excel sheets. The issuing government of the debt pays debt-service. Undiscounted 20-year cash flows were calculated using the tax and value capture scenarios described in the Financing section, and were grown at historical rates. See Excel models for more detail.

231

Penndesign 2012 studio report

B-9 Best Case Financing Model BEST CASE MODEL Year HSR Ridership HSR Ridership Revenue HSR Food/Beverage Revenue HSR Advertising Revenue HSR Passenger Facility Charge Utility Easements Rolling Stock Leaseback Station Retail TOTAL REVENUE O&M Growth Rate (In line with ridership growth) O&M Labor/Non-Labor Cost HSR O&M Labor/Non-Labor Non-HSR NEC Cost Construction Cost Environmental Mitigation (% of ConstructionCost) Existing Corridor Upgrades Overhead Cost Allocation (% of Construction Cost) Rolling Stock TOTAL COSTS

2012

$ $

2013

2014

2015

2016

2017 $

10% 5.00 7.50

(38,791,037,236)

2018 $

(272,940)

21,425,495

21,834,005

(272,940)

21,425,495

21,834,005

18%

0 0

(251,000,000) (4,000,000,000)

(251,000,000) (3,000,000,000)

(720,000,000) (4,971,000,000)

(540,000,000) (3,791,000,000)

(4,949,574,505) -

(3,769,165,995) -

Unlevered Cash Flow Sales Tax Bond Debt Service I Sales Tax Bond Debt Service II Gas Tax Bond Debt Service TIF Bond Debt Service CIL Bond Debt Service TIFIA Debt Service I TIFIA Debt Service II Infrastructure Bank Debt Service I RRIF Debt Service I RRIF Debt Service II

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds I TIFIA Proceeds II Sales Tax Proceeds I Sales Tax Proceeds II Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant

62,306,077,499

34,348,513,684 3,431,669,401 5,900,000,000

Net Cash Flow Reserve NPV

0 0 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

232

26,340,899,562

0 0

(272,940) -

272,940.0 (0) (0)

34,348,513,683.8 29,398,939,179 29,398,939,178

(3,769,165,995) 25,629,773,183

Penndesign 2012 studio report

2015

2016

2017 $

2019 $

2020 $

2021 $

2022 $

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

(272,940)

21,425,495

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

$ $

2023 $

21,425,495

2018 $

(272,940)

2024 $

27,110,860 37,839,057 64,949,918

27,633,078 76,434,896 104,067,973

(296,781,817) $ (302,838,588) $ (309,018,968) $ (315,325,477) $ (321,631,987) (3,315,000,000) (3,381,000,000) (3,449,000,000) (3,771,000,000) (3,847,000,000)

2025 392,027 76,445,200 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

2026 823,269 160,537,489 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

2027 1,295,653 252,652,340 129,565 6,478,265 9,717,398 32,627,906 169,377,442 103,047,500 574,030,416

4.9% (1,212,000,000)

(1,271,509,200)

(1,333,940,302)

(1,

(414,577,617) (5,980,000,000)

(470,194,272) (6,100,000,000)

(522,990,258) (6,222,000,000)

( (4,

0 0

(251,000,000) (4,000,000,000)

(251,000,000) (3,000,000,000)

(251,000,000) (2,000,000,000)

(251,000,000) $ (1,000,000,000) $

(720,000,000) (4,971,000,000)

(540,000,000) (3,791,000,000)

(956,700,000) (6,819,481,817)

(788,580,000) (5,723,418,588)

(620,820,000) (4,378,838,968)

(678,780,000) (4,765,105,477)

(692,460,000) (4,861,091,987)

(1,076,400,000) (315,325,477) (8,998,303,094)

(1,098,000,000) (321,631,987) (9,261,335,459)

(1,119,960,000) (253,078,426) (9,451,968,986)

( ( (7,

(4,949,574,505) -

(3,769,165,995) -

(3,768,749,315) -

(6,796,806,118) -

(5,697,321,645) -

(4,352,240,085) -

(4,700,155,560) -

(4,757,024,014) -

(8,693,735,812) -

(8,825,005,921) -

(8,877,938,570)

(7,

(198,453,781.7) (341,197,584.9) -

(19 (34

(272,940) -

$ $

0 0

272,940.0 (0) (0)

34,348,513,683.8 29,398,939,179 29,398,939,178

233

(3,769,165,995) 25,629,773,183

(3,768,749,315) 21,861,023,868

(6,796,806,118) 15,064,217,750

(5,697,321,645) 9,366,896,106

(4,352,240,085) 5,014,656,021

62,306,077,499.2 -

3,431,669,401.0 5,900,000,000.0 -

57,605,921,940 62,620,577,960

4,574,645,387 67,195,223,348

(9,233,387,178) 57,961,836,169

(9,364,657,288) 48,597,178,882

(9,417,589,936) 39,179,588,945

(7, 31,

Penndesign 2012 studio report

B-9 Best Case Financing Model 2020 -

22,675,699 22,675,699

BEST CASE MODEL 2021 Year 2022 2023 HSR Ridership HSR $ Ridership Revenue $ HSR Food/Beverage Revenue HSR Advertising- Revenue HSR Passenger Facility Charge 26,096,944 Utility Easements 26,598,883 27,110,860 Rolling Stock Leaseback 37,839,057 Station Retail 26,096,944 TOTAL REVENUE 26,598,883 64,949,918

O&M Growth Rate (In line with ridership growth) - O&M $ Labor/Non-Labor - $ Cost HSR O&M Labor/Non-Labor Non-HSR NEC 296,781,817) $ (302,838,588) Cost $ (309,018,968) $ (315,325,477) Cost 315,000,000) (3,381,000,000) Construction (3,449,000,000) (3,771,000,000) Environmental Mitigation (% of 251,000,000) (251,000,000) ConstructionCost) $ - $ Corridor Upgrades 000,000,000) (1,000,000,000) Existing $ - $ Overhead Cost Allocation (% of Cost) 956,700,000) (788,580,000) Construction (620,820,000) (678,780,000) Rolling Stock COSTS 819,481,817) (5,723,418,588) TOTAL (4,378,838,968) (4,765,105,477) -

796,806,118) -

Cash Flow (4,700,155,560) (5,697,321,645) Unlevered (4,352,240,085) Service I - Sales Tax Bond Debt Sales Tax Bond Debt Service II - Gas Tax Bond Debt Service - TIF Bond Debt Service - CIL Bond Debt Service - TIFIA Debt Service - I TIFIA Debt Service II Infrastructure Bank Debt Service I - RRIF Debt Service - I RRIF Debt Service II

796,806,118) 064,217,750

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank - Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds I TIFIA Proceeds II Sales Tax Proceeds - I Sales Tax Proceeds II62,306,077,499.2 Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant -

Cash Flow (5,697,321,645) Net (4,352,240,085) 9,366,896,106 Reserve 5,014,656,021

57,605,921,940 62,620,577,960

NPV

2024 $ $ $

$ 10% 5.00 7.50 27,633,078 76,434,896 - 5% 104,067,973

(321,631,987) (38,791,037,236) (3,847,000,000)

$ $

3% -

2026 2012 823,269 160,537,489 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

2027 2013 1,295,653 252,652,340 129,565 6,478,265 9,717,398 32,627,906 169,377,442 103,047,500 574,030,416

2028 2014 1,811,198 353,183,660 181,120 9,055,991 13,583,987 33,260,464 201,605,704 110,465,000 721,335,926

2029 2015 2,372,024 462,544,698 237,202 11,860,120 17,790,181 33,905,673 234,478,531 117,882,500 878,698,906

2030 2016 4,009,803 924,560,673 $ 400,980 20,049,015 30,073,523 34,563,787 (272,940) 259,315,778 125,300,000 1,394,263,756 (272,940)

2031 2017 5,834,724 1,345,341,935 583,472 29,173,619 43,760,429 35,235,063 21,425,495 284,649,771 140,135,000 1,878,879,288 21,425,495

2018 $

21,834,005 21,834,005

4.9% (1,212,000,000)

(1,271,509,200)

(1,333,940,302)

(1,399,436,771)

9.8236% (1,468,149,116) $ (1,612,374,213) - $ (1,770,767,406) - $

(414,577,617) (5,980,000,000)

(470,194,272) (6,100,000,000)

(522,990,258) (6,222,000,000)

(572,824,132) (4,769,000,000)

(619,547,451) (518,423,474) (584,298,397) (4,864,000,000) $ (3,453,000,000) - $ (3,522,000,000) - $

00-

(251,000,000) (4,000,000,000) -

(251,000,000) (3,000,000,000)

(692,460,000) 18% (4,861,091,987)

(1,076,400,000) (315,325,477) (8,998,303,094)

(1,098,000,000) (321,631,987) (9,261,335,459) 0

(1,119,960,000) (253,078,426) (9,451,968,986) 0

(858,420,000) (258,139,995) (7,857,820,897) 0

(875,520,000) (263,302,795) (8,090,519,361) 0

(621,540,000) 0 (268,568,851) (6,473,906,538) 0

(633,960,000) (720,000,000) (273,940,228) (6,784,966,030) (4,971,000,000)

(540,000,000) (3,791,000,000)

(4,757,024,014) -

(8,693,735,812) -

(8,825,005,921) -

(8,877,938,570) -

(7,136,484,971) -

(7,211,820,456) -

(5,079,642,782) (272,940) -

(4,906,086,742) (4,949,574,505) -

(3,769,165,995) -

(198,453,781.7) (341,197,584.9) -

62,306,077,499 -

3,431,669,401.0 5,900,000,000.0 -

34,348,513,684 3,431,669,401 5,900,000,000 -

4,574,645,387 67,195,223,348

(9,233,387,178) 57,961,836,169

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

234

2025 392,027 76,445,200 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

26,340,899,562

(9,364,657,288) 0 48,597,178,882 0

(9,417,589,936) 0 39,179,588,945 0

(7,676,136,338) 0 31,503,452,607 0

(7,751,471,822) 0 23,751,980,785 0

34,348,513,683.8 272,940.0 (5,619,294,148) (0) 29,398,939,179 (5,445,738,109) 18,132,686,637 (0) 12,686,948,528 29,398,939,178

(3,769,165,995) 25,629,773,183

Penndesign 2012 studio report

2029 ,372,024 ,544,698 $ 237,202 ,860,120 $ ,790,181 $ ,905,673 ,478,531 ,882,500 ,698,906

2030 4,009,803 924,560,673 400,980 10% 20,049,015 5.00 30,073,523 7.50 34,563,787 259,315,778 125,300,000 5% 1,394,263,756

dership 9.8236% ,149,116) (1,612,374,213) R R NEC ,547,451) (518,423,474) ,000,000) (38,791,037,236) (3,453,000,000) -

2031 5,834,724 1,345,341,935 $ 583,472 29,173,619 43,760,429 35,235,063 284,649,771 140,135,000 1,878,879,288

2032 7,870,400 1,814,718,100 787,040 39,351,999 59,027,999 35,919,764 310,490,443 154,970,000 2,415,265,344

2033 10,138,227 2,337,622,635 1,013,823 50,691,137 76,036,705 36,618,159 336,847,928 169,805,000 3,008,635,388

2034 12,661,720 2,919,477,166 1,266,172 63,308,600 94,962,900 37,330,522 363,732,563 184,640,000 3,664,717,924

2035 15,437,749 3,353,594,307 1,543,775 77,188,744 115,783,116 38,057,133 391,154,891 199,475,000 4,176,796,967

2036 18,546,809 4,028,985,886 1,854,681 92,734,044 139,101,066 39,319,409 419,125,666 214,310,000 4,935,430,751

2037 21,996,326 4,778,336,085 2,199,633 109,981,628 164,972,442 39,554,241 447,655,856 229,145,000 5,771,844,885

2038 25,820,515 5,609,077,743 2,582,052 129,102,577 193,653,865 40,325,326 476,756,650 243,980,000 6,695,478,213

2039 30,056,972 6,529,377,554 3,005,697 150,284,861 225,427,291 41,111,832 506,439,459 258,815,000 7,714,461,695

2040 30,889,040 6,710,130,456 3,088,904 154,445,200 231,667,800 41,914,069 521,577,692 273,650,000 7,936,474,121

2041 31,743,723 6,895,796,207 3,174,372 158,718,617 238,077,925 42,732,350 537,018,690 287,700,000 8,163,218,161

(2,135,762,077)

(2,345,570,800)

(2,575,990,293)

(2,829,045,276)

(3,106,959,367)

(3,412,174,628)

(3,747,373,015)

2.5232% (3,841,927,855)

(3,938,868,531)

(4,

(584,298,397) (3,522,000,000)

(634,696,196) (3,592,000,000)

(668,089,985) (3,664,000,000)

(682,802,750) (3,737,000,000)

(676,992,604) (3,812,000,000)

(648,636,584) (3,888,000,000)

(595,512,862) (3,966,000,000)

(515,181,208) (4,045,000,000)

(404,961,528) (4,126,000,000)

(409,330,456) -

(495,298,780) -

(

3%-

(633,960,000) (273,940,228) (6,784,966,030)

(646,560,000) (206,977,061) (7,024,953,770)

(659,520,000) (211,116,602) (7,338,488,664)

(672,660,000) (215,338,934) (7,653,372,485)

(686,160,000) (219,645,713) (7,970,788,610)

(699,840,000) (224,038,627) (8,289,560,487)

(713,880,000) (228,519,400) (8,610,871,629)

(728,100,000) (233,089,788) (8,933,545,623)

(742,680,000) (237,751,583) (9,258,766,126)

(242,506,615) (4,493,764,925)

(247,356,747) (4,681,524,058)

,820,456)

(5,079,642,782)

(4,906,086,742) -

(4,609,688,426) -

(4,329,853,276) -

(3,988,654,560) -

(3,793,991,643) -

(3,354,129,736) -

(2,839,026,744) -

53,781.7) 97,584.9) -

(198,453,781.7) (341,197,584.9) -

(198,453,781.7) -

(198,453,781.7) (341,197,584.9) -

(2,238,067,410) (198,453,781.7) (341,197,584.9) -

(1,544,304,431) (198,453,781.7) (341,197,584.9) -

3,442,709,196 (198,453,781.7) (341,197,584.9) (39,160,103.4)

