Everything you need to know about Amtrak’s return to Mobile City Council for first time since 2020

Amtrak officials will return before the Mobile City Council for the first time Tuesday in four years and three months -- 1,575 days -- to talk about the Gulf Coast project and continue to seek support for it.

The council’s Economic, Cultural & Civic Development Committee will meet at 1 p.m. with Amtrak officials to discuss the project.

No vote of the entire council is expected to take place Tuesday on either a real estate agreement to allow for a train station in downtown Mobile, or for an operation subsidy to support the project. The meeting will take place in the Mobile City Council conference room, located on the 9th floor of the South Tower of Government Plaza, 205 Government Street. It is considered a “working” meeting, and no public comments will be taken.

So much has changed since Feb. 4, 2020, the day the council last took up Amtrak’s project along the Gulf Coast.

Here’s an abbreviated timeline:

• The global pandemic occurred a month after the council voted 6-1 to support the project with an approximately $3 million subsidy to support the project for three years.
• The project, which calls for two daily round trips between Mobile and New Orleans, found big-time opposition among freight shipping companies along the rail route - Norfolk Southern and CSX.
• Opposition also came from the State of Alabama, including the Alabama State Port Authority whose leadership once claimed that adding two passenger trains daily between Alabama and Louisiana would prove “calamitous” to the port’s rail operations.
• Litigation, brought by Amtrak against the freight operators, put the project on pause for the last couple of years. The Port Authority joined in the lawsuit before the U.S. Surface Transportation Board. A public hearing in February 2022, drew interested parties throughout the country and elevated the discussion beyond the Gulf Coast project. Officials from the Midwest and beyond linked the decision on the Gulf Coast route to the overall fate of America’s rail industry. The litigation was quietly settled in November 2022, under a confidential agreement and discussions about how Amtrak service would restart by 2023. That didn’t happen.
• Negotiations with the City of Mobile over the lease and operations agreements did not begin until sometime after a $178.4 million Consolidated Rail Infrastructure and Safety Improvements (CRISI) program grant was awarded to Amtrak by the Federal Railroad Administration in September 2023.
• Negotiations have been slow, and frustrations outside of Mobile have mounted. As one passenger rail proponent from Arizona said in December, “We’re not colonizing Mars. Trains have been around for 190 years. We can do this. If there are unreasonable stumbling blocks, they need to be removed, and fast.”
• The STB grew impatient with the languishing that has occurred since the settlement agreement, and called all parties involved in the case back to Washington, D.C., for a status update. The federal board turned most of its frustrations on Amtrak, which brought the case to them in the first place and requested progress in getting the litigation finalized. Amtrak, in a filing to the STB, said it wanted to finalize the case in May. It appears that a conclusion will happen in June.
• Amtrak’s return to Mobile started on a positive for its project after the Zoning Board of Adjustments granted a special exception on May 6, to allow Amtrak to build a passenger train depot at the foot of Government Street, directly across Water Street from the Exploreum. It was non-controversial. But after the vote, council members warned: The issue isn’t over yet, and questions remain.

Here are the 5 key things to watch for on Tuesday:

1. Executive session or public meeting. Some council members have suggested that Tuesday’s meeting be held behind closed doors. The committee meeting is not advertised as an executive session, but one could take place to discuss real estate matters. A discussion on the operation’s subsidy will have to take place in public session.

2. Operations agreement. The biggest sticking point among some council members is to dedicate $3.048 million in funds over three years to support the initial start-up of the Mobile-to-New Orleans route. That’s the same amount the council approved in 2020. The route will include four stops in coastal Mississippi -- Pascagoula, Biloxi, Gulfport and Bay St. Louis.

