Photo, Bombardier Corporation

Mayor’s Task Force to Reestablish Rail Service to Phoenixville, Pennsylvania

Southeast Pennsylvania Transit Authority Rail Extension Project 

Phoenixville/Schuylkill Township/King of Prussia to Philadelphia

April 3 , 2019

Background

Rail passenger service to Phoenixville ended in 1981 with the termination of Southeastern Pennsylvania Transportation Authority (SEPTA) diesel powered trains between Reading Terminal in Philadelphia, Reading, and Pottsville, Pennsylvania. Since 1981, there have been significant changes in Phoenixville, primarily centered around the closing of the Phoenix Steel Corporation plant (originally the Phoenix Iron Works) in the early 1990’s and the subsequent redevelopment of the industrial site and simultaneous revitalization of the downtown area of the Borough.

Process

The Transportation Revitalization Investment District Act (TRID) was created by Act 238 in 2004 and amended in 2016 by Act 151 to provide for the specific purposes and intent of a designated TRID include to include:

Increase overall ridership on public transportation systems, including AMTRAK, while generating additional revenues for current and expanded services, capital improvements and related ongoing maintenance.

The Borough of Phoenixville is seeking to work with other municipalities, with an active involvement by SEPTA and related county agencies, for the purpose of establishing an extension of the SEPTA commuter rail to Phoenixville along the Norfolk Southern (NS) line. A Mayoral Task Force has been established to determine if a commuter rail line is feasible for Phoenixville, Chester County.

The Transit Corridor Development project provides for an economic development and enhancement of the corridor which includes commercial and residential development, and related infrastructure improvements and activities. The project will anchor transformative, positive, and long-lasting changes that will result in increased investment in the economic competitiveness of the region; increase transportation choices to decrease household and/or business transportation costs and provide other benefits; improved transportation access to employment centers, educational opportunities, and essential services, by providing walkable communities, and improved quality of life. 

The Financing

The project will leverage and incorporate private investment into the overall economic development in and around the corridor projects and the related stations. The nexus between the three corridor projects and the corresponding stations, provides for functional/physical relationships of the proposed Transit Oriented Development (TOD) Projects to the stations.  The projects are within a ¾ mile radius of the station location. The distance ensures the enhancement of the use, connectivity as well as handicapped access to the station. 

A portion of incremental tax revenues transferred to a TRID shall be dedicated to completion and future maintenance of the specific and necessary transit capital and public infrastructure improvements designated in the comprehensive plan amendment and TRID planning study

The potential projects are as follows:

Phoenixville Sites

Phoenixville Steel Site

Phoenixville Station Site

Schuylkill Township Sites:

The 47-acre National Christian Conference Center

Nolan Development

Upper Merion Sites:

Mancill Mills Site

Area around failed Expressway Road project near Norristown Bridge

Value Proposition

SEPTA has commissioned two studies over the past 5 years concerning the impact of transit on property values in the region. The first study in 2013 was somewhat conservative in their estimation of value increases. There was an adjustment made to the model in 2018 to better reflect the actual impact. 

In 2018, SEPTA commissioned a study to measure the impact of rail stations on property values in Bucks, Chester, Delaware and Montgomery Counties. The model excluded the city because of the closeness of the stations and the vibrancy of the public transit locations, including the subway as well as the incoming regional rail. Across all four counties the average property value premium within a three-mile area of the station was $19,400 per transaction in selected communities with over 100 parking spaces and higher levels of service. The value premium in Chester County is $13,500 as Chester County has more limited transit service with only 32.7% of the homes being transit proximate homes compared to Bucks 57%, Montgomery 64%, and Delaware 89% transit proximate homes. Comparisons for payback will use the lesser dollar value. The study identified in Chester County that the average transit proximate house in Paoli is worth $69,400 more and in Thorndale a transit proximate house is worth $46,600 more than houses that are not proximate.

