By William Melhado, The Texas Tribune
Oct. 27, 2022
“Dallas-Houston bullet train developer vows project is on track, but state officials lack confidence” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
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A lawyer for nearly 100 property owners who are living with the threat of their land being seized said he will seek legal action against Texas Central, the company that for a decade has promised to build a bullet train between Dallas and Houston, if the company does not provide more details about the looming project.
Landowners whose property could be in the path of the train track have petitioned the company to answer their questions. Patrick McShan, the lawyer representing property owners, said he’s prepared to ask a judge to allow him to depose the company — which has said little about the project — to get answers for his clients.
The legal threat against Texas Central comes a decade after the company unveiled a plan to construct a 240-mile bullet train, modeled after the Japanese Shinkansen trains, between Dallas and Houston.
Despite the initial excitement of a high-speed rail train in Texas, a veil of silence has fallen over the company.
While Texas Central secured eminent domain authority to seize private property from the Texas Supreme Court, the CEO, Carlos Aguilar, and board of directors departed, leaving the company in the hands of an outside consultant.
The lack of communication from Texas Central has left the landowners McShan represents in limbo.
“For six, seven, eight years, they’ve had to go to sleep every night wondering if they’re going to lose their property,” McShan said, referring to the landowners he represents. “They use their property as collateral for loans and to run their business and it’s just been hanging over their heads forever.”
McShan’s list of questions included inquiries about the company’s leadership and permits for the project.
Robert Neblett, Texas Central’s attorney, said the company spent a “considerable sum” of money acquiring property for this project. Neblett added the company owns hundreds of tracts of land purchased for this project, but he did not confirm The Texas Tribune’s analysis of property owned by Texas Central.
“Texas Central’s chief executive is Michael Bui. Texas Central is not currently looking for a CEO to replace him nor is it looking for a new Board of Directors,” Neblett said in an emailed statement to the Tribune.
Neblett added that Texas Central plans to obtain any and all federal Surface Transportation Board certifications required to construct and operate the project.
Bui is a senior management consultant with FTI Consulting, a business advisory that lists corporate recovery as one of his qualifications. Bui also served as an adviser to a private energy company that provided power to the Electric Reliability Council of Texas following its court-ordered restructuring after the February 2021 freeze that caused hundreds of deaths while knocking out power and heat to millions of people.
Texas Central made a rare public statement Wednesday, sharing a photograph of Houston Mayor Sylvester Turner, Houston City Council members and Greater Houston Partnership President and CEO Bob Harvey during an “investment and trade mission” in Tokyo and Chiba, a sister city of Houston.
According to a news release Houston Mayor Sylvester Turner’s office released Thursday, unnamed representatives of Texas Central said, “the landscape changed since March 2022, when the company underwent a restructuring effort, and the future of the high-speed train remains bright.”
Houston and Dallas leaders have long championed the project that would connect the two cities. Turner said the bullet train would be an economic stimulant for the entire state.
“We had some very productive and constructive discussions about the train in Japan,” Turner said. “The leadership in Houston is very supportive and wants it to happen. I look forward to working with Texas Central and our state and federal partners to advance this project. If you build it, people will take full advantage of it.”
Still in contention is how much land the company has acquired in the 10 years since the project was announced, and how much land is still needed for the bullet train.
Texas Central owns upwards of 330 properties across the 10 counties the company has indicated to build in. Some of those tracts occupy only 1,500 square feet, a fraction of an acre, while others span upwards of 20 acres, according to an analysis by the Tribune of data from local appraisal districts.
The total value of those properties was appraised at more than $38 million, though some counties listed only the market price.
One of the landowners’ primary concerns is the option for Texas Central to use eminent domain to seize private property. In June, the Texas Supreme Court ruled that the company and its partners did qualify as “interurban electric railway companies” and could invoke eminent domain authority to build the high-speed rail project.
“Eminent domain will only be used as a last resort to acquire property, should negotiations fail, for those properties that have not been acquired. We don’t know at this time when that will occur,” Neblett said in response to questions about the company’s authority to seize private property.
McShan said the state’s Supreme Court settled the eminent domain decision, but he has a list of lingering questions for Texas Central.
“You need to come and sit someone down,” McShan told the Tribune. “Give me a witness and convince me that you’re still planning to do this, and then maybe I don’t file a lawsuit.”
During the 2022 Texas Tribune Festival in September, transportation officials were asked about the feasibility of the project’s success.
“The last time we heard from them was over a year ago,” said Bruce Bugg, chair of the Texas Transportation Commission. He said the Texas Department of Transportation, which he oversees, served as technical advisers for an environmental assessment of the project released by the Federal Railroad Administration in November 2020. But since then, Texas Central has stopped communicating with the state’s transportation agency.
State Rep. Terry Canales, D-Edinburg, the chair of the state House Transportation Committee, said with Texas’ rapid population growth, high-speed rail would greatly benefit the state but it would likely need to be subsidized.
“It should be something we got in the toolbox that we’re going to think about, but the idea that it’s going to be paid for and maintain itself by private industry — the numbers simply don’t work,” Canales said.
State Sen. Robert Nichols, R-Jacksonville, the chair of the state Senate Committee on Transportation, shared Canales’ funding concerns. Nichols noted that every high-speed rail project in the world requires government subsidies, yet Texas Central has maintained that public financing will not be necessary to fund the bullet train. He said financing the train isn’t something he would consider when drafting the state budget, because the project serves only a limited population.
Around the last time Bugg heard from the company, Texas Central had scaled back its efforts to acquire land to build the train based on an analysis of public records.
Since then, much of the company’s public presence has diminished over time, with little information about the bullet train’s progress known.
Joshua Fechter contributed to this story.
Disclosure: Greater Houston Partnership and Texas Central have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
This article originally appeared in The Texas Tribune at https://www.texastribune.org/2022/10/27/texas-high-speed-rail-dallas-houston/.
The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.