Some council members are worried about city taxpayers being on the hook for supporting the train, while no other city along the route is being asked to do the same. Southern Rail Commission members say they will seek other supporters in future years -- including the State of Alabama -- for financial contributions. The States of Mississippi and Louisiana are each contributing $3 million matching funds to support the operations of the train over the first three years. Mississippi is also contributing $13 million to support the CRISI grant, and Louisiana has spent an additional $6 million. Amtrak is also spending millions to get the project restarted. Alabama? $0.

3. Train station. Lengthy negotiations have undergone between the City of Mobile and Amtrak over the lease of city-owned property adjacent to Cooper Riverside Park and across Water Street from the Exploreum. Amtrak wants to build a train depot at the site, while giving Mobile the option to build a more elaborate train station in the future. The site is where a former train station was located before it was destroyed by Hurricane Katrina in 2005. The hurricane also marked the last time a passenger train traveled routinely through the Gulf Coast as part of the Sunset Limited national rail route.

The City Council will have to support the lease agreement to allow for the depot. The Board of Adjustments voted unanimously to grant the special exception to allow the project to move forward. Council members, who are more concerned about the operations agreement, have not expressed public criticism toward the lease arrangement. But the Southern Rail Commission’s chairman said that without approval on both the lease agreement and operations agreement, the project will not happen.

4. High-stakes subsidy. The Mobile City Council has voted to subsidized private ventures before that are viewed as bringing economic activity to the city. Their most criticized vote was to provide a $1.25 million incentive to support a $22 million Topgolf project near Interstate 65. Council members cited the regional impact of Topgolf to the rationale behind the incentive’s support. The Mobile County Commission also approved a $1.25 million subsidy (the county commission is not being asked to participate in the Gulf Coast project).

The council has voted on other incentives directed toward quality-of-life or retail before, notably a 15-year, $7.5 million sales tax exemption to the Shoppes at Bel-Air Mall in 2016. But that incentive included benchmarks, which the mall’s ownership was unable to meet, and the incentive money was not paid out.

The rail is expected to generate revenue and regional travelers, but to what extent? An economic impact analysis of restoring the rail service, conducted in 2018 by the University of Southern Mississippi’s Trent Lott National Center, estimates Alabama would generate $5.48 million from improving the rail line alone. Overall, the total economic input from increased tourism spending would be $11.9 million for every 1% growth in tourism.

Councilman Joel Daves, the lone “No” vote in the 2020 vote, has called the project a “joyride for the affluent.” Of the seven council members from that 2020 vote, only three remain -- Dave, C.J. Small and Gina Gregory. Other council members have raised concerns over the subsidy including Ben Reynolds and Josh Woods. It takes a five-vote supermajority to pass it.

5. Port & CSX support. The Alabama State Port Authority and CSX sent representatives to the Board of Adjustments meeting to confirm they are supportive of the project, and the confidential agreement that looms before the STB. The rail line that runs through Mobile is owned by CSX.

Will both entities return when it counts before the City Council?

“It will advance the implementation of the agreement that allows all parties, including the freight operators and the Port of Mobile to operate a freight rail and passenger rail both safely and efficiently once the infrastructure is complete,” said Jane Covington, a representative with CSX, said during the Board of Adjustments meeting. “From the freight perspective, we are in agreement of this location with the associated infrastructure.”

The board meeting was the first time both entities voiced public support for the overall project in a public setting in Mobile. It also marked a remarkable reversal of public commentary on the project.

Former Port Authority CEO Jimmy Lyons, in 2017, questioned the costs the Amtrak trains would have and whether Mobile would see any benefit. He said he could see coastal Alabama riders traveling by train on weekends to visit New Orleans. But he also questioned the city’s attractiveness to New Orleans residents: “I don’t see an influx of attracting tourists coming into Mobile. I don’t see any real benefit for Mobile.”

Two years ago, CSX president and CEO Jim Foote issued alarms about the project before the STB. “This case is far more than … New Orleans to Mobile. It’s about a new national agenda and Amtrak’s desire to change the law and create a new road map to impose passenger service without working with the host carriers or local communities to first add capacity.”