(535,773,223.7)

(535,773,223.7) -

(693,961,189.6) (535,773,223.7) -

3,481,694,103 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

(5,619,294,148) 18,132,686,637

(1,944,720,513)

(621,540,000) 18% (268,568,851) (6,473,906,538)

,471,822) ,980,785

(1,770,767,406)

,520,000) ,302,795) ,519,361)

62,306,077,499 34,348,513,684 3,431,669,401 5,900,000,000 (5,445,738,109) 12,686,948,528

26,340,899,562

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

235

(5,149,339,792) 7,537,608,736

(4,869,504,643) 2,668,104,093

10,000,000,000.0

5,812,891,658 8,480,995,751

(4,869,416,233) 3,611,579,517

12,000,000,000.0

7,570,445,674 11,182,025,192

(4,608,412,524) 6,573,612,668

(4,007,453,190) 2,566,159,477

750,000,000.0 (2,563,690,211) 2,469,266

1,634,163,312 1,636,632,579

( (4,

(19 (34 (3

(69 (53

1,673,148,220 3,309,780,799

1, 5,

Penndesign 2012 studio report

B-9 Best Case Financing Model

2034 12,661,720 19,477,166 1,266,172 63,308,600 94,962,900 37,330,522 63,732,563 84,640,000 64,717,924

45,570,800)

82,802,750) 37,000,000) -

72,660,000) 15,338,934) 53,372,485)

88,654,560) -

,453,781.7) -

,000,000.0 -

12,891,658 80,995,751

2035 15,437,749 3,353,594,307 1,543,775 77,188,744 115,783,116 38,057,133 391,154,891 199,475,000 4,176,796,967

BEST CASE MODEL Year 2036 2037 HSR Ridership 18,546,809 21,996,326 Ridership Revenue $HSR 4,028,985,886 $ 4,778,336,085 HSR Food/Beverage Revenue 1,854,681 2,199,633 HSR Advertising 92,734,044Revenue109,981,628 HSR 139,101,066 Passenger Facility Charge 164,972,442 Utility Easements 39,319,409 39,554,241 Rolling Stock Leaseback 447,655,856 419,125,666 Station Retail 214,310,000 229,145,000 TOTAL REVENUE 4,935,430,751 5,771,844,885

O&M Growth Rate (In line with ridership growth) Labor/Non-Labor (3,106,959,367) Cost HSR (2,575,990,293) O&M (2,829,045,276) O&M Labor/Non-Labor Non-HSR NEC (676,992,604) Cost(648,636,584) (595,512,862) Cost (3,812,000,000) Construction (3,888,000,000) (3,966,000,000) Environmental Mitigation (% of - ConstructionCost)- Existing Corridor -Upgrades Overhead Cost Allocation (% of Cost) (686,160,000) Construction (699,840,000) (713,880,000) Stock (219,645,713) Rolling (224,038,627) (228,519,400) COSTS (7,970,788,610) TOTAL (8,289,560,487) (8,610,871,629) Cash Flow (2,839,026,744) (3,793,991,643) Unlevered (3,354,129,736) Sales Tax Bond-Debt Service I Sales Tax Bond Debt Service II Gas Tax Bond Debt Service Bond Debt Service (198,453,781.7) (198,453,781.7) TIF(198,453,781.7) Bond Debt Service (341,197,584.9) (341,197,584.9) CIL(341,197,584.9) TIFIA Debt Service - I TIFIA Debt Service II Infrastructure Bank Service I - Debt (693,961,189.6) Debt Service I (535,773,223.7) (535,773,223.7) RRIF (535,773,223.7) RRIF Debt Service - II RRIF Proceeds -I RRIF Proceeds II Infrastructure Bank Proceeds I 12,000,000,000.0 Infrastructure Bank Proceeds II TIFIA Proceeds -I TIFIA Proceeds II Sales Tax Proceeds I Sales Tax Proceeds II Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant Cash Flow (4,869,416,233) Net7,570,445,674 (4,608,412,524) 3,611,579,517 Reserve 11,182,025,192 6,573,612,668 -

NPV

2038 25,820,515 5,609,077,743 $ 2,582,052 10% $ 129,102,577 5.00 $ 193,653,865 7.50 40,325,326 476,756,650 243,980,0005% 6,695,478,213

2040 2032 2041 2033 2042 2034 2043 2035 2044 2036 2045 2037 2046 2038 30,889,040 7,870,400 10,138,227 12,661,720 15,437,749 18,546,809 21,996,326 25,820,515 31,743,723 32,621,629 33,523,378 34,449,610 35,459,625 36,498,468 1,814,718,100 $ $ 6,895,796,207 2,337,622,635 $ $ 7,086,506,514 2,919,477,166 $ $ 7,282,396,577 3,353,594,307 $ $ 7,483,605,184 4,028,985,886 $ $ 7,703,014,054 4,778,336,085 $ $ 7,928,685,539 5,609,077,743 $ $ 8 $ $ 6,710,130,456 3,174,372 3,262,163 3,352,338 3,444,961 3,545,962 3,649,847 787,040 1,013,823 1,266,172 1,543,775 1,854,681 2,199,633 2,582,052 3,088,904 154,445,200 158,718,617 163,108,143 167,616,890 172,248,052 177,298,125 182,492,342 39,351,999 50,691,137 63,308,600 77,188,744 92,734,044 109,981,628 129,102,577 231,667,800 238,077,925 244,662,214 251,425,334 258,372,078 265,947,187 273,738,513 59,027,999 76,036,705 94,962,900 115,783,116 139,101,066 164,972,442 193,653,865 41,914,069 35,919,764 36,618,159 37,330,522 38,057,133 39,319,409 39,554,241 40,325,326 42,732,350 43,566,997 44,418,337 45,286,704 46,172,438 47,075,887 310,490,443 336,847,928 363,732,563 391,154,891 419,125,666 447,655,856 476,756,650 537,018,690 552,768,507 568,833,321 585,219,432 605,276,030 625,733,761 521,577,692 154,970,000 169,805,000 184,640,000 199,475,000 214,310,000 229,145,000 243,980,000 273,650,000 287,700,000 301,750,000 315,800,000 329,850,000 343,900,000 359,950,000 2,415,265,344 3,008,635,388 3,664,717,924 4,176,796,967 4,935,430,751 5,771,844,885 6,695,478,213 7,936,474,121 8,163,218,161 8,395,624,538 8,633,842,798 8,878,026,411 9,145,153,797 9,421,325,889 9

(3,412,174,628)

(3,747,373,015)

2.5232% (3,841,927,855) (1,944,720,513)

(3,938,868,531) (2,135,762,077)

(4,038,255,243) (2,345,570,800)

(4,140,149,711) (2,575,990,293)

(4,244,615,211) (2,829,045,276)

2.62% (4,355,875,065) (3,106,959,367)

(4,470,051,262) (3,412,174,628)

(515,181,208) (4,045,000,000) (38,791,037,236)

(404,961,528) (4,126,000,000)

(409,330,456) (634,696,196) (3,592,000,000)

(495,298,780) (668,089,985) (3,664,000,000)

(578,871,528) (682,802,750) (3,737,000,000)

(659,987,991) (676,992,604) (3,812,000,000)

(738,585,922) (648,636,584) (3,888,000,000)

(838,299,435) (595,512,862) (3,966,000,000)

(932,500,450) (515,181,208) (4,045,000,000)

3% -

---

18% (728,100,000) (233,089,788) (8,933,545,623)

(742,680,000) (237,751,583) (9,258,766,126)

(646,560,000) (242,506,615) (206,977,061) (4,493,764,925) (7,024,953,770)

(659,520,000) (247,356,747) (211,116,602) (4,681,524,058) (7,338,488,664)

(672,660,000) (126,151,941) (215,338,934) (4,743,278,713) (7,653,372,485)

(686,160,000) (128,674,980) (219,645,713) (4,928,812,683) (7,970,788,610)

(699,840,000) (131,248,480) (224,038,627) (5,114,449,613) (8,289,560,487)

(713,880,000) (133,873,449) (228,519,400) (5,328,047,949) (8,610,871,629)

(728,100,000) (136,550,918) (233,089,788) (5,539,102,630) (8,933,545,623)

(2,238,067,410) (198,453,781.7) (341,197,584.9) -

(1,544,304,431) (198,453,781.7) (341,197,584.9) -

3,442,709,196 (4,609,688,426) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) -

(693,961,189.6) (535,773,223.7) -

3,481,694,103 (4,329,853,276) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,652,345,825 (3,988,654,560) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,705,030,115 (3,793,991,643) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) (535,773,223.7) -

3,763,576,798 (3,354,129,736) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

3,817,105,848 (2,839,026,744) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

3,882,223,260 (2,238,067,410) ---(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

---

750,000,000.0

62,306,077,499

(4,007,453,190) 2,566,159,477 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

236

2039 30,056,972 6,529,377,554 3,005,697 150,284,861 225,427,291 41,111,832 506,439,459 258,815,000 7,714,461,695

34,348,513,684 3,431,669,401 5,900,000,000 (2,563,690,211) 2,469,266 26,340,899,562

-----(5,149,339,792) 1,634,163,312 7,537,608,736 1,636,632,579

----(4,869,504,643) 1,673,148,220 2,668,104,093 3,309,780,799

10,000,000,000.0 -

------5,812,891,658 1,843,799,942 8,480,995,751 5,153,580,741

-----(4,869,416,233) 1,896,484,232 3,611,579,517 7,050,064,972

-12,000,000,000.0 ------7,570,445,674 1,955,030,915 11,182,025,192 9,005,095,887

------(4,608,412,524) 2,008,559,964 6,573,612,668 11,013,655,852

(1 (3

(6 (5

------(4,007,453,190) 2,073,677,376 2,566,159,477 13,087,333,228

2 15

Penndesign 2012 studio report

2043 3,523,378 2,396,577 3,352,338 7,616,890 1,425,334 4,418,337 8,833,321 5,800,000 3,842,798

2044 34,449,610 7,483,605,184 3,444,961 172,248,052 258,372,078 45,286,704 585,219,432 329,850,000 8,878,026,411

2045 35,459,625 7,703,014,054 3,545,962 177,298,125 265,947,187 46,172,438 605,276,030 343,900,000 9,145,153,797

2046 36,498,468 7,928,685,539 3,649,847 182,492,342 273,738,513 47,075,887 625,733,761 359,950,000 9,421,325,889

BEST CASE MODEL 2047 Year 2048 2049 2050 37,566,948 HSR Ridership 38,665,895 39,796,160 40,363,339 Revenue 8,160,795,046 HSR $ Ridership 8,399,522,830 $ 8,645,054,120 $ 8,768,264,431 10% 3,756,695 HSR Food/Beverage 3,866,589 Revenue3,979,616 4,036,334 Revenue 198,980,798 $ 5.00 187,834,742 HSR Advertising 193,329,473 201,816,695 Facility Charge 7.50 281,752,113 HSR Passenger 289,994,209 298,471,197 $ 302,725,043 47,997,404 Utility Easements 48,937,353 49,896,100 50,874,022 Leaseback 689,594,777 646,600,647 Rolling Stock 667,884,870 700,666,830 Retail 5% 376,000,000 Station 392,050,000 408,100,000 424,150,000 REVENUE 9,704,736,647 TOTAL 9,995,585,324 10,294,076,608 10,452,533,355

8,674,980) 8,812,683)

(131,248,480) (5,114,449,613)

(133,873,449) (5,328,047,949)

(136,550,918) (5,539,102,630)

O&M Growth Rate (In line with ridership growth) Labor/Non-Labor Cost HSR (4,587,220,245)O&M(4,707,460,463) (4,830,852,416) O&M Labor/Non-Labor Non-HSR NEC (1,023,775,533)Cost (1,112,047,575) (1,197,237,437) - Construction CostEnvironmental Mitigation (% of ConstructionCost) - Existing Corridor Upgrades Overhead Cost Allocation (% of - Construction Cost) Stock (167,138,324)Rolling(170,481,090) (173,890,712) COSTS (5,778,134,102)TOTAL (5,989,989,128) (6,201,980,566)

5,030,115 453,781.7) 197,584.9) 160,103.4) 961,189.6) 773,223.7) -

3,763,576,798 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,817,105,848 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,882,223,260 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

Cash Flow 3,926,602,545 Unlevered 4,005,596,195 4,092,096,043 - Sales Tax Bond Debt - Service I - Sales Tax Bond Debt - Service II - Gas Tax Bond Debt - Service TIF Bond Debt Service (198,453,781.7) (198,453,781.7) (198,453,781.7) Debt Service (341,197,584.9) (341,197,584.9)CIL Bond (341,197,584.9) Service I (39,160,103.4)TIFIA Debt (39,160,103.4) (39,160,103.4) - TIFIA Debt Service- II Infrastructure Bank Debt Service I (693,961,189.6) (693,961,189.6) (693,961,189.6) Debt Service I (535,773,223.7)RRIF(535,773,223.7) (535,773,223.7) - RRIF Debt Service- II -

0,149,711)

(4,244,615,211)

2.62% (4,355,875,065)

9,987,991) -

(738,585,922) -

(838,299,435) -

(4,470,051,262) (932,500,450) -

6,484,232 0,064,972

1,955,030,915 9,005,095,887

2,008,559,964 11,013,655,852

2,073,677,376 13,087,333,228

- RRIF Proceeds I RRIF Proceeds II - Infrastructure Bank- Proceeds I Infrastructure Bank Proceeds II - TIFIA Proceeds I TIFIA Proceeds II - Sales Tax Proceeds - I Sales Tax Proceeds II - Gas Tax Proceeds- TIF Proceeds - CIL Proceeds Federal Grant -

Flow 2,118,056,662 Net Cash 2,197,050,312 Reserve 15,205,389,890 17,402,440,202

2,283,550,159 19,685,990,362

NPV

237

2052 2051 41,519,030 40,937,609 $ 8,893,014,944 $ 9,019,319,093 4,151,903 4,093,761 207,595,150 204,688,043 311,392,726 307,032,065 52,888,932 51,871,502 723,479,688 711,960,324 445,550,000 434,850,000 10,764,377,492 10,607,510,639

