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transportaTION High-speed rail project beset by political minefields By Karoun Demirjian staff writer Washington — Things were supposed to be settled by now. Construction workers were supposed to be digging up corridors, pouring concrete, laying track and otherwise making the country's first governmentendorsed high-speed rail line rise out of the desert between Las Vegas and the Los Angeles exurbs. On the wings of one project, Southern Nevada's economy was supposed to be back to work. But in the years since the XpressWest project (formerly Desert XPress) applied for an industry-backed federal loan to finance the venture, it has run into almost every conceivable political roadblock — and in March, one direct assault. "The risks to the taxpayer from funding this project are untenable," Rep. Paul Ryan and Sen. Jeff Sessions, the top-ranking Budget Committee Republicans in their respective chambers, wrote to Transportation Secretary Ray LaHood in March. "We would urge the administration to reject the XpressWest loan application and to direct its available RRIF funds to more worthy transportation projects." It's the most scathing indictment yet of a project that has suffered from extraordinarily unlucky timing — and the direct attack has at least some of its supporters concerned that the pushback may relegate an already-beleaguered project even further to the back burner. "I am concerned about it because of the numbers that I've seen and the amount of jobs it would create," said Nevada Sen. Dean Heller, whose staff is courtesy of xpresswest snaking through the desert: An artist's rendering depicts a train on the XpressWest high-speed rail line. speaking to Sen. Majority Leader Harry Reid's about what could be done to resist the sudden effort to undermine to the project. "It was disappointing that they put that (letter) out there because the funds that are used ... have been funded by the railroad industry for this purpose." "It's more of this Tea Party-driven response," Reid said. "That is nonsense to hear from the two budget chairs who want to go back to the dark ages on most everything." In theory, lawmakers and lobbyists familiar with ongoing negotiations say the Obama administration is on board with the XpressWest plan. They are, at present, merely going back and forth about the interest rates and size of the loan. Anthony Marnell, the main force behind the high-speed rail venture who has already put up $1.5 billion from private investors, wants an additional $5.5 billion from the Federal Railroad Administration's Railroad Rehabilitation & Improvement Financing program. The $35 billion federal fund is financed by the railroad industry and has lent money to 33 rail projects since its inception, according to the railroad administration's website. The terms of the loan, which was initially supposed to be awarded in mid2012, are expected to be settled soon — which partially inspired the letter from Ryan and Sessions. Questions have also been raised about the viability of the estimated 80,000 jobs that the project would create — enough to knock Nevada's unemployment rate down by 5 or 6 percent. A study by the Associated Press found that only 722 of the estimated 80,000 jobs would be permanent. And finally, there is a concern from the government about funding. XpressWest was initially pitched as a fully self-funded enterprise. But in the post-recession period, backers found there was not as much available private capital for high-speed rail as they had anticipated. That's why they need the federal loan to meet the $7 billion project cost. XpressWest officials are certain that once they secure a government loan, they will have the credibility to find more private financiers. The federal government, however, would like to see the rail project pony up more money before it gives the project the green light, lobbyist Billy Vassiliadis said. "It's almost like a chicken and egg," Vassiliadis said. "If we get the designations, then we can go shop." The Nevada delegation has no XpressWest detractors – not even from members whose districts won't serve as direct hosts for the project. "I appreciate that this is a government program ... from what I understand, they're going to be competing for money that's already there," said Republican Rep. Mark Amodei, who represents Nevada's northernmost district. "If they compete successfully for that, then that's fine with me." "Critics armed with partisan math need to get out of the way," said Democratic Rep. Steven Horsford, whose district covers the swath of the state from North Las Vegas to Amodei's district. "Neither a senator from Alabama nor a congressman from Wisconsin will derail a Nevada jobs project." For the Health of Your Business Maria Nutile, esq. Susan M. Pitz, esq. Kelly S. McIntosh, esq. Lyn E. Beggs, esq. Celebrating 10 Years Serving Nevada's Business Community | 1 APRIL 2013 20130401_VI07_F.indd 7 | WWW.NUTILEPITZ.COM • • • • • Business Formation and Structure Sales and Acquisitions Contract Review and Negotiation Healthcare Compliance/HIPAA Fraud and Abuse/Licensing Investigations 1070 W. HORIZON RIDGE, STE 210 • HENDERSON, NV 89012 • 702.307.4880 675 SIERRA ROSE DR, STE 101 • RENO, NV 89511 • 775.284.1020 @NutilePitzLaw 7 3/28/13 2:53:12 PM