What’s in It for Us?

What’s in It for Us?

Taking a Close Look at NWI’s Big Rail Plans
By Nick Dmitrovich with the NWI RDA

It feels like everyone’s been talking about it lately – two seriously big commuter rail projects that could potentially redefine economic development in the state’s two northwesternmost counties. Just how big of an impact are we talking about here? What kind of potential could these railway extensions bring to our region?

Depending on who you ask, the predicted outlook for the South Shore Double Tracking project and the West Lake Corridor Extension ranges from critically significant to the future of our economic success to simply an additional attractive feature for our region’s talent-attraction portfolio. But one thing’s for certain, our area’s leading economic development experts certainly seem to be behind these projects as a means to elevate Northwest Indiana out of the often-reported slow-growth plateau we seem to have remained on over the last several years.

For example, a recent workforce and economic indicators breakfast held in Merrillville brought together entities such as the NWI Workforce Board, the NWI Forum, the Center of Workforce Innovations, NIPSCO, the NWI Business RoundTable, Purdue University Northwest (PUN), Ivy Tech Community College, and more, to discuss several key elements for the future of NWI’s success as an economy. Interestingly, as the panel members discussed these various points, many of them kept returning to these two rail projects as a means to satisfy some of the region’s largest challenges, including leveraging transportation oriented development, accelerating our population growth, enhancing quality of place, and increasing participation in our labor force. Which is not to say that rail investment is any type of economic cure-all, but nevertheless can be a very large step in the right direction.

Bob Schaefer, member of the NWI Workforce Board and owner of Community Dynamics, said, “Our region’s labor force has remained relatively flat since the year 2000. One of the major assets that we have here is transportation. This adds value for companies that want to locate here.”

Heather Ennis, president and CEO of the NWI Forum, said, “These projects will be critically important for attracting talent to our region.”

“Infrastructure investment spurs additional development along those rail lines, which in turn spurs workforce development efforts,” said Anthony Sindone, clinical assistant professor of finance and economic development with PUN. “These rail projects will be very good for our region. It’s very exciting stuff.”

Let’s Get Down to Brass Tacks – What’s There to Gain?

The short answer for what NWI would gain from these two rail projects is – a lot. To find a more comprehensive breakdown of the predicted economic impact, the best source is the impeccably detailed Comprehensive Strategic Plan published by the NWI Reginal Development Authority (RDA) in conjunction with Policy Analytics LLC and American Structurepoint. These three entities really did their due diligence in closely scrutinizing virtually every aspect of the ripple effect that increased commuter rail connectivity could bring to our region. Their findings are best examined by breaking down the impact into several distinct categories, which are as follows:

Personal Income Growth

The two rail projects together have the potential to result in an average annual increase in personal income of $50 million, resulting in a total increase of $1.5 billion by 2046. This value represents the total personal income gain to Northwest Indiana residents, including commuter income gained for individuals working in Chicago.

Employment Growth

In the early stages of the forecast period, most jobs are construction industry jobs associated with the development and construction of commuter rail assets. Over the longer term, these jobs are replaced by ongoing business activity as residents and firms are attracted to the region. By 2046, Northwest Indiana commuter rail investments will support an additional 5,700 annual jobs in the scenario where both projects come to fruition. A recent update to that figure, reached through new data included from Michigan City, actually puts that figure almost 440 jobs higher.

Employment by Industry

Population Growth

The jury is still out as to whether the population of NWI has remained stagnant over the last 15 years or whether it’s actually decreased. One thing’s for sure at least; it’s not moving in the direction we need it to for economic growth. As such, developers behind the proposed rail augmentations have frequently cited the added infrastructure as being particularly attractive to younger generations who may be considering relocating or remaining in NWI. While that may be a bit of a subjective topic, adding features to our amenities portfolio should only suffice to make the region more marketable.

According to projections from the RDA, building the two rail projects alongside associated station area developments in Gary, East Chicago, and Portage are projected to increase the population of NWI by more than 11,000. This is a 1.4 percent increase over the baseline “No Build” scenario.

State Tax Benefits

The two rail projects, once completed, will produce an increase in fiscal impact to state taxing units. The Double Tracking scenario assumes widespread redevelopment along the existing South Shore route in response to faster commute times to Chicago and the implementation of a comprehensive transit oriented economic development strategy. This scenario results in an additional $54 million in state sales and income tax revenues annually by 2038. In aggregate, between 2018 and 2038, this scenario produces $310 million in state sales tax and $192 million in state income tax. The new figures that recently came from Michigan City’s included data increases those figures by $40 million and $28 million, respectively.

Local Tax Benefits

The level of investment projected around commuter rail stations will produce significant property tax revenues as development comes online. Over 20 years, station area development is projected to generate $207 million for the West Lake Corridor station areas and $227 million for stations along the South Shore for a total of about $435 million. Michigan City’s new data adds about $40 million to that amount. Also, the redevelopment of station areas should promote increases in value of existing sites and structures, and in areas not directly involved in transit oriented development.

So What’s the Final ROI?

So here’s the real-deal bottom line. The calculation on everyone’s mind. The return on investment. According to data from the three entities who compiled the official report, Indiana is looking to get a return of about 4.4 times the funds expended on these two projects. For every dollar we spend on this, we’re projected to get about $4.40 back.

That’s a pretty solid ROI for infrastructure investment. Average ROIs for transportation infrastructure spending are typically somewhere between $1.50 to $2.50 for every dollar spent, making the West Lake Corridor and South Shore Double Tracking projects particularly unique. These two projects are definitely going to be worth keeping an eye on as we move on down the line.

 


A Look at the Two Projects

  • The West Lake Corridor will run north and south from the proposed Hammond Gateway station. Departing from Hammond, the WLC route has proposed stops in South Hammond at 173rd , Munster at Ridge Road, and Munster/Dyer at Main Street.The WLC extension will require the realignment of the existing South Shore line at Hammond and the establishment of a new “Hammond Gateway” station that would serve both the West Lake and South Shore routes. Total cost = $615.5 million.
  • The South Shore Double Tracking project includes installing parallel “double-tracking” along the South Shore line as far east as Michigan City, converting all major stops to high platform boarding stations and realigning the 11th Michigan City station to allow better access and faster throughput for commuter rail. Total cost = $210 million.

West Lake Corridor

South Shore Double Tracking

 

 

 

 

 

 

 

 

 


The Need for New Commuter Rail Visualized

Chicago has 490 miles of commuter rail. Lake and Porter counties contain only 33 miles. This disparity limits accessibility to the Chicago job market.

Source: NWI RDA


RDA Receives Outstanding Transportation Plan Award for NWI Commuter Rail Vision

RDA President and CEO Bill Hanna and COO Sherri Ziller.

The Indiana chapter of the American Planning Association has selected the Northwest Indiana Regional Development Authority’s comprehensive strategic plan update, which includes the commuter rail expansion projects and all the additional development associated with them, as its 2017 Outstanding Transportation Plan Award winner.

“It was a very thorough plan that did a good job of showing future investment,” said Lisa Dunaway, instructor of urban planning at Ball State University and chair of this year’s awards committee. “It is a holistic plan that includes short and long-term implementation steps. We felt it could be a very good model to be replicated by other groups.”

“We are honored to be recognized by the Indiana chapter of the American Planning Association,” says RDA President and CEO Bill Hanna. “This award reflects the commitment of our staff and our partners at American Structurepoint and Policy Analytics to bringing transformational change to Northwest Indiana. Commuter rail expansion will bring thousands of new jobs and billions in private investment to the region, and this plan will ensure that we maximize those investments to make Northwest Indiana the leading area for economic growth in the state.”


 

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