2053 42,107,665 $ 9,147,190,248 4,210,767 210,538,325 315,807,488 53,926,711 735,229,439 456,250,000 10,923,152,977

2054 42,703,575 $ 9,276,641,710 4,270,357 213,517,873 320,276,810 54,985,245 747,214,185 466,950,000 11,083,856,181

2055 43,306,820 $ 9,407,686,703 4,330,682 216,534,099 324,801,149 56,064,950 759,438,626 477,650,000 11,246,506,209

9,5

2 3

7 4 11,4

1.75% (4,915,266,731)

(5,001,156,102)

(5,088,546,304)

(5,177,463,562)

(5,267,934,560)

(5,359,986,449)

(5,4

(1,229,208,778) (38,791,037,236) -

(1,276,823,504) -

(1,322,974,305) -

(1,938,804,152) -

(1,993,373,569) -

(1,910,802,606) -

(1,9

3%-

18%(177,368,526) (6,321,844,036)

(180,915,897) (6,458,895,503)

(92,267,107) (6,503,787,717)

(94,112,450) (7,210,380,163)

(95,994,699) (7,357,302,828)

(669,083,049) (7,939,872,104)

4,130,689,319 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

4,148,615,137 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

4,260,589,776 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,712,772,814 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,726,553,353 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,306,634,106 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

2,322,143,436 22,008,133,798 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

34,348,513,684 3,431,669,401 5,900,000,000 2,340,069,253 24,348,203,051 26,340,899,562

2,452,043,893 26,800,246,944

1,904,226,931 28,704,473,874

1,918,007,470 30,622,481,344

3,3

(69 (53

62,306,077,499 -

(6 (8,0

1,498,088,222 32,120,569,567

2,0 34,1

ASE MODEL

dership dership Revenue od/Beverage Revenue vertising Revenue ssenger Facility Charge asements Stock Leaseback Retail REVENUE

Penndesign 2012 studio report

B-9 Best Case Financing Model BEST CASE MODEL Year HSR Ridership HSR Ridership Revenue HSR Food/Beverage 10% Revenue HSR Advertising Revenue $ 5.00 HSR Passenger Facility Charge $ 7.50 Utility Easements Rolling Stock Leaseback Station Retail 5% TOTAL REVENUE

owth Rate (In line with ridership O&M Growth Rate (In line with ridership growth) bor/Non-Labor Cost HSR O&M Labor/Non-Labor Cost HSR bor/Non-Labor Non-HSR NEC O&M Labor/Non-Labor Non-HSR NEC Cost ction Cost Construction Cost (38,791,037,236) mental Mitigation (% of Environmental Mitigation (% of ctionCost) ConstructionCost) 3% Corridor Upgrades Existing Corridor Upgrades ad Cost Allocation (% of Overhead Cost Allocation (% of ction Cost) Construction Cost) 18% Stock Rolling Stock COSTS TOTAL COSTS

ed Cash Flow ax Bond Debt Service I ax Bond Debt Service II x Bond Debt Service d Debt Service d Debt Service ebt Service I ebt Service II cture Bank Debt Service I ebt Service I ebt Service II

oceeds I oceeds II cture Bank Proceeds I cture Bank Proceeds II roceeds I roceeds II ax Proceeds I ax Proceeds II x Proceeds ceeds ceeds Grant

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds I TIFIA Proceeds II Sales Tax Proceeds I 62,306,077,499 Sales Tax Proceeds II 34,348,513,684 Gas Tax Proceeds 3,431,669,401 TIF Proceeds 5,900,000,000 CIL Proceeds Federal Grant

h Flow e

Net Cash Flow Reserve NPV

26,340,899,562

2052 2053 41,519,030 42,107,665 9,019,319,093 $ 9,147,190,248 4,151,903 4,210,767 10% 207,595,150 210,538,325 $ 5.00 311,392,726 315,807,488 $ 7.50 52,888,932 53,926,711 723,479,688 735,229,439 445,550,000 456,250,000 5% 10,764,377,492 10,923,152,977

(5,088,546,304)

(5,177,463,562)

(5,267,934,560) (1,944,720,513)

(5,359,986,449) (2,135,762,077)

(5,453,646,852) (2,345,570,800)

(5,548,943,877) (2,575,990,293)

(5,645,906,122) (2,829,045,276)

(5,744,562,686) (3,106,959,367)

(5,844,943,174) (3,412,174,628)

(

(1,322,974,305) (38,791,037,236)

(1,938,804,152) -

(1,993,373,569) (634,696,196) (3,592,000,000)

(1,910,802,606) (668,089,985) (3,664,000,000)

(1,960,006,695) (682,802,750) (3,737,000,000)

(2,007,798,277) (676,992,604) (3,812,000,000)

(2,054,153,235) (648,636,584) (3,888,000,000)

(2,099,047,045) (595,512,862) (3,966,000,000)

(2,011,236,158) (515,181,208) (4,045,000,000)

(

3% -

---

18% (92,267,107) (6,503,787,717)

(94,112,450) (7,210,380,163)

(646,560,000) (95,994,699) (206,977,061) (7,357,302,828) (7,024,953,770)

(659,520,000) (669,083,049) (211,116,602) (7,939,872,104) (7,338,488,664)

(672,660,000) (682,464,710) (215,338,934) (8,096,118,257) (7,653,372,485)

(686,160,000) (560,286,881) (219,645,713) (8,117,029,035) (7,970,788,610)

(699,840,000) (571,492,619) (224,038,627) (8,271,551,977) (8,289,560,487)

(713,880,000) (582,922,471) (228,519,400) (8,426,532,202) (8,610,871,629)

(728,100,000) (594,580,921) (233,089,788) (8,450,760,253) (8,933,545,623)

4,260,589,776 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,712,772,814 (198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,726,553,353 (4,609,688,426) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,306,634,106 (4,329,853,276) --(198,453,781.7) (198,453,781.7) (341,197,584.9) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,315,778,301 (3,988,654,560) --(198,453,781.7) (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,460,694,181 (3,793,991,643) --(198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) (535,773,223.7) -

3,474,776,461 (3,354,129,736) --(198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

3,490,424,753 (2,839,026,744) --(198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

3,638,867,608 (2,238,067,410) ---(198,453,781.7) (341,197,584.9) (39,160,103.4) (693,961,189.6) (693,961,189.6) (535,773,223.7) (535,773,223.7) --

---

2,452,043,893 26,800,246,944

Tax Bond ounted 20 year amount saction fees roceeds Debt-Service to NE

Sales Tax Bond 62,306,077,499 Undiscounted 20 year amount 27,177,832,501 (+)Transaction fees 89,483,910,000 Total Proceeds 6,674,831,300 Annual Debt-Service to NE

62,306,077,499 27,177,832,501 89,483,910,000 6,674,831,300

x Bond ounted 20 year amount saction fees roceeds Debt-Service to NE

Gas Tax Bond 34,348,513,684 Undiscounted 20 year amount 10,393,666,316 (+)Transaction fees 44,742,180,000 Total Proceeds 3,337,431,000 Annual Debt-Service to NE

34,348,513,684 10,393,666,316 44,742,180,000 3,337,431,000

238

2054 2055 2056 2057 2058 2059 2060 2032 2033 2034 2035 2036 2037 2038 42,703,575 43,306,820 43,917,461 44,535,558 45,161,171 45,794,359 46,435,180 7,870,400 10,138,227 12,661,720 15,437,749 18,546,809 21,996,326 25,820,515 $$ 9,276,641,710 1,814,718,100 $$ 9,407,686,703 2,337,622,635 $$ 9,540,338,365 2,919,477,166 $$ 9,674,609,741 3,353,594,307 $$ 9,810,513,772 4,028,985,886 $$ 9,948,063,288 4,778,336,085 $$ 10,087,270,997 5,609,077,743 $$ 1 4,330,682 4,391,746 4,453,556 4,516,117 4,579,436 4,643,518 4,270,357 787,040 1,013,823 1,266,172 1,543,775 1,854,681 2,199,633 2,582,052 213,517,873 216,534,099 219,587,306 222,677,792 225,805,857 228,971,796 232,175,901 39,351,999 50,691,137 63,308,600 77,188,744 92,734,044 109,981,628 129,102,577 324,801,149 329,380,958 334,016,688 338,708,786 343,457,694 348,263,852 320,276,810 59,027,999 76,036,705 94,962,900 115,783,116 139,101,066 164,972,442 193,653,865 54,985,245 56,064,950 57,940,626 58,289,574 59,435,365 60,604,073 61,796,154 35,919,764 36,618,159 37,330,522 38,057,133 39,319,409 39,554,241 40,325,326 747,214,185 759,438,626 771,907,556 784,625,865 797,598,539 810,830,667 824,327,438 310,490,443 336,847,928 363,732,563 391,154,891 419,125,666 447,655,856 476,756,650 466,950,000 477,650,000 488,350,000 499,050,000 509,750,000 520,450,000 531,150,000 154,970,000 169,805,000 184,640,000 199,475,000 214,310,000 229,145,000 243,980,000 11,246,506,209 11,411,896,558 11,577,723,216 11,746,328,437 11,916,956,954 12,089,627,860 1 11,083,856,181 2,415,265,344 3,008,635,388 3,664,717,924 4,176,796,967 4,935,430,751 5,771,844,885 6,695,478,213

62,306,077,499 34,348,513,684 3,431,669,401 5,900,000,000 1,904,226,931 28,704,473,874

26,340,899,562

------1,918,007,470 (5,149,339,792) 30,622,481,344 7,537,608,736

----1,498,088,222 (4,869,504,643) 32,120,569,567 2,668,104,093

10,000,000,000.0

------2,046,883,784 5,812,891,658 34,167,453,351 8,480,995,751

----2,191,799,664 (4,869,416,233) 36,359,253,015 3,611,579,517

-12,000,000,000.0

----2,205,881,944 7,570,445,674 38,565,134,959 11,182,025,192

-----2,221,530,236 (4,608,412,524) 40,786,665,195 6,573,612,668

(

( (

----2,369,973,091 (4,007,453,190) 43,156,638,286 2,566,159,477

Penndesign 2012 studio report

2057 4,535,558 4,609,741 4,453,556 2,677,792 4,016,688 8,289,574 4,625,865 9,050,000 7,723,216

2058 45,161,171 9,810,513,772 4,516,117 225,805,857 338,708,786 59,435,365 797,598,539 509,750,000 11,746,328,437

2059 45,794,359 9,948,063,288 4,579,436 228,971,796 343,457,694 60,604,073 810,830,667 520,450,000 11,916,956,954

2060 46,435,180 $ 10,087,270,997 4,643,518 232,175,901 348,263,852 61,796,154 824,327,438 531,150,000 12,089,627,860

2061 47,083,692 $ 10,228,149,477 4,708,369 235,418,462 353,127,693 63,012,077 838,094,144 541,850,000 12,264,360,222

2062 47,739,953 $ 10,370,711,165 4,773,995 238,699,765 358,049,647 64,252,319 852,136,184 552,550,000 12,441,173,074

2063 48,404,018 $ 10,514,968,345 4,840,402 242,020,092 363,030,138 65,517,365 866,459,066 563,250,000 12,620,085,407

2064 49,075,945 $ 10,660,933,142 4,907,594 245,379,723 368,069,584 66,807,712 881,068,404 573,950,000 12,801,116,160

2065 49,755,787 $ 10,808,617,506 4,975,579 248,778,933 373,168,399 68,123,867 895,969,930 584,650,000 12,984,284,212

8,943,877)

(5,645,906,122)

(5,744,562,686)

(5,844,943,174)

(5,947,077,711)

(6,050,996,947)

(6,156,732,068)

(6,264,314,804)

(6,373,777,441)

7,798,277) -

(2,054,153,235) -

(2,099,047,045) -

(2,011,236,158) -

(2,050,508,043) -

(2,088,190,182) -

(2,124,255,289) -

(2,158,675,611) -

(2,191,422,917) -

0,286,881) 7,029,035)

(571,492,619) (8,271,551,977)

(582,922,471) (8,426,532,202)

(594,580,921) (8,450,760,253)

(606,472,539) (8,604,058,293)

(487,383,386) (8,626,570,515)

(497,131,054) (8,778,118,411)

(507,073,675) (8,930,064,090)

(517,215,148) (9,082,415,506)

0,694,181 160,103.4) 961,189.6) 773,223.7) -

3,474,776,461 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,490,424,753 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,638,867,608 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,660,301,929 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,814,602,559 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,841,966,996 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,871,052,071 (39,160,103.4) (693,961,189.6) (535,773,223.7) -

3,901,868,705 -

(39,160,103.4) (693,961,189.6) (535,773,223.7) -

1,799,664 9,253,015

2,205,881,944 38,565,134,959

2,221,530,236 40,786,665,195

239

2,369,973,091 43,156,638,286

2,391,407,412 45,548,045,699

2,545,708,042 48,093,753,741

2,573,072,480 50,666,826,220

2,602,157,554 53,268,983,774

2,632,974,189 55,901,957,963

Penndesign 2012 studio report

B-10 Moderate Case Financing Model MODERATE CASE MODEL Year HSR Ridership HSR Ridership Revenue HSR Food/Beverage Revenue HSR Advertising Revenue HSR Passenger Facility Charge Utility Easements Rolling Stock Leaseback Station Retail TOTAL REVENUE O&M Growth Rate (In line with ridership growth) O&M Labor/Non-Labor Cost HSR O&M Labor/Non-Labor Non-HSR NEC Cost Construction Cost Environmental Mitigation (% of ConstructionCost) Existing Corridor Upgrades Overhead Cost Allocation (% of Construction Cost) Rolling Stock TOTAL COSTS

2012

$ $

2013

2014

2015

10% 5.00 7.50

10%

(34,071,037,236)

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II Infrastructure Bank Proceeds III Infrastructure Bank Proceeds IV TIFIA Proceeds I Sales Tax Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant

35,308,978,854 26,603,992,188 3,431,669,401 3,213,082,384

Net Cash Flow Reserve

0 0 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

240

20,935,581,880

21,834,005

(272,940)