There will need to be a subsidy to increase the number of trips to have more regular service to back into a better property value appreciation number on the formula below. There is a need to reach a .6 service rating to ensure that the multiplier for the following equation as delineated in the SEPTA study SEPTA Drives the Economy of Pennsylvania (Econsult 2018 page 65)

The model that was created considered all of the attributes normally associated with an assessment model and added the rail as a multiplier.  The “zone of influence” for value increase is a 3-mile radius of the train station as determined by the hedonic pricing-controlled model below.

House Value_i= f(S, L, N, Rail)

Where S is the Vector of house characteristics

Where L is the Location

Where N is the Neighborhood/Socioeconomic Conditions

The value increase is the highest in a ½ mile from the station and lessens proportionally the further away within the 3 mile radius.

Three station areas will be created with the reintroduction of passenger rail service along the Norfolk Southern/SEPTA Phoenixville/Philadelphia transportation corridor. Each area will have a separate economic development plan but will be presented as a contiguous economic development package, connected by the rail line. This will create a multi-county Transit Revitalization Investment District (TRID).

The TRID project, according to the Act, will be financed through the creation of value capture districts, which are within a ¾ mile radius of the station. A value capture district would encumber a portion of the property tax dollar increment on selected new development. Property tax would be defined as Municipal, County and School District taxes. The existing taxes would remain, but a portion of the increment or increase on the selected parcels in the tax base, would define the value capture for the project. There will be a direct benefit to the homeowners as homes within the three-mile value area would appreciate in value without increase in taxes.

The project would bring an increase in value to existing homeowners, provide much needed relief to the commuters from the current rush hour gridlock and provide for future growth in the community. 

The Cost

Capital

The following is the estimated capital cost for the project.  There is research necessary to determine if there are any additional costs which would be allocated to the project via SEPTA.

PHOENIXVILLE COMMUTER RAIL SERVICE CAPITAL COST ESTIMATE - SUMMARY TABLE
Track & Signal Improvements at Norristown and Bridgeport	$1,900,000
Overnight and Weekend Storage Facility (Phoenixville)	$1,465,000
Additional Track and Signal Improvements at Stations	$4,350,000
New ALP-45 DP Locomotives (5 @ 11m)	$55,041,176
Purchase and Overhaul Existing Coaches (22 @ $400k)	$8,800,000
Positive Train Control On-Board Equipment Modifications	$1,000,000
Engineering, Environmental and Project Management Services	$1,000,000
General Conditions (e.g., Utilities, HazMat, Archeological, Design Reviews)	$4,000,000
SUBTOTAL	$77,556,176
Stations at Phoenixville, Schuylkill Township and King of Prussia	$17,604,000
SUBTOTAL	$95,160,176
Contingency (10%)	$9,516,018
TOTAL	$104,676,194

Operating and Maintenance 

The following is the best estimate of the operating cost.  The project is on the schedule of the Delaware Regional Planning Commission (DVRPC) for a compete a ridership study.  The number supplied is a conservative estimate.

ESTIMATED OPERATING AND MAINTENANCE COSTS	Ramp Up Period	Rush Hour Only	Full Service
Host Railroad Charges
Train Operating Costs (SEPTA)	$1,753,920	$1,753,920	$7,015,680
NS Track Access Charges (Per Train Mile)	$48,600	$48,600	$194,400
NS Maintenance of Capacity Improvements	$25,000	$25,000	$25,000
Stations
Janitorial - Trash Removal	$37,500	$37,500	$37,500
Utilities - Electric	$9,000	$9,000	$9,000
Maintenance - Repairs and Snow Removal	$30,000	$30,000	$30,000
Ground Leases
Storage Facility
Track Maintenance	$10,000	$10,000	$10,000
Security	$25,000	$25,000	$25,000
Ground Lease
Total Estimated Annual Operating & Maintenance Costs
Totals:	$1,939,020	$1,939,020	$7,346,580
ESTIMATED FARE REVENUE
Assumed Weekday Average Fare	$6.36	$5.36	$5.36
Assumed Weekend Day Average Fare	N/A	N/A	$3.92
Estimated Annual Fare Revenue	$1,458,030	$2,457,560	$5,668,794
ESTIMATED OPERATING (DEFICIT) OR SURPLUS	$ (480,990)	$518,540	$ (1,677,786)