The $950 million Alameda Corridor East extension, considered a key rail link to expedite the flow of imports from downtown L.A. to inland destinations nationwide, could be delayed indefinitely due to Union Pacific Corp.'s lack of support for the project. While failure to undertake the eastward rail extension would not impede rail traffic, it could severely disrupt the San Gabriel Valley economy, one of the most robust in the region. That's because freight trains are getting ever longer as import volume booms, and those trains are blocking surface streets for significant periods of time. "Traffic and access to our businesses are the biggest problems facing local economic growth," said Harry Baldwin, president of the San Gabriel Valley Council of Governments. "The San Gabriel Valley has been the economic growth engine for L.A. County for the last 10 years, and we need the Alameda Corridor East to continue to grow." The primary purpose of Alameda Corridor East would be to alleviate tie-ups at train crossings by installing 21 rail/street grade separations (either underpasses or overpasses). But those costly improvements would do nothing to speed trains along any faster, meaning they wouldn't make Union Pacific any more money. "So far, there is no added economic incentive to this project that would make it more attractive to Union Pacific," said Mike Furtney, a company spokesman in San Francisco. "We don't want to be perceived as the big stick in the mud, but the reality is that we're in business to make money." Of course, so are thousands of companies throughout the San Gabriel Valley. And their ability to do so could be dramatically impaired as delivery trucks, employees and customers are stuck in their cars waiting for mile-and-a-half-long trains to pass. A recent survey by the San Gabriel Economic Partnership found that few area residents are familiar with the potential for increased train traffic or even knew about the corridor project. That includes businesspeople. "It's amazing that more businesses have not been actively involved," said Elain Cullen, who as senior regional manager for the Los Angeles Economic Development Corp. heads up the business assistance program for the partnership. "I really think it's one of those issues that some have heard about, but not really considered what's involved," Cullen added. "You worry that businesses won't get involved until the trains start coming." The trains, of course, are already coming. But they will come much more frequently, and they'll be much longer, once the Alameda Corridor is completed in 2002. That high-speed rail line linking local seaports to downtown L.A. is already well along in its construction.

Long trains coming

Improvements to L.A. port facilities over the next two decades are expected to increase the frequency of trains coming through the San Gabriel Valley by 20 percent, studies have shown. That, in turn, will bring longer trains that will block roads for up to a half-hour at a time, triple the average wait of today, said Robert Huff, chairman of the Alameda Corridor East Construction Authority, a joint-powers authority created to develop the eastward extension. "We are merely seeking to smooth or facilitate the train traffic that will be coming, whether we do anything or not," Huff said. And that dramatic increase in east-west train traffic is on a collision course with the heavy and rising north-south traffic on surface-streets. "There's a lot of truck and commuter traffic that runs north and south," Cullen said. "There's a lot of truck traffic that runs from the 10 to 15 freeways, especially through the City of Industry." Union Pacific, which owns the 35 miles of San Gabriel Valley track targeted to become the eastward extension of the Alameda Corridor, could be legally compelled to cooperate. But that could take years, and could greatly increase the cost of the project. "We're doing fine and we can move our traffic as fast as we need to," said Union Pacific's Furtney. "That doesn't mean that we're going to hold up the project, but we have our concerns, and it's going to make a difference whether or not we come to this project willingly and cooperatively."

Railroad's predicament

Another sore point stems from the fact that dozens of other regions along Union Pacific's tracks, from the Pacific to the Great Lakes, are also currently pressing the railroad to pitch in on major infrastructure projects.

At the same time, the profit margins the railroad derives from moving cargo containers are razor thin, according to John Rinard, vice president and railroad principal with AECOM Technology Corp., the parent company of engineering and consulting firm DMJM. Not only does Union Pacific have to compete with long-distance truckers, who can pick up a container at the port and drop it of at the customer's front door, it also has had to make huge investments in larger railyards to accommodate the super long container trains. "They have always been very careful about how they spend their money," said Rinard. "And they haven't been making any money on moving containers, so it's not very surprising that they take their time to see what benefit there is in putting money in the San Gabriel Valley."