21,425,495

21,834,005

2018 $

21,425,495

18%

(272,940)

131,757,722,827

2017 $

Unlevered Cash Flow Sales Tax Bond Debt Service Gas Tax Bond Debt Service TIF Bond Debt Service CIL Bond Debt Service TIFIA Debt Service Infrastructure Bank Debt Service I Infrastructure Bank Debt Service II Infrastructure Bank Debt Service III RRIF Debt Service I RRIF Debt Service II

NPV

2016

(251,000,000) (2,000,000,000)

(360,000,000) (2,611,000,000)

(2,589,574,505) -

(2,589,165,995) -

(272,940) -

0 0

(251,000,000) (2,000,000,000)

0 0

272,940.0 (0) (0)

35,308,978,853.8 26,603,992,187.9 59,323,396,537 59,323,396,536

(2,589,165,995) 56,734,230,541

Penndesign 2012 studio report

2015

2016

2017 $

2019 $

2020 $

2021 $

2022 $

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

(272,940)

21,425,495

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

$ $

2023 $

21,425,495

2018 $

(272,940)

2024 $

27,110,860 37,839,057 64,949,918

27,633,078 76,434,896 104,067,973

(296,781,817) $ (302,838,588) $ (309,018,968) $ (315,325,477) $ (321,631,987) (3,315,000,000) (3,381,000,000) (3,449,000,000) (3,771,000,000) (3,847,000,000)

2025 392,027 76,445,200 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

2026 823,269 160,537,489 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

2027 1,295,653 252,652,340 129,565 6,478,265 9,717,398 32,627,906 169,377,442 103,047,500 574,030,416

2 1 7

4.9% (1,212,000,000)

(1,271,509,200)

(1,333,940,302)

(1,3

(414,577,617) (5,980,000,000)

(470,194,272) (6,100,000,000)

(522,990,258) (6,222,000,000)

(5 (4,7

0 0

(251,000,000) (2,000,000,000)

(251,000,000) $ (1,000,000,000) $

(360,000,000) (2,611,000,000)

(956,700,000) (6,819,481,817)

(788,580,000) (5,723,418,588)

(620,820,000) (4,378,838,968)

(678,780,000) (4,765,105,477)

(692,460,000) (4,861,091,987)

(1,076,400,000) (315,325,477) (8,998,303,094)

(1,098,000,000) (321,631,987) (9,261,335,459)

(1,119,960,000) (253,078,426) (9,451,968,986)

(8 (2 (7,8

(2,589,574,505) -

(2,589,165,995) -

(2,588,749,315) -

(6,796,806,118) -

(5,697,321,645) -

(4,352,240,085) -

(4,700,155,560) -

(4,757,024,014) -

(8,693,735,812) -

(8,825,005,921) -

(8,877,938,570)

(7,1

(272,940) -

$ $

0 0

35,308,978,853.8 26,603,992,187.9 -

272,940.0 (0) (0)

59,323,396,537 59,323,396,536

241

(2,589,165,995) 56,734,230,541

(2,588,749,315) 54,145,481,226

(6,796,806,118) 47,348,675,108

(5,697,321,645) 41,651,353,463

(4,352,240,085) 37,299,113,378

(4,700,155,560) 32,598,957,819

3,431,669,401.0 3,213,082,384.5 1,887,727,772 34,486,685,591

(8,693,735,812) 25,792,949,779

(8,825,005,921) 16,967,943,858

(8,877,938,570) 8,090,005,288

(7,1 9

Penndesign 2012 studio report

B-10 Moderate Case Financing Model 2020 -

22,675,699 22,675,699

MODERATE CASE MODEL 2021 Year 2022 2023 HSR Ridership - HSR $ Ridership Revenue $ Revenue - HSR Food/Beverage - HSR Advertising- Revenue HSR Passenger Facility Charge 26,096,944 Utility Easements 26,598,883 27,110,860 Rolling Stock Leaseback 37,839,057 - Station Retail REVENUE 26,096,944 TOTAL 26,598,883 64,949,918

O&M Growth Rate (In line with ridership growth) - $ - O&M $ Labor/Non-Labor - $ Cost HSR O&M Labor/Non-Labor Non-HSR NEC 296,781,817) $ (302,838,588)Cost $ (309,018,968) $ (315,325,477) Cost 315,000,000) (3,381,000,000)Construction (3,449,000,000) (3,771,000,000) Environmental Mitigation (% of 251,000,000) (251,000,000)ConstructionCost) $ - $ Corridor Upgrades 000,000,000) (1,000,000,000)Existing $ - $ Overhead Cost Allocation (% of Cost) 956,700,000) (788,580,000)Construction (620,820,000) (678,780,000) Rolling Stock COSTS 819,481,817) (5,723,418,588)TOTAL (4,378,838,968) (4,765,105,477)

796,806,118) -

796,806,118) 348,675,108

Cash Flow (4,700,155,560) (5,697,321,645)Unlevered (4,352,240,085) Service - Sales Tax Bond Debt - Gas Tax Bond Debt - Service - TIF Bond Debt Service - CIL Bond Debt Service - TIFIA Debt Service Infrastructure Bank Debt Service I Infrastructure Bank Debt Service II Infrastructure Bank Debt Service III - RRIF Debt Service - I RRIF Debt Service II - RRIF Proceeds I RRIF Proceeds II - Infrastructure Bank - Proceeds I Infrastructure Bank Proceeds II Infrastructure Bank Proceeds III Infrastructure Bank Proceeds IV - TIFIA Proceeds I - Sales Tax Proceeds - Gas Tax Proceeds - TIF Proceeds - CIL Proceeds - Federal Grant Cash Flow (5,697,321,645)Net (4,352,240,085) 41,651,353,463 Reserve 37,299,113,378

$ $

$ -10% 5.00 7.50 27,633,078 76,434,896 -10% 104,067,973

(321,631,987) (34,071,037,236) (3,847,000,000)

$ $

3% -

2026 2012 823,269 160,537,489 $ 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

2027 2013 1,295,653 252,652,340 $ 129,565 6,478,265 9,717,398 32,627,906 169,377,442 103,047,500 574,030,416

2028 2014 1,811,198 353,183,660 $ 181,120 9,055,991 13,583,987 33,260,464 201,605,704 110,465,000 721,335,926

2029 2015 2030 2016 2031 2017 2,372,024 4,009,803 5,834,724 462,544,698 $ 924,560,673 $$ 1,345,341,935 237,202 400,980 583,472 11,860,120 20,049,015 29,173,619 17,790,181 30,073,523 43,760,429 33,905,673 34,563,787 (272,940) 35,235,063 21,425,495 234,478,531 259,315,778 284,649,771 117,882,500 125,300,000 140,135,000 878,698,906 1,394,263,756 (272,940) 1,878,879,288 21,425,495

2018 $

21,834,005

(1,271,509,200)

(1,333,940,302)

(1,399,436,771)

(1,468,149,116)

9.8236% $ (1,612,374,213)-

$ (1,770,767,406)-

(414,577,617) (5,980,000,000)

(470,194,272) (6,100,000,000)

(522,990,258) (6,222,000,000)

(572,824,132) (4,769,000,000)

(619,547,451) (4,864,000,000)

(518,423,474) $ (3,453,000,000)-

(584,298,397) $ (3,522,000,000)-

21,834,005

4.9% (1,212,000,000)

-0 -0

(251,000,000) (2,000,000,000) -

(251,000,000) (2,000,000,000)

(1,076,400,000) (315,325,477) (8,998,303,094)

(1,098,000,000) (321,631,987) (9,261,335,459)0

(1,119,960,000) (253,078,426) (9,451,968,986)0

(858,420,000) (258,139,995) (7,857,820,897)0

(875,520,000) (263,302,795) (8,090,519,361)0

(621,540,000)0 (268,568,851) (6,473,906,538)0

(633,960,000) (360,000,000) (273,940,228) (6,784,966,030) (2,611,000,000)

(360,000,000) (2,611,000,000)

(4,757,024,014) -

(8,693,735,812) -

(8,825,005,921) -------

(8,877,938,570) ------

(7,136,484,971) ------

(7,211,820,456) ------

(5,079,642,782) (272,940) -----

(4,906,086,742) (2,589,574,505) ------

(2,589,165,995) -

20,000,000,000.0-

(692,460,000) 18% (4,861,091,987)

131,757,722,827 3,431,669,401.0 3,213,082,384.5 1,887,727,772 34,486,685,591 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

242

2025 392,027 76,445,200 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

(4,700,155,560) 32,598,957,819

NPV

2024 $

35,308,978,854 26,603,992,188 3,431,669,401 3,213,082,384 (8,693,735,812) 25,792,949,779 20,935,581,880

------(8,825,005,921)0 16,967,943,8580

------(8,877,938,570)0 8,090,005,2880

------(7,136,484,971)0 953,520,3160

------12,788,179,5440 13,741,699,8610

(1,071,546,447.4) - (1,071,546,447.4) -

--35,308,978,853.8 26,603,992,187.9 ----272,940.0 -(6,151,189,229) (0) (5,977,633,189) 59,323,396,537 7,590,510,632(0) 59,323,396,536 1,612,877,442

(2,589,165,995) 56,734,230,541

Penndesign 2012 studio report

2029 2030 2031 372,024 4,009,803 5,834,724 544,698 $ 924,560,673 $ 1,345,341,935 237,202 400,980 583,472 10% 860,120 $ 20,049,015 29,173,619 5.00 790,181 $ 30,073,523 43,760,429 7.50 905,673 34,563,787 35,235,063 478,531 259,315,778 284,649,771 882,500 125,300,000 140,135,000 10% 698,906 1,394,263,756 1,878,879,288

idership

149,116) R R NEC 547,451) 000,000) -

2032 7,870,400 $ 1,814,718,100 787,040 39,351,999 59,027,999 35,919,764 310,490,443 154,970,000 2,415,265,344

2039 30,056,972 $ 6,529,377,554 3,005,697 150,284,861 225,427,291 41,111,832 506,439,459 258,815,000 7,714,461,695

2040 30,889,040 $ 6,710,130,456 3,088,904 154,445,200 231,667,800 41,914,069 521,577,692 273,650,000 7,936,474,121

2041 31,743,723 $ 6,895,796,207 3,174,372 158,718,617 238,077,925 42,732,350 537,018,690 287,700,000 8,163,218,161

$ 7,

(2,575,990,293)

(2,829,045,276)

(3,106,959,367)

(3,412,174,628)

(3,747,373,015)

2.5232% (3,841,927,855)

(3,938,868,531)

(4,

(518,423,474) (3,453,000,000) (34,071,037,236)

(584,298,397) (3,522,000,000)

(634,696,196) (3,592,000,000)

(668,089,985) (3,664,000,000)

(682,802,750) (3,737,000,000)

(676,992,604) (3,812,000,000)

(648,636,584) (3,888,000,000)

(595,512,862) (3,966,000,000)

(515,181,208) (4,045,000,000)

(404,961,528) (4,126,000,000)

(409,330,456) -

(495,298,780) -

(

3% -

(5,079,642,782)

(4,906,086,742) -

(4,609,688,426) -

(1,071,546,447.4) (1,071,546,447.4)

179,544 699,861

2038 25,820,515 $ 5,609,077,743 2,582,052 129,102,577 193,653,865 40,325,326 476,756,650 243,980,000 6,695,478,213

(2,345,570,800)

820,456)

2037 21,996,326 $ 4,778,336,085 2,199,633 109,981,628 164,972,442 39,554,241 447,655,856 229,145,000 5,771,844,885

(2,135,762,077)

(646,560,000) (206,977,061) (7,024,953,770)

2036 18,546,809 $ 4,028,985,886 1,854,681 92,734,044 139,101,066 39,319,409 419,125,666 214,310,000 4,935,430,751

(1,944,720,513)

(633,960,000) (273,940,228) (6,784,966,030)

00,000.0

2035 15,437,749 $ 3,353,594,307 1,543,775 77,188,744 115,783,116 38,057,133 391,154,891 199,475,000 4,176,796,967

(1,770,767,406)

(621,540,000) 18% (268,568,851) (6,473,906,538)

eI e II e III

2034 12,661,720 $ 2,919,477,166 1,266,172 63,308,600 94,962,900 37,330,522 363,732,563 184,640,000 3,664,717,924

9.8236% (1,612,374,213)

520,000) 302,795) 519,361)

2033 10,138,227 $ 2,337,622,635 1,013,823 50,691,137 76,036,705 36,618,159 336,847,928 169,805,000 3,008,635,388

131,757,722,827 (6,151,189,229) 7,590,510,632

20,935,581,880

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

243

(659,520,000) (211,116,602) (7,338,488,664)

(672,660,000) (215,338,934) (7,653,372,485)

(686,160,000) (219,645,713) (7,970,788,610)

(699,840,000) (224,038,627) (8,289,560,487)

(713,880,000) (228,519,400) (8,610,871,629)

(728,100,000) (233,089,788) (8,933,545,623)

(742,680,000) (237,751,583) (9,258,766,126)

(242,506,615) (4,493,764,925)

(247,356,747) (4,681,524,058)

( (4,

(4,329,853,276) (3,988,654,560) (3,793,991,643) (3,354,129,736) (2,839,026,744) (2,238,067,410) (1,544,304,431) 3,442,709,196 3,481,694,103 3, (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (3 (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,04 (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (69

(1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,07 18,000,000,000.0 -

35,308,978,854 26,603,992,188 3,431,669,401 3,213,082,384 (5,977,633,189) 1,612,877,442

12,318,765,127 13,931,642,569

(6,442,341,508) 7,489,301,061

(6,101,142,792) 1,388,158,269

750,000,000.0 4,250,000,000.0 (906,479,875) 481,678,394

5,200,000,000.0 (302,445,757) 179,232,636

12,000,000,000.0

7,012,657,234 7,191,889,870

(5,080,344,622) 2,111,545,248

3,000,000,000.0 (1,386,581,643) 724,963,606

600,431,984 1,325,395,590

639,416,892 1,964,812,482

Penndesign 2012 studio report

B-10 Moderate Case Financing Model

2034 12,661,720 19,477,166 1,266,172 63,308,600 94,962,900 37,330,522 63,732,563 84,640,000 64,717,924

