MICHIGAN CITY — The South Shore Line Double Track project is a half-step closer to fruition locally after the Michigan City Redevelopment Commission voted unanimously to seek $5.39 million in tax increment financing bonds to contribute to the project.
But the decision is ultimately up to the Michigan City Common Council, which will vote Tuesday on whether to allow the RDC to secure the money.
A dozen Michigan City and La Porte County residents and businesspeople expressed their support for the project and its funding during the RDC’s public hearing on Monday.
Reduced commute times to and from Chicago were but a fraction of the benefits they cited. Increasing residents’ wages, improving city sustainability, and attracting commercial and residential investment were among the other potential advantages they envision.
Prior to the hearing, Michael Noland, general manager of the Northern Indiana Commuter Transportation District, updated the RDC on the status of the Double Track-Northwest Indiana project, which was presented to the Federal Transit Administration last year, and cleared the first milestone – project development – in a three-step approval process.
On June 27, the state requested a rating on the project to move it along to the second phase – engineering. Noland said he anticipates the federal government will return the project rating within the next couple months.
Mark Pascarella, director of debt management at the Indiana Finance Authority, said the higher the project is rated, the sooner it can be approved. And to secure the highest possible rating and help expedite that process, he recommended that as much of the project funding as possible be deposited into a trust set up exclusively for the project.
“That way we’re able to show the FTA that we are ready and that we have the money committed,” he said.
The date by which the IFA wants to have Michigan City’s $12.2 million contribution is Oct. 22, which is why the request for financing is before the RDC and Common Council in August.
Andy Mouser, financial advisor with Baker Tilly, explained that of that $12.2 million, the RDC plans to secure $5.39 million in TIF bonds, and offset it with $7.6 million cash on hand from the city’s South Side TIF.
He said that although the city will seek 20-year financing, the $650,000 it plans to make in annual payment on the bonds will allow for payoff within 10 years.
“From a broader TIF perspective, the city’s always done a good job of funding primarily infrastructure improvements, and especially infrastructure that would have had to have been funded through other means,” Mouser said. “So, by funding it from TIF, you’ve avoided levying additional property taxes or utilizing additional income tax revenues.”
Noland clarified that the four Indiana counties through which the South Shore Line runs – Lake, Porter, La Porte and St. Joseph – are responsible for contributing $18.25 million each.
Since it stands to benefit most directly, Michigan City is footing the largest percentage of La Porte County’s local match. The rest of the county will contribute just over $6 million.
In addition to the counties’ contributions, the state will provide up to $205 million, Pascarella said.
Noland said he anticipates construction will begin in 2021, and revenue service to begin in 2023.
He also shared some statistics to illustrate the projected benefits for Michigan City.
Currently, about 400 people daily board the South Shore at the two Michigan City stations, but Noland anticipates that number will grow by 1,000 once the double track is installed.
“Our current average South Shore rider’s household income is close to $90,000 a year,” he said. “The average household in our four-county region is somewhere around $50,000 a year. Essentially, what happens is we take people to the city of Chicago and they get about a 40 percent wage premium on average.
“So, they go to the city, and they get the extra money, and they bring it back here and they spend it. By increasing our ridership, we have more opportunity for our residents to go in and get those higher-paying jobs.”
Noland said that by increasing the frequency of trains and reducing commute time from Michigan City to Chicago from approximately 100 minutes to 67, ridership will increase dramatically.
“Along with that is the opportunity for creation of private sector investment,” he said. “It’s projected that on the basis of this investment, it’s going to generate somewhere – in Michigan City alone – in the vicinity of $700 million or so of private sector investment over the next 20 years.”
He said projections also show an increase of 500 jobs in Michigan City over the next 20 years, and 1,000 jobs over the next 30; and noted those jobs and the private-sector investment will significantly increase the city’s tax base.
According to Noland, construction of the double track alone will pump $60 million to $80 million into the city’s economy, including construction of a new train station at 11th Street and a 500-vehicle shared parking garage downtown.
Even the Carroll Avenue station is expected to see growth, he said.
“One of the things that we committed to do in the agreement several years ago was to maintain that facility at Carroll Avenue, where we employ about 350 people,” Noland said. “And we’ll probably add another 30-40 positions with the double-track project, and keep it here for another several decades at a minimum.”
Double Track progress
n The Northern Indiana Commuter Transportation District, operator of the South Shore Line, expects construction on the Double Track Northwest Indiana Project to begin in 2021 and end in 2023. The earliest NICTD would begin purchasing real estate would be in December 2019, with most acquisitions occurring in 2020 and early 2021.
n An environmental analysis was conducted in compliance with the National Environmental Policy Act and concluded in November 2018 with the Federal Transit Administration’s issuance of a Finding of No Significant Impact.
n The FTA’s Capital Investment Grant Program has three phases – 1) Project Development; 2) Engineering; and 3) Construction. Each phase involves extensive requirements that must be completed and approved by the FTA in order to advance to the next. DT-NWI has completed Project Development, and formally requested entrance into the Engineering phase on June 27.
n NICTD concurrently requested a Project Rating, determined by FTA and used to justify funding recommendations to Congress. A rating of Medium or higher is required to advance to the next phase in the CIG program. NICTD expects to hear from FTA on its request to enter the Engineering phase, and to receive a Project Rating, by the end of the year.
n DT-NWI project updates are posted in the “Next Steps” section of the project website at doubletrack-nwi.com. For general project questions, call 219-850-4457 or email firstname.lastname@example.org. For real estate questions, call 219-841-9974 or email email@example.com.