Rinard negotiated with the railroads when he was overseeing the planning for the Alameda Corridor between the ports and downtown back in the early '90s, and he said it took years to finally work out a deal. Union Pacific is required by federal law to kick in at least 5 percent of the total cost of the Alameda Corridor East extension, which translates to about $50 million. A strict cost/benefit analysis might not justify such an expense. "It comes down to economics and costs per mile," said Rinard. "The question for Union Pacific is, 'Should we spend $50 million to save three minutes in the San Gabriel Valley, or should we spend the same amount to save 30 minutes in New Mexico?'"

Aside from the financial contribution, Union Pacific would have to reroute traffic and use auxiliary tracks during construction of the overpasses and underpasses. Without the railroad's wholehearted participation, that could become difficult and time-consuming. Nevertheless, Rick Richmond, chief executive of the Alameda Corridor East Construction Authority, portrays the situation as being under control. "To be conservative, we did not base our program on extensive railroad participation," he said. "We are assuming that they will contribute their 5 percent, and we are not discouraged by the amount of cooperation we have received from them so far." Still, Richmond concedes that Union Pacific has significant leverage over progress that the Alameda Corridor East can make. For one, the Alameda Corridor East Construction Authority asked the railway to look into the possibility of consolidating a portion of its freight traffic onto one of its two east-west routes through the San Gabriel Valley.

If Union Pacific were to concentrate the freight trains on the southernmost route, which runs between the Alameda Corridor and the City of Industry, it might not be necessary to do some of the planned grade separations on the northern track in, for example, El Monte, according to Richmond. But thus far, the railroad has not informed the construction authority about whether it can or will do this. "We've been waiting for an answer for them and we've been waiting for some time," said Richmond. "We're still trying to push them to analyze this issue within their organization." In addition, Richmond is adamant that Union Pacific cannot expect the same kind of financial compensation in this case that it received from the Alameda Corridor Transportation Authority. And therein may lie the primary reason for the railroad's unresponsiveness.

Comparing the projects

Southern Pacific, which has since been acquired by Union Pacific, received $250 million for its tracks south of downtown L.A., and that money went a long way toward securing the railroad's cooperation with that project. Eventually, the railroad will end up paying back that $250 million through toll charges that will be levied on each railroad car that moves through the corridor, but it will also be getting a super-fast connection between the ports and downtown L.A. For the Alameda Corridor East, on the other hand, there are no plans to outright acquire the railroad's tracks and transform it into a revenue-producing operation. Hence, there will be no huge payday for the railroad, only the need to pay roughly $50 million for something it doesn't really want or need. "(Alameda Corridor and Alameda Corridor East) are very different types of projects and there's going to be no direct benefit to the railroad," conceded Baldwin, president of the San Gabriel Valley Council of Governments. "The purpose is to mitigate traffic delays in the fastest-growing economy in L.A. County and to help local businesses to survive and to grow."

With the Alameda Corridor, Union Pacific and its main competitor, Burlington Northern Santa Fe Corp., are sharing the financial burden since both railroads will be using the corridor. In the case of the Alameda Corridor East, Union Pacific will be the only operator.

Burlington Northern's situation

For its import-cargo hauling, Burlington Northern uses the tracks that run from downtown Los Angeles, through the Mid-Counties region and northern Orange County. Although it does not have to deal with the Alameda Corridor East, Burlington Northern is also facing a major infrastructure project along its tracks. The proposed Orange County Gateway calls for a trench, similar to the Alameda Corridor, running from Fullerton to Yorba Linda in northern Orange County, and might cost Burlington Northern a substantial amount of money as well. Orange County Gateway officials have the same concerns with Burlington Northern. The Orange County Gateway is expected to cost $300 million and construction will not start until 2005. Construction on the Alameda Corridor East, meanwhile, is expected to start early next year, with work on the first major grade separation commencing by the end of 2001.

"I fully expect that the railroad will end up cooperating in the end," said Rinard. "But they are tough customers and it's going to be a challenge to negotiate a deal with them."

Staff reporter Milo Peinemann contributed to this article.

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