2035 15,437,749 $ 3,353,594,307 1,543,775 77,188,744 115,783,116 38,057,133 391,154,891 199,475,000 4,176,796,967

45,570,800)

(2,575,990,293)

82,802,750) 37,000,000)

(676,992,604) (3,812,000,000)

72,660,000) 15,338,934) 53,372,485)

(686,160,000) (219,645,713) (7,970,788,610)

MODERATE CASE MODEL Year 2036 2037 HSR Ridership 18,546,809 21,996,326 HSR Ridership Revenue $ 4,028,985,886 $ 4,778,336,085 HSR Food/Beverage 1,854,681 Revenue 2,199,633 HSR Advertising 92,734,044Revenue109,981,628 HSR Passenger Facility Charge 139,101,066 164,972,442 Utility Easements 39,319,409 39,554,241 Rolling Stock Leaseback 447,655,856 419,125,666 Station Retail 214,310,000 229,145,000 TOTAL REVENUE 4,935,430,751 5,771,844,885 O&M Growth Rate (In line with ridership growth) O&M Labor/Non-Labor (3,106,959,367) Cost HSR (2,829,045,276) O&M Labor/Non-Labor Non-HSR NEC Cost (648,636,584) (595,512,862) Construction Cost (3,888,000,000) (3,966,000,000) Environmental Mitigation (% of ConstructionCost)Existing Corridor Upgrades Overhead Cost Allocation (% of Construction Cost) (699,840,000) (713,880,000) Rolling Stock (224,038,627) (228,519,400) TOTAL COSTS (8,289,560,487) (8,610,871,629)

2038 2039 25,820,515 30,056,972 $ 5,609,077,743 $ 6,529,377,554 2,582,052 3,005,697 10% 150,284,861 $ 129,102,577 5.00 225,427,291 $ 193,653,865 7.50 40,325,326 41,111,832 476,756,650 506,439,459 243,980,000 258,815,000 10% 6,695,478,213 7,714,461,695

2040 2041 2042 2043 2044 2045 2046 2012 2013 2014 2015 2016 2017 2018 30,889,040 31,743,723 32,621,629 33,523,378 34,449,610 35,459,625 36,498,468 - $ $7,928,685,539 - $ $8 $ 6,710,130,456 $ 6,895,796,207 $ 7,086,506,514 $ 7,282,396,577 $ 7,483,605,184 $ $7,703,014,054 3,088,904 3,174,372 3,262,163 3,352,338 3,444,961 3,545,962 3,649,847 154,445,200 158,718,617 163,108,143 167,616,890 172,248,052 177,298,125 182,492,342 231,667,800 238,077,925 244,662,214 251,425,334 258,372,078 265,947,187 273,738,513 41,914,069 42,732,350 43,566,997 44,418,337 45,286,704 46,172,438 47,075,887 (272,940) 21,425,495 21,834,005 521,577,692 537,018,690 552,768,507 568,833,321 585,219,432 605,276,030 625,733,761 273,650,000 287,700,000 301,750,000 315,800,000 329,850,000 343,900,000 359,950,000 7,936,474,121 (272,940) 9,145,153,797 21,425,495 21,834,005 8,163,218,161 8,395,624,538 8,633,842,798 8,878,026,411 9,421,325,889 9

(3,747,373,015)

2.5232% (3,841,927,855)

(3,938,868,531)

(4,038,255,243)

(4,140,149,711)

$(4,244,615,211) -

2.62% $(4,355,875,065) -

$(4,470,051,262) -

$(4

(515,181,208) (404,961,528) (4,045,000,000) (34,071,037,236) (4,126,000,000)

(409,330,456) -

(495,298,780) -

(578,871,528) -

(659,987,991) -

(738,585,922) $ -

(838,299,435) $ -

(932,500,450) $ -

(1 $

(3,412,174,628)

-3% -

(728,100,000) (742,680,000) 18% (233,089,788) (237,751,583) (8,933,545,623) (9,258,766,126)

(242,506,615) (4,493,764,925)0

(247,356,747) (4,681,524,058)0

(126,151,941) (4,743,278,713)0

(128,674,980) (4,928,812,683)0

-0 -0 -0 (131,248,480) (5,114,449,613)0

(251,000,000) (2,000,000,000)

(360,000,000) (360,000,000) (133,873,449) (136,550,918) (5,328,047,949) (2,611,000,000) (5,539,102,630) (2,611,000,000) (5

Cash Flow (2,839,026,744) 3,442,709,1963,481,694,1033,652,345,8253,705,030,1153,763,576,798 (272,940) 3,817,105,848 (2,589,574,505) 3,882,223,260 (2,589,165,995) 3 88,654,560) (3,793,991,643) Unlevered (3,354,129,736) (2,238,067,410) (1,544,304,431) - Sales Tax Bond -Debt Service - - - - - - - Gas Tax Bond Debt Service - - - - - - - - TIF Bond Debt Service - - - - - - - - CIL Bond Debt Service - - - - - Debt Service - TIFIA (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1)(35,827,790.1)(35,827,790.1)(35,827,790.1)(35,827,790.1)(35,827,790.1)(35,827,790.1)Bank Debt Service I 0,941,784.4) (1,040,941,784.4) Infrastructure (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4)- (1,040,941,784.4)- (1,040,941,784.4)- (1,040,941,784.4)- (1,040,941,784.4)- (1,040,941,784.4)- (1,040,941,784.4)- (1,0 - Infrastructure Bank - Debt Service II (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (6 Infrastructure Bank Debt Service III Debt Service I (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4)- (1,071,546,447.4)- (1,071,546,447.4)- (1,071,546,447.4)- (1,071,546,447.4)- (1,071,546,447.4)- (1,071,546,447.4)- (1,0 1,546,447.4) (1,071,546,447.4) RRIF (1,071,546,447.4) RRIF Debt Service II -

01,142,792) 88,158,269

750,000,000.0 4,250,000,000.0 (906,479,875) 481,678,394

RRIF Proceeds IRRIF Proceeds II Infrastructure Bank - Proceeds I Infrastructure Bank Proceeds II 12,000,000,000.0 Infrastructure Bank Proceeds III Infrastructure Bank Proceeds IV TIFIA Proceeds -I Sales Tax Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant 5,200,000,000.0 Net Cash Flow (302,445,757) 7,012,657,234 Reserve 179,232,636 7,191,889,870 NPV

- -

35,308,978,854 131,757,722,827 26,603,992,188 3,431,669,401 3,213,082,384 3,000,000,000.0 (5,080,344,622) (1,386,581,643) 2,111,545,248 724,963,606 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

244

- - -

20,935,581,880

- - - - - - 600,431,984 0 1,325,395,590 0

- - - - - - 639,416,892 0 1,964,812,482 0

- - - - - - 810,068,614 0 2,774,881,095 0

- - - - - - 862,752,904 0 3,637,633,999 0

- - 35,308,978,853.8 26,603,992,187.9 - - - - - 272,940.0 921,299,587(0) 974,828,636 59,323,396,537 4,558,933,586(0) 5,533,762,222 59,323,396,536

- - - - - - 1,039,946,048 (2,589,165,995) 6,573,708,270 56,734,230,541

1 7

Penndesign 2012 studio report

2043 3,523,378 2,396,577 3,352,338 7,616,890 1,425,334 4,418,337 8,833,321 5,800,000 3,842,798

2044 34,449,610 $ 7,483,605,184 3,444,961 172,248,052 258,372,078 45,286,704 585,219,432 329,850,000 8,878,026,411

2045 2046 35,459,625 36,498,468 $ 7,703,014,054 $ 7,928,685,539 3,545,962 3,649,847 177,298,125 182,492,342 265,947,187 273,738,513 46,172,438 47,075,887 605,276,030 625,733,761 343,900,000 359,950,000 9,145,153,797 9,421,325,889

0,149,711)

(4,244,615,211)

2.62% (4,355,875,065)

9,987,991) -

(738,585,922) -

(838,299,435) -

8,674,980) 8,812,683)

(131,248,480) (5,114,449,613)

(4,470,051,262) (932,500,450) -

(133,873,449) (5,328,047,949)

(136,550,918) (5,539,102,630)

MODERATE CASE MODEL 2047 Year 2048 2049 37,566,948 HSR Ridership 38,665,895 39,796,160 Ridership Revenue $ 8,160,795,046 HSR $ 8,399,522,830 $ 8,645,054,120 3,756,695 HSR Food/Beverage 3,866,589 Revenue3,979,616 Revenue 198,980,798 187,834,742 HSR Advertising 193,329,473 Facility Charge 281,752,113 HSR Passenger 289,994,209 298,471,197 47,997,404 Utility Easements 48,937,353 49,896,100 Stock Leaseback 689,594,777 646,600,647 Rolling 667,884,870 Retail 376,000,000 Station 392,050,000 408,100,000 REVENUE 9,704,736,647 TOTAL 9,995,585,324 10,294,076,608 O&M Growth Rate (In line with ridership growth) Labor/Non-Labor Cost HSR (4,587,220,245)O&M(4,707,460,463) (4,830,852,416) O&M Labor/Non-Labor Non-HSR NEC (1,023,775,533)Cost(1,112,047,575) (1,197,237,437) - Construction Cost Environmental Mitigation (% of ConstructionCost) - Existing Corridor Upgrades Overhead Cost Allocation (% of - Construction Cost) Stock (167,138,324)Rolling(170,481,090) (173,890,712) COSTS (5,778,134,102)TOTAL (5,989,989,128) (6,201,980,566)

2050 2051 40,363,339 40,937,609 $ 8,768,264,431 $ 8,893,014,944 10% 4,036,334 4,093,761 $ 5.00 201,816,695 204,688,043 $ 7.50 302,725,043 307,032,065 50,874,022 51,871,502 700,666,830 711,960,324 10% 424,150,000 434,850,000 10,452,533,355 10,607,510,639

2,752,904 7,633,999

921,299,587 4,558,933,586

974,828,636 5,533,762,222

1,039,946,048 6,573,708,270

- RRIF Proceeds I RRIF Proceeds II - Infrastructure Bank - Proceeds I Infrastructure Bank Proceeds II Infrastructure Bank Proceeds III Infrastructure Bank Proceeds IV - TIFIA Proceeds I - Sales Tax Proceeds - Gas Tax Proceeds- TIF Proceeds - CIL Proceeds - Federal Grant

Flow 1,084,325,334 Net Cash 1,163,318,984 7,658,033,604 Reserve 8,821,352,588

245

2054 42,703,575 $ 9,276,641,710 4,270,357 213,517,873 320,276,810 54,985,245 747,214,185 466,950,000 11,083,856,181

2055 43,306,820 $ 9,407,686,703 4,330,682 216,534,099 324,801,149 56,064,950 759,438,626 477,650,000 11,246,506,209

$ 9,5

2 3

7 4 11,4

(5,001,156,102)

(5,088,546,304)

(5,177,463,562)

(5,267,934,560)

(5,359,986,449)

(5,4

(1,229,208,778) (34,071,037,236) -

(1,276,823,504) -

(1,322,974,305) -

(1,938,804,152) -

(1,993,373,569) -

(1,910,802,606) -

(1,9

3% 18% (177,368,526) (6,321,844,036)

(180,915,897) (6,458,895,503)

(92,267,107) (6,503,787,717)

(94,112,450) (7,210,380,163)

(95,994,699) (7,357,302,828)

(669,083,049) (7,939,872,104)

131,757,722,827 1,288,412,108 11,359,583,527 3%

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

35,308,978,854 26,603,992,188 3,431,669,401 3,213,082,384 -

1,306,337,925 12,665,921,452

20,935,581,880

(6 (8,0

4,260,589,776 3,712,772,814 3,726,553,353 3,306,634,106 3,3 (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (3 (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,04 (693,961,189.6) (693,961,189.6) (69 (693,961,189.6) (693,961,189.6) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,07 -

1,249,818,831 10,071,171,419

NPV

2053 42,107,665 $ 9,147,190,248 4,210,767 210,538,325 315,807,488 53,926,711 735,229,439 456,250,000 10,923,152,977

1.75% (4,915,266,731)

Cash Flow 5,030,115 3,763,576,798 3,817,105,848 3,882,223,260 3,926,602,545 Unlevered 4,005,596,195 4,092,096,043 4,130,689,319 4,148,615,137 Service - Sales Tax Bond Debt Gas Tax Bond Debt Service - TIF Bond Debt Service - CIL Bond Debt Service Debt Service 827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1)TIFIA (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) Infrastructure Bank Debt Service I 941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) Bank Debt(693,961,189.6) Service II 961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6)Infrastructure (693,961,189.6) (693,961,189.6) (693,961,189.6) - Infrastructure Bank - Debt Service III Debt Service I (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) 546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4)RRIF (1,071,546,447.4) RRIF Debt Service II -

2052 41,519,030 $ 9,019,319,093 4,151,903 207,595,150 311,392,726 52,888,932 723,479,688 445,550,000 10,764,377,492

1,418,312,564 14,084,234,017

870,495,602 14,954,729,619

884,276,142 15,839,005,761

464,356,894 16,303,362,655

4 16,7

RATE CASE MODEL

dership dership Revenue od/Beverage Revenue dvertising Revenue assenger Facility Charge asements Stock Leaseback Retail REVENUE

Penndesign 2012 studio report

B-10 Moderate Case Financing Model MODERATE CASE MODEL Year HSR Ridership HSR Ridership Revenue HSR Food/Beverage 10% Revenue HSR Revenue $ Advertising 5.00 HSR Facility Charge $ Passenger 7.50 Utility Easements Rolling Stock Leaseback Station Retail 10% TOTAL REVENUE

rowth Rate (In line with ridership O&M Growth Rate (In line with ridership growth) abor/Non-Labor Cost HSR O&M Labor/Non-Labor Cost HSR abor/Non-Labor Non-HSR NEC O&M Labor/Non-Labor Non-HSR NEC Cost ction Cost Construction Cost (34,071,037,236) mental Mitigation (% of Environmental Mitigation (% of ctionCost) ConstructionCost) 3% Corridor Upgrades Existing Corridor Upgrades ad Cost Allocation (% of Overhead Cost Allocation (% of ction Cost) Construction Cost) 18% Stock Rolling Stock COSTS TOTAL COSTS

ed Cash Flow ax Bond Debt Service x Bond Debt Service d Debt Service nd Debt Service ebt Service ucture Bank Debt Service I ucture Bank Debt Service II ucture Bank Debt Service III ebt Service I ebt Service II

roceeds I roceeds II ucture Bank Proceeds I ucture Bank Proceeds II ucture Bank Proceeds III ucture Bank Proceeds IV roceeds I ax Proceeds x Proceeds ceeds ceeds Grant

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II Infrastructure Bank Proceeds III Infrastructure Bank Proceeds IV TIFIA Proceeds I 35,308,978,854 Sales Tax Proceeds 131,757,722,827 26,603,992,188 Gas Tax Proceeds 3,431,669,401 TIF Proceeds 3,213,082,384 CIL Proceeds Federal Grant

sh Flow e

Net Cash Flow Reserve NPV

20,935,581,880

2052 2053 41,519,030 42,107,665 $ 9,019,319,093 $ 9,147,190,248 4,151,903 4,210,767 10% 210,538,325 $ 207,595,150 5.00 315,807,488 $ 311,392,726 7.50 52,888,932 53,926,711 723,479,688 735,229,439 445,550,000 456,250,000 10% 10,764,377,492 10,923,152,977

(5,088,546,304)

(5,177,463,562)

(5,267,934,560)

(5,359,986,449)

(5,453,646,852)

(5,548,943,877)

$(5,645,906,122)-

$(5,744,562,686)-

$(5,844,943,174)-

(1,322,974,305) (34,071,037,236)

(1,938,804,152) -

(1,993,373,569) -

(1,910,802,606) -

(1,960,006,695) -

(2,007,798,277) -

(2,054,153,235) - $

(2,099,047,045) - $

(2,011,236,158) - $

( $

3% 18% (92,267,107) (6,503,787,717)

(94,112,450) (7,210,380,163)

(95,994,699) (7,357,302,828)0

(669,083,049) (7,939,872,104)0

(682,464,710) (8,096,118,257)0

(560,286,881) (8,117,029,035)0

-0 -0

(251,000,000) (2,000,000,000)

-0 (571,492,619) (8,271,551,977)0

(360,000,000) (582,922,471) (8,426,532,202) (2,611,000,000)

(360,000,000) (594,580,921) (8,450,760,253) (2,611,000,000)

(

4,260,589,776 3,712,772,814 3,726,553,3533,306,634,1063,315,778,3013,460,694,1813,474,776,461 3,490,424,753 3,638,867,608 (272,940) (2,589,574,505) (2,589,165,995) --------------------------(35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) - (1, (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) ( (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) - (1,071,546,447.4) - (1,071,546,447.4) - (1,071,546,447.4) - (1,071,546,447.4) - (1,071,546,447.4) - (1,071,546,447.4) - (1, -

131,757,722,827 1,418,312,564 14,084,234,017

ax Bond ounted 20 year amount saction fees oceeds Debt-Service to NE

Sales Tax Bond 35,308,978,854 Undiscounted 20 year amount 15,401,926,146 (+)Transaction fees 50,710,905,000 Total Proceeds 3,782,657,500 Annual Debt-Service to NE

35,308,978,854 15,401,926,146 50,710,905,000 3,782,657,500

x Bond ounted 20 year amount saction fees oceeds Debt-Service to NE

Gas Tax Bond 26,603,992,188 Undiscounted 20 year amount 11,719,252,812 (+)Transaction fees 38,323,245,000 Total Proceeds 2,858,627,600 Annual Debt-Service to NE

26,603,992,188 11,719,252,812 38,323,245,000 2,858,627,600

246

2054 2055 2056 2057 2058 2059 2060 2012 2013 2014 2015 2016 2017 2018 42,703,575 43,306,820 43,917,461 44,535,558 45,161,171 45,794,359 46,435,180 $ 9,276,641,710 $ 9,407,686,703 $ 9,540,338,365 $ 9,674,609,741 $ 9,810,513,772 $$ 9,948,063,288 $$10,087,270,997 $$1 4,270,357 4,330,682 4,391,746 4,453,556 4,516,117 4,579,436 4,643,518 213,517,873 216,534,099 219,587,306 222,677,792 225,805,857 228,971,796 232,175,901 320,276,810 324,801,149 329,380,958 334,016,688 338,708,786 343,457,694 348,263,852 54,985,245 56,064,950 57,940,626 58,289,574 59,435,365 60,604,073 61,796,154 (272,940) 21,425,495 21,834,005 747,214,185 759,438,626 771,907,556 784,625,865 797,598,539 810,830,667 824,327,438 466,950,000 477,650,000 488,350,000 499,050,000 509,750,000 520,450,000 531,150,000 11,083,856,181 11,246,506,209 11,411,896,558 11,577,723,216 11,746,328,437 (272,940) 11,916,956,954 21,425,495 12,089,627,860 21,834,005 1

35,308,978,854 26,603,992,188 3,431,669,401 3,213,082,384 870,495,602 14,954,729,619

20,935,581,880

------884,276,1420 15,839,005,7610

-----464,356,8940 16,303,362,6550

------473,501,0890 16,776,863,7440

------618,416,9700 17,395,280,7140

--35,308,978,853.8 26,603,992,187.9 ----272,940.0 -0 632,499,249(0) 648,147,541 59,323,396,537 18,027,779,963(0) 18,675,927,504 59,323,396,536

------796,590,396 (2,589,165,995) 19,472,517,900 56,734,230,541 2

Penndesign 2012 studio report

2057 4,535,558 4,609,741 4,453,556 2,677,792 4,016,688 8,289,574 4,625,865 9,050,000 7,723,216

2058 45,161,171 $ 9,810,513,772 4,516,117 225,805,857 338,708,786 59,435,365 797,598,539 509,750,000 11,746,328,437

2059 45,794,359 $ 9,948,063,288 4,579,436 228,971,796 343,457,694 60,604,073 810,830,667 520,450,000 11,916,956,954

2060 46,435,180 $ 10,087,270,997 4,643,518 232,175,901 348,263,852 61,796,154 824,327,438 531,150,000 12,089,627,860

2061 47,083,692 $ 10,228,149,477 4,708,369 235,418,462 353,127,693 63,012,077 838,094,144 541,850,000 12,264,360,222

2062 47,739,953 $ 10,370,711,165 4,773,995 238,699,765 358,049,647 64,252,319 852,136,184 552,550,000 12,441,173,074

2063 48,404,018 $ 10,514,968,345 4,840,402 242,020,092 363,030,138 65,517,365 866,459,066 563,250,000 12,620,085,407

2064 49,075,945 $ 10,660,933,142 4,907,594 245,379,723 368,069,584 66,807,712 881,068,404 573,950,000 12,801,116,160

2065 49,755,787 $ 10,808,617,506 4,975,579 248,778,933 373,168,399 68,123,867 895,969,930 584,650,000 12,984,284,212

8,943,877)

(5,645,906,122)

(5,744,562,686)

(5,844,943,174)

(5,947,077,711)

(6,050,996,947)

(6,156,732,068)

(6,264,314,804)

(6,373,777,441)

7,798,277) -

(2,054,153,235) -

(2,099,047,045) -

(2,011,236,158) -

(2,050,508,043) -

(2,088,190,182) -

(2,124,255,289) -

(2,158,675,611) -

(2,191,422,917) -

0,286,881) 7,029,035)

(571,492,619) (8,271,551,977)

(582,922,471) (8,426,532,202)

(594,580,921) (8,450,760,253)

(606,472,539) (8,604,058,293)

(487,383,386) (8,626,570,515)

(497,131,054) (8,778,118,411)

(507,073,675) (8,930,064,090)

(517,215,148) (9,082,415,506)

0,694,181 3,474,776,461 3,490,424,753 3,638,867,608 3,660,301,929 3,814,602,559 3,841,966,996 3,871,052,071 3,901,868,705 827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) (35,827,790.1) 941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (1,040,941,784.4) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) (693,961,189.6) 961,189.6) (693,961,189.6) (693,961,189.6) 546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) (1,071,546,447.4) -

8,416,970 5,280,714

632,499,249 18,027,779,963

0 648,147,541 18,675,927,504

247

796,590,396 19,472,517,900

818,024,718 20,290,542,618

972,325,347 21,262,867,966

2,040,631,569 23,303,499,535

2,069,716,644 25,373,216,179

2,100,533,278 27,473,749,457

Penndesign 2012 studio report

B-11 Conservative Case Financing Model CONSERVATIVE CASE MODEL Year HSR Ridership HSR Ridership Revenue HSR Food/Beverage Revenue HSR Advertising Revenue HSR Passenger Facility Charge Utility Easements Rolling Stock Leaseback Station Retail TOTAL REVENUE

2012

$ $

2016

154,010,657,823

16,489,116,252 8,867,997,396 3,431,669,401 2,471,601,834

Net Cash Flow Reserve

3% 9,239,955,874

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

2017

2018 $

(272,940)

21,425,495

21,834,005

(272,940)

21,425,495

21,834,005

0 0 0

(272,940) -

- $ (251,000,000) (3,000,000,000) (540,000,000) (3,791,000,000)

0 0

272,940.0 (0) (0)

(3,769,574,505) -

(251,000,000 (3,000,000,000 (540,000,000 (3,791,000,000

0 0

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

248

2015

10% 5.00 7.50

Unlevered Cash Flow Sales Tax Bond Debt Service Gas Tax Bond Debt Service TIF Bond Debt Service CIL Bond Debt Service TIFIA Debt Service I TIFIA Debt Service II Infrastructure Bank Debt Service I Infrastructure Bank Debt Service II RRIF Debt Service I RRIF Debt Service II

NPV

2014

O&M Growth Rate (In line with ridership growth) O&M Labor/Non-Labor Cost HSR O&M Labor/Non-Labor Non-HSR NEC Cost Construction Cost (35,251,037,236) Environmental Mitigation (% of Construct 3% Existing Corridor Upgrades Overhead Cost Allocation (% of Construc 18% Rolling Stock TOTAL COSTS

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds TIFIA Proceeds II Sales Tax Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant

2013

16,489,116,251.8 8,867,997,396.0 21,587,539,143 21,587,539,142

(3,769,165,995 -

(3,769,165,995 17,818,373,147

Penndesign 2012 studio report

2015

2016

2017 $

0 -

2018 $

2019 $

2020 $

2021 $

2022 $

(272,940)

21,425,495

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

(272,940)

21,425,495

21,834,005

22,250,685

22,675,699

26,096,944

26,598,883

0 0 0

(272,940) -

- $ (251,000,000) (3,000,000,000) (540,000,000) (3,791,000,000)

(251,000,000) (2,000,000,000) (360,000,000) (2,611,000,000)

(3,769,574,505) -

(3,769,165,995) -

(2,588,749,315) -

$ $

- $ (296,781,817) $ (3,315,000,000) (251,000,000) (1,000,000,000) (776,700,000) (5,639,481,817)

(302,838,588) (3,381,000,000) (251,000,000) (1,000,000,000) (788,580,000) (5,723,418,588)

(5,616,806,118) -

(5,697,321,645) -

$ $ $ $

(309,018,968) (3,449,000,000) (620,820,000) (4,378,838,968) (4,352,240,085) -

0 0

272,940.0

16,489,116,251.8 8,867,997,396.0 -

(0) (0)

21,587,539,143 21,587,539,142

249

(3,769,165,995) 17,818,373,147

(2,588,749,315) 15,229,623,832

(5,616,806,118) 9,612,817,714

2023 $

2024 $

27,110,860 37,839,057 64,949,918

$ $ $ $

(315,325,477) (3,771,000,000) (678,780,000) (4,765,105,477) (4,700,155,560)

27,633,078 76,434,896 104,067,973

$ $ $ $

(321,631,987) (3,847,000,000) (692,460,000) (4,861,091,987) (4,757,024,014) -

2025 392,027 76,445,200 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

(5,697,321,645) 3,915,496,069

500,000,000.0 (3,852,240,085) 63,255,984

20,000,000,000.0 15,299,844,440 15,363,100,425

(1,071,546,447.4)

3,431,669,401.0 2,471,601,834.2 74,700,774 15,437,801,199

2026 823,269 160,537,489 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

1,29 252,65 12 6,47 9,71 32,62 169,37 103,04 574,03

4.9% (1,212,000,000) (414,577,617) (5,980,000,000) (1,076,400,000) (315,325,477) (8,998,303,094)

(1,271,509,200) (470,194,272) (6,100,000,000) (1,098,000,000) (321,631,987) (9,261,335,459)

(1,333,94 (522,99 (6,222,00

(8,693,735,812) -

(8,825,005,921) -

(8,877,93

(1,071,546,447.4)

15,500,000,000.0 -

5,603,447,632 11,275,966,571

(9,765,282,259) 5,672,518,940

(1,119,96 (253,07 (9,451,96

(896,366

(1,071,546

(10,845,85 430,11

Penndesign 2012 studio report

B-11 Conservative Case Financing Model

2020 $

22,675,699

00)

- $ (296,781,817) $ (3,315,000,000) (251,000,000) (1,000,000,000) (776,700,000) (5,639,481,817)

15) -

(5,616,806,118) -

00) 00) 00)

$ $

15) 32

(5,616,806,118) 9,612,817,714

CONSERVATIVE CASE MODEL Year 2021 2022 HSR Ridership HSR Ridership $ Revenue $ HSR Food/Beverage RevenueHSR Advertising Revenue HSR Passenger Facility Charge Utility 26,096,944 Easements 26,598,883 Rolling Stock Leaseback Station Retail TOTAL 26,096,944 REVENUE 26,598,883

2023 -

2024 $ 10% 5.00 7.50

$ $ 27,110,860 37,839,057 5% 64,949,918

27,633,078 76,434,896 104,067,973

2012 2025 392,027 76,445,200 $ 39,203 1,960,133 2,940,200 28,165,739 106,804,307 88,212,500 304,567,282

2013 2026 823,269 160,537,489 $ 82,327 4,116,346 6,174,519 32,007,751 137,781,106 95,630,000 436,329,538

2014 2027 1,295,653 252,652,340 $ 129,565 6,478,265 9,717,398 32,627,906 169,377,442 103,047,500 574,030,416

2015 2028 1,811,198 353,183,660 $ 181,120 9,055,991 13,583,987 33,260,464 201,605,704 110,465,000 721,335,926

2016 2029 2,372,024 462,544,698 $$ 237,202 11,860,120 17,790,181 33,905,673 (272,940) 234,478,531 117,882,500 878,698,906 (272,940)

2017 2030 4,009,803 924,560,673 400,980 20,049,015 30,073,523 34,563,787 21,425,495 259,315,778 125,300,000 1,394,263,756 21,425,495

2018 $

21,834,005

O&M Growth Rate (In line with ridership growth) - $ - $ O&M Labor/Non-Labor Cost HSR- $ O&M Labor/Non-Labor Non-HSR NEC (302,838,588) $ (309,018,968) $ Cost (315,325,477) $ (321,631,987) Construction Cost(3,449,000,000) (35,251,037,236) (3,847,000,000) (3,381,000,000) (3,771,000,000) (251,000,000) Environmental$Mitigation (% of Construct - $ - 3% $ (1,000,000,000) Existing Corridor $ Upgrades - $ - $ (788,580,000) Overhead Cost Allocation (620,820,000) (% of Construc(678,780,000)18% (692,460,000) Rolling Stock TOTAL COSTS (4,378,838,968) (5,723,418,588) (4,765,105,477) (4,861,091,987)

4.9% (1,212,000,000) (414,577,617) (5,980,000,000) (1,076,400,000) (315,325,477) 0 (8,998,303,094)

(1,271,509,200) (470,194,272) (6,100,000,000) (1,098,000,000) (321,631,987) (9,261,335,459) 0

(1,333,940,302) (522,990,258) (6,222,000,000) (1,119,960,000) (253,078,426) (9,451,968,986) 0

9.8236% (1,399,436,771) $ (1,468,149,116)- $ (1,612,374,213)- $ (572,824,132) (619,547,451) (518,423,474) (4,769,000,000) $ (4,864,000,000)- $ (3,453,000,000)- $ -0 (251,000,000) -0 (3,000,000,000) (858,420,000) (875,520,000) 0 (621,540,000) (540,000,000) (258,139,995) (263,302,795) (268,568,851) (7,857,820,897) 0 (8,090,519,361) 0 (6,473,906,538) (3,791,000,000)

(251,000,000 (3,000,000,000 (540,000,000 (3,791,000,000

(5,697,321,645) (4,352,240,085) Unlevered Cash Flow Sales Tax-Bond Debt Service Gas Tax Bond Debt Service TIF Bond -Debt Service CIL Bond -Debt Service TIFIA Debt- Service I TIFIA Debt Service II Infrastructure Bank Debt Service I Infrastructure Bank Debt Service II RRIF Debt- Service I RRIF Debt Service II

(8,693,735,812) ------

(8,825,005,921) ------

(8,877,938,570) ------

(7,136,484,971) ------

(7,211,820,456) (272,940) ------

(5,079,642,782) (3,769,574,505) -----

(3,769,165,995 -

(896,366,536.6) -

(1,071,546,447.4) -

RRIF Proceeds I RRIF Proceeds II Infrastructure - Bank Proceeds I Infrastructure - Bank Proceeds IITIFIA Proceeds TIFIA Proceeds II Sales Tax-Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant 500,000,000.0 (5,697,321,645) Net Cash Flow 3,915,496,069 Reserve

(3,852,240,085) 63,255,984

NPV

(4,700,155,560)

(4,757,024,014) -

(1,071,546,447.4)

20,000,000,000.0 -

16,489,116,252 154,010,657,823 8,867,997,396 3,431,669,401.0 3,431,669,401 2,471,601,834.2 2,471,601,834 15,299,844,440 15,363,100,425

74,700,774 15,437,801,199 3% 9,239,955,874

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

250

(1,071,546,447.4)

---------(9,765,282,259) 0 5,672,518,9400

-(1,071,546,447.4) -

-15,500,000,000.0 -------5,603,447,6320 11,275,966,5710

---------(10,845,851,554) 0 430,115,0180

--------10,000,000,000.0 895,602,0450 1,325,717,0620

-----

------

-16,489,116,251.8 -8,867,997,396.0 ----10,000,000,000.0 272,940.0 10,000,000,000.0 (0) 21,587,539,143 820,266,560 2,952,444,234 2,145,983,623 (0) 21,587,539,142 5,098,427,857

(3,769,165,995 17,818,373,147

Penndesign 2012 studio report

L 2028 1,198 3,660 1,120 5,991 3,987 0,464 5,704 5,000 5,926

$ $

2029 2,372,024 462,544,698 $ 237,202 10% 11,860,120 5.00 17,790,181 7.50 33,905,673 234,478,531 117,882,500 5% 878,698,906

idership growth) 6,771) (1,468,149,116) R R4,132) NEC Cost (619,547,451) 0,000) (4,864,000,000) (35,251,037,236) Construct 3% 0,000) (875,520,000) Construc 18% 9,995) (263,302,795) 0,897) (8,090,519,361)

2030 4,009,803 924,560,673 $ 400,980 20,049,015 30,073,523 34,563,787 259,315,778 125,300,000 1,394,263,756

2031 5,834,724 1,345,341,935 583,472 29,173,619 43,760,429 35,235,063 284,649,771 140,135,000 1,878,879,288

2032 7,870,400 1,814,718,100 787,040 39,351,999 59,027,999 35,919,764 310,490,443 154,970,000 2,415,265,344

2033 10,138,227 2,337,622,635 1,013,823 50,691,137 76,036,705 36,618,159 336,847,928 169,805,000 3,008,635,388

2034 12,661,720 2,919,477,166 1,266,172 63,308,600 94,962,900 37,330,522 363,732,563 184,640,000 3,664,717,924

2035 15,437,749 3,353,594,307 1,543,775 77,188,744 115,783,116 38,057,133 391,154,891 199,475,000 4,176,796,967

2036 18,546,809 4,028,985,886 1,854,681 92,734,044 139,101,066 39,319,409 419,125,666 214,310,000 4,935,430,751

2038 25,820,515 5,609,077,743 2,582,052 129,102,577 193,653,865 40,325,326 476,756,650 243,980,000 6,695,478,213

2039 30,056,972 6,529,377,554 3,005,697 150,284,861 225,427,291 41,111,832 506,439,459 258,815,000 7,714,461,695

204 30,889,04 6,710,130,45 3,088,90 154,445,20 231,667,80 41,914,06 521,577,69 273,650,00 7,936,474,12

(2,135,762,077) (668,089,985) (3,664,000,000) (659,520,000) (211,116,602) (7,338,488,664)

(2,345,570,800) (682,802,750) (3,737,000,000) (672,660,000) (215,338,934) (7,653,372,485)

(2,575,990,293) (676,992,604) (3,812,000,000) (686,160,000) (219,645,713) (7,970,788,610)

(2,829,045,276) (648,636,584) (3,888,000,000) (699,840,000) (224,038,627) (8,289,560,487)

(3,106,959,367) (595,512,862) (3,966,000,000) (713,880,000) (228,519,400) (8,610,871,629)

(3,412,174,628) (515,181,208) (4,045,000,000) (728,100,000) (233,089,788) (8,933,545,623)

(3,747,373,015) (404,961,528) (4,126,000,000) (742,680,000) (237,751,583) (9,258,766,126)

(242,506,61 (4,493,764,92

(2,839,026,744) (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

(2,238,067,410) (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

(1,544,304,431) (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,442,709,19 (83,598,176. (896,366,536. (867,451,487. (1,071,546,447. (477,703,867.

(5,079,642,782) (4,906,086,742) -

(4,609,688,426) -

(4,329,853,276) -

(3,988,654,560) -

(3,793,991,643) -

(3,354,129,736) -

e536.6) I e II 447.4)

(896,366,536.6)

(896,366,536.6) (896,366,536.6)

(896,366,536.6)

(1,071,546,447.4)

(1,071,546,447.4) (1,071,546,447.4)

(1,071,546,447.4) (477,703,867.6)

(896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

154,010,657,823 10,000,000,000.0 820,266,560 2,145,983,623

(1,944,720,513) (634,696,196) (3,592,000,000) (646,560,000) (206,977,061) (7,024,953,770)

(7,211,820,456) -

000.0 2,045 7,062

2037 21,996,326 4,778,336,085 2,199,633 109,981,628 164,972,442 39,554,241 447,655,856 229,145,000 5,771,844,885

9.8236% (1,612,374,213) (1,770,767,406) (518,423,474) (584,298,397) (3,453,000,000) (3,522,000,000) (621,540,000) (633,960,000) (268,568,851) (273,940,228) (6,473,906,538) (6,784,966,030)

4,971) -

- 10,000,000,000.0 -

16,489,116,252 8,867,997,396 3,431,669,401 2,471,601,834 10,000,000,000.0 2,952,444,234 5,098,427,857

3% 9,239,955,874

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

251

3,126,000,274 8,224,428,131

(7,055,305,277) 1,169,122,854

15,000,000,000.0 8,224,529,872 9,393,652,726

(7,301,722,899) 2,091,929,827

10,000,000,000.0 2,892,940,018 4,984,869,845

1,750,000,000.0 (4,917,198,074) 67,671,771

10,000,000,000.0 3,764,306,740 3,831,978,512

10,000,000,000.0 4,365,266,074 8,197,244,586

(4,940,970,946) 3,256,273,639

2.5232 (3,841,927,85 (409,330,45 -

46,042,68 3,302,316,32

33 27 35 23 37 05 59 28 00 88

Penndesign 2012 studio report

B-11 Conservative Case Financing Model

2034 12,661,720 2,919,477,166 1,266,172 63,308,600 94,962,900 37,330,522 363,732,563 184,640,000 3,664,717,924

77) 85) 00) 00) 02) 64)

(2,345,570,800) (682,802,750) (3,737,000,000) (672,660,000) (215,338,934) (7,653,372,485)

76) -

(3,988,654,560) -

6.6)

(896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

7.4) 7.6)

0.0 -

72 26

(7,301,722,899) 2,091,929,827

CONSERVATIVE CASE MODEL Year 2035 2036 HSR Ridership 15,437,749 18,546,809 HSR Ridership$ Revenue 3,353,594,307 4,028,985,886 $ 1,543,775 1,854,681 HSR Food/Beverage Revenue 77,188,744 92,734,044 HSR Advertising Revenue 115,783,116 139,101,066 HSR Passenger Facility Charge 38,057,133 39,319,409 Utility Easements Rolling Stock Leaseback 391,154,891 419,125,666 Station Retail 199,475,000 214,310,000 4,176,796,967 TOTAL REVENUE4,935,430,751

2037 2038 21,996,326 25,820,515 4,778,336,085 $ 5,609,077,743 2,199,633 10% 2,582,052 109,981,628 129,102,577 $ 5.00 164,972,442 193,653,865 $ 7.50 39,554,241 40,325,326 447,655,856 476,756,650 229,145,000 5% 243,980,000 5,771,844,885 6,695,478,213

O&M Growth Rate (In line with ridership growth) (2,575,990,293) (2,829,045,276) (3,106,959,367) (3,412,174,628) O&M Labor/Non-Labor Cost HSR (676,992,604) (648,636,584) (595,512,862) (515,181,208) O&M Labor/Non-Labor Non-HSR NEC Cost (3,812,000,000) (3,966,000,000) Construction Cost(3,888,000,000) (35,251,037,236) (4,045,000,000) - Mitigation (% of Construct - 3% Environmental Existing Corridor Upgrades (686,160,000) (699,840,000) Overhead Cost Allocation (% of Construc(713,880,000) 18% (728,100,000) (219,645,713) (224,038,627) (228,519,400) (233,089,788) Rolling Stock (7,970,788,610) (8,610,871,629) (8,933,545,623) TOTAL COSTS (8,289,560,487) (3,793,991,643) (3,354,129,736) Unlevered Cash Flow Sales Tax-Bond Debt Service Gas Tax Bond Debt Service TIF Bond -Debt Service CIL Bond -Debt Service TIFIA Debt- Service I TIFIA Debt Service II (896,366,536.6) (896,366,536.6) Infrastructure Bank Debt Service I (867,451,487.0) (867,451,487.0) Infrastructure Bank Debt Service II (1,071,546,447.4) (1,071,546,447.4) RRIF Debt Service I (477,703,867.6) RRIF Debt Service(477,703,867.6) II RRIF Proceeds I RRIF Proceeds II - Bank Proceeds I Infrastructure - Bank Proceeds IIInfrastructure TIFIA Proceeds TIFIA Proceeds II1,750,000,000.0 Sales Tax-Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds 10,000,000,000.0 Federal Grant 2,892,940,018 Net Cash Flow (4,917,198,074) 4,984,869,845 67,671,771 Reserve

NPV

(2,839,026,744) (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

(2,238,067,410) (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

16,489,116,252 154,010,657,823 8,867,997,396 3,431,669,401 2,471,601,834 10,000,000,000.0 10,000,000,000.0 3,764,306,740 4,365,266,074 3,831,978,512 8,197,244,586

3% 9,239,955,874

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

252

2012 2039 30,056,972 6,529,377,554 $ 3,005,697 150,284,861 225,427,291 41,111,832 506,439,459 258,815,000 7,714,461,695

2013 2040 30,889,040 6,710,130,456 $ 3,088,904 154,445,200 231,667,800 41,914,069 521,577,692 273,650,000 7,936,474,121

2014 2041 31,743,723 6,895,796,207 $ 3,174,372 158,718,617 238,077,925 42,732,350 537,018,690 287,700,000 8,163,218,161

2015 2042 32,621,629 7,086,506,514 $ 3,262,163 163,108,143 244,662,214 43,566,997 552,768,507 301,750,000 8,395,624,538

(3,747,373,015) (404,961,528) (4,126,000,000) (742,680,000) (237,751,583) (9,258,766,126) 0

2.5232% (3,841,927,855) (409,330,456) (242,506,615) (4,493,764,925) 0

(3,938,868,531) (495,298,780) (247,356,747) (4,681,524,058) 0

(4,038,255,243) (578,871,528) (126,151,941) (4,743,278,713) 0

(1,544,304,431) -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,442,709,196 -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,481,694,103 -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,652,345,825 -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

---------(4,940,970,946) 0 3,256,273,6390

---------46,042,6800 3,302,316,3200

---------85,027,5880 3,387,343,9080

---------255,679,3100 3,643,023,2170

2016 2043 33,523,378 7,282,396,577 $$ 3,352,338 167,616,890 251,425,334 (272,940) 44,418,337 568,833,321 315,800,000 8,633,842,798 (272,940)

2017 2044 34,449,610 7,483,605,184 $$ 3,444,961 172,248,052 258,372,078 21,425,495 45,286,704 585,219,432 329,850,000 8,878,026,411 21,425,495

2018 2045 35,459,625 7,703,014,054 3,545,962 177,298,125 265,947,187 21,834,005 46,172,438 605,276,030 343,900,000 9,145,153,797 21,834,005

2.62% $ (4,140,149,711)- $ (4,244,615,211)- $ (4,355,875,065 (659,987,991) (738,585,922) (838,299,435 - - $ - - $ $ -0 (251,000,000) (251,000,000 -0 (3,000,000,000) (3,000,000,000 -0 (540,000,000) (540,000,000 (128,674,980) (131,248,480) (133,873,449 (4,928,812,683) (5,114,449,613) (5,328,047,949 0 (3,791,000,000) (3,791,000,000 3,705,030,115 (272,940) -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6) --------272,940.0 308,363,600 (0) 3,951,386,817 (0)

3,763,576,798 (3,769,574,505) ----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6) -----16,489,116,251.8 8,867,997,396.0 ---366,910,283 21,587,539,143 4,318,297,100 21,587,539,142

3,817,105,848 (3,769,165,995 -----(83,598,176.8 (896,366,536.6 (867,451,487.0 (1,071,546,447.4 (477,703,867.6 ------

-----420,439,332 (3,769,165,995 4,738,736,432 17,818,373,147

Penndesign 2012 studio report

2042 621,629 506,514 262,163 108,143 662,214 566,997 768,507 750,000 624,538

2043 33,523,378 7,282,396,577 3,352,338 167,616,890 251,425,334 44,418,337 568,833,321 315,800,000 8,633,842,798

2044 34,449,610 7,483,605,184 3,444,961 172,248,052 258,372,078 45,286,704 585,219,432 329,850,000 8,878,026,411

2045 35,459,625 7,703,014,054 3,545,962 177,298,125 265,947,187 46,172,438 605,276,030 343,900,000 9,145,153,797

255,243) 871,528) 151,941) 278,713)

(4,140,149,711) (659,987,991) (128,674,980) (4,928,812,683)

(4,244,615,211) (738,585,922) (131,248,480) (5,114,449,613)

2.62% (4,355,875,065) (838,299,435) (133,873,449) (5,328,047,949)

345,825 8,176.8) 6,536.6) 1,487.0) 6,447.4) 3,867.6)

3,705,030,115 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,763,576,798 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,817,105,848 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

679,310 023,217

308,363,600 3,951,386,817

366,910,283 4,318,297,100

420,439,332 4,738,736,432

CONSERVATIVE CASE MODEL Year 2046 2047 HSR Ridership 36,498,468 37,566,948 HSR Ridership Revenue 7,928,685,539 $ 8,160,795,046 HSR3,649,847 Food/Beverage Revenue 3,756,695 HSR Advertising Revenue 182,492,342 187,834,742 HSR Passenger Facility281,752,113 Charge 273,738,513 Utility Easements 47,075,887 47,997,404 Rolling Stock Leaseback 625,733,761 646,600,647 Station Retail 359,950,000 376,000,000 TOTAL REVENUE 9,704,736,647 9,421,325,889

2050 2048 2049 40,363,339 38,665,895 39,796,160 8,399,522,830 $ 8,645,054,120 $ 8,768,264,431 4,036,334 3,866,58910% 3,979,616 $ 193,329,473 5.00 201,816,695 198,980,798 $ 289,994,209 7.50 302,725,043 298,471,197 50,874,022 48,937,353 49,896,100 700,666,830 667,884,870 689,594,777 424,150,000 392,050,000 5% 408,100,000 10,452,533,355 9,995,585,324 10,294,076,608

O&M Growth Rate (In line with ridership growth) (4,470,051,262) (4,587,220,245) (4,707,460,463) O&M Labor/Non-Labor Cost HSR (932,500,450) (1,023,775,533) (1,112,047,575) O&M Labor/Non-Labor Non-HSR NEC Cost Construction Cost (35,251,037,236) - 3% Environmental- Mitigation (% of Construct - Upgrades Existing Corridor - Allocation (% of Construc Overhead Cost 18% (136,550,918) (167,138,324) (170,481,090) Rolling Stock (5,539,102,630) (5,778,134,102) (5,989,989,128) TOTAL COSTS 3,882,223,260 Unlevered Cash Flow3,926,602,545 Sales Tax Bond Debt Service - Debt Service Gas Tax Bond - Service TIF Bond Debt - Service CIL Bond Debt TIFIA Debt Service I (83,598,176.8) (83,598,176.8) TIFIA Debt Service II (896,366,536.6) (896,366,536.6) Infrastructure Bank Debt Service I (867,451,487.0) (867,451,487.0) Infrastructure Bank Debt Service II (1,071,546,447.4) RRIF Debt Service(1,071,546,447.4) I (477,703,867.6) (477,703,867.6) RRIF Debt Service II - I RRIF Proceeds - II RRIF Proceeds Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds TIFIA Proceeds II Sales Tax Proceeds Gas Tax Proceeds TIF Proceeds CIL Proceeds Federal Grant 485,556,744 529,936,030 Net Cash Flow 5,224,293,177 5,754,229,206 Reserve

NPV

253

4,005,596,195 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6) -

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

2052 41,519,030 9,019,319,093 4,151,903 207,595,150 311,392,726 52,888,932 723,479,688 445,550,000 10,764,377,492

2053 42,107,665 9,147,190,248 4,210,767 210,538,325 315,807,488 53,926,711 735,229,439 456,250,000 10,923,152,977

1.75% (4,915,266,731) (1,229,208,778) (177,368,526) (6,321,844,036)

(5,001,156,102) (1,276,823,504) (180,915,897) (6,458,895,503)

(5,088,546,304) (1,322,974,305) (92,267,107) (6,503,787,717)

(5,177,463,562) (1,938,804,152) (94,112,450) (7,210,380,163)

4,092,096,043 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

4,130,689,319 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

4,148,615,137 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

4,260,589,776 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,712,772,814 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

16,489,116,252 8,867,997,396 3,431,669,401 2,471,601,834 695,429,527 7,058,588,414

3% 9,239,955,874

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

2051 40,937,609 8,893,014,944 4,093,761 204,688,043 307,032,065 51,871,502 711,960,324 434,850,000 10,607,510,639

(4,830,852,416) (1,197,237,437) (173,890,712) (6,201,980,566)

154,010,657,823 608,929,680 6,363,158,886

734,022,804 7,792,611,218

751,948,621 8,544,559,839

863,923,260 9,408,483,100

42,70 9,276,64 4,27 213,51 320,27 54,98 747,21 466,95 11,083,85

(5,267,93 (1,993,37

(95,99 (7,357,30

3,726,55

(83,598, (896,366, (867,451, (1,071,546, (477,703,

316,106,298 9,724,589,398

329,88 10,054,47

Penndesign 2012 studio report

B-11 Conservative Case Financing Model

ODEL

nue

harge

$ $

CONSERVATIVE CASE MODEL 2050 Year 40,363,339 HSR Ridership $ 8,768,264,431 HSR Ridership Revenue 10% HSR Food/Beverage Revenue 4,036,334 5.00 HSR Advertising Revenue 201,816,695 7.50 HSR Passenger Facility Charge 302,725,043 50,874,022 Utility Easements Rolling Stock Leaseback700,666,830 5% Station Retail 424,150,000 TOTAL REVENUE 10,452,533,355

2051 2052 40,937,609 41,519,030 8,893,014,944 $ 9,019,319,093 4,093,761 4,151,903 10% 207,595,150 $ 204,688,043 5.00 311,392,726 $ 307,032,065 7.50 51,871,502 52,888,932 711,960,324 723,479,688 434,850,000 445,550,000 5% 10,607,510,639 10,764,377,492

with ridership growth) 1.75% growth) O&M Growth Rate (In line with ridership st HSR (5,001,156,102) O&M Labor/Non-Labor(4,915,266,731) Cost HSR n-HSR NEC Cost O&M Labor/Non-Labor(1,229,208,778) Non-HSR NEC Cost(1,276,823,504) (35,251,037,236) Construction Cost (35,251,037,236) % of Construct 3% Environmental Mitigation (% of Construct 3% Existing Corridor Upgrades % of Construc 18% Overhead Cost Allocation (% of Construc 18% (177,368,526) (180,915,897) Rolling Stock (6,321,844,036) (6,458,895,503) TOTAL COSTS

Unlevered Cash Flow 4,130,689,319 Sales Tax Bond Debt Service Gas Tax Bond Debt Service TIF Bond Debt Service CIL Bond Debt Service TIFIA Debt Service I TIFIA Debt Service II (83,598,176.8) (896,366,536.6) Infrastructure Bank Debt Service I (867,451,487.0) Infrastructure Bank Debt Service II (1,071,546,447.4) RRIF Debt Service I RRIF Debt Service II (477,703,867.6)

ce e

ervice I ervice II

ds I ds II

RRIF Proceeds I RRIF Proceeds II Infrastructure Bank Proceeds I Infrastructure Bank Proceeds II TIFIA Proceeds TIFIA Proceeds II 16,489,116,252 Sales Tax Proceeds 154,010,657,823 Gas 8,867,997,396 Tax Proceeds TIF3,431,669,401 Proceeds 2,471,601,834 CIL Proceeds Federal Grant Net Cash Flow Reserve

734,022,804 7,792,611,218

3% NPV 9,239,955,874

4,148,615,137 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

Sales Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

16,489,116,252 7,192,858,748 23,681,975,000 1,766,501,500

unt

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

Gas Tax Bond Undiscounted 20 year amount (+)Transaction fees Total Proceeds Annual Debt-Service to NE

8,867,997,396 3,906,717,604 12,774,715,000 952,898,400

254

2054 2013 42,703,575 9,276,641,710 4,270,357 213,517,873 320,276,810 54,985,245 747,214,185 466,950,000 11,083,856,181

2055 2014 43,306,820 9,407,686,703 4,330,682 216,534,099 324,801,149 56,064,950 759,438,626 477,650,000 11,246,506,209

(5,177,463,562) (1,938,804,152) (94,112,450) (7,210,380,163) 0

(5,267,934,560) (1,993,373,569) (95,994,699) (7,357,302,828) 0

(5,359,986,449) (1,910,802,606) (669,083,049) (7,939,872,104) 0

4,260,589,776 (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,712,772,814 - - - - - (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,726,553,353 - - - - - (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

3,306,634,106 - - - - - (83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

16,489,116,2528,867,997,3963,431,669,4012,471,601,834863,923,260 9,408,483,100

3% 9,239,955,874

unt

2053 2012 42,107,665 9,147,190,248 4,210,767 210,538,325 315,807,488 53,926,711 735,229,439 456,250,000 10,923,152,977

(5,088,546,304) (1,322,974,305) (92,267,107) (6,503,787,717)

154,010,657,823 751,948,621 8,544,559,839

- - - - 316,106,298 0 9,724,589,398 0

- - - - 329,886,838 0 10,054,476,236 0

- - - - (90,032,410) 0 9,964,443,826 0

2056 2015 43,917,461 9,540,338,365 4,391,746 219,587,306 329,380,958 57,940,626 771,907,556 488,350,000 11,411,896,558

(5,453,646,852)$ (1,960,006,695) - $ (682,464,710) (8,096,118,257) 0 3,315,778,301 - ----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

----(80,888,215) 0 9,883,555,612 0

2057 2058 205 2016 2017 2018 44,535,558 45,161,171 45,794,35 9,674,609,741 $$ 9,810,513,772 $$ 9,948,063,28 4,453,556 4,516,117 4,579,43 222,677,792 225,805,857 228,971,79 334,016,688 338,708,786 343,457,69 58,289,574 59,435,365 60,604,07 (272,940) 21,425,495 21,834,005 784,625,865 797,598,539 810,830,66 499,050,000 509,750,000 520,450,00 11,577,723,216 11,746,328,437 11,916,956,95 (272,940) 21,425,495 21,834,005

(5,548,943,877) - $ (2,007,798,277) -- $ 000(560,286,881) (8,117,029,035) 0 3,460,694,181 (272,940) -----(83,598,176.8) (896,366,536.6) (867,451,487.0) (1,071,546,447.4) (477,703,867.6)

----

----272,940.064,027,666 (0) 9,947,583,278 (0)

(5,645,906,122) - $ (2,054,153,235) -- $ (251,000,000)(3,000,000,000)(540,000,000)(571,492,619) (8,271,551,977) (3,791,000,000) 3,474,776,461 (3,769,574,505) ----(83,598,176.8) -(867,451,487.0) (1,071,546,447.4) (477,703,867.6)

-----16,489,116,251.88,867,997,396.0---974,476,482 21,587,539,143 10,922,059,760 21,587,539,142

(5,744,562,68 (2,099,047,04 (251,000,000 (3,000,000,000 (540,000,000 (582,922,47 (8,426,532,20 (3,791,000,000

3,490,424,75 (3,769,165,995 ----(83,598,176 -(867,451,487 (1,071,546,447(477,703,867

------

-----990,124,77 (3,769,165,995 11,912,184,53 17,818,373,147

Penndesign 2012 studio report

2056 917,461 338,365 391,746 587,306 380,958 940,626 907,556 350,000 896,558

2057 44,535,558 9,674,609,741 4,453,556 222,677,792 334,016,688 58,289,574 784,625,865 499,050,000 11,577,723,216