Ralph Bivins: Bullet Train Developers Have the Northwest Mall Under Contract (But It’s All a Big Mistake)

RALPH BIVINS: BULLET TRAIN DEVELOPERS HAVE THE NORTHWEST MALL UNDER CONTRACT (BUT IT’S ALL A BIG MISTAKE) Veteran real estate writer Ralph Bivins reports that Texas Central already has the Northwest Mall site it proposed for Houston’s bullet train station under contract. Only a few retailers are open now in the shopping center, including the Palais Royal department store and Thompson’s Antique Center of Texas. A gas station and Burger King also sit at the northeast edge of the mall’s parking lot on the corner of W. 18th St. and the busy West Loop S. — which Bivins worries is about to get busier: “Why would anyone think it’s a good idea to be dumping an additional 10,000 or 20,000 train riders a day into the Northwest Mall area? The dumping ground that could really use them, he says, is getting snubbed: “Where is the dream for a world-class train station in downtown Houston? It should have restaurants, retail, hotels, nearby residential – and connections to light rail, buses and commuter rail.” [Realty News Report, previously on Swamplot] Conceptual rendering of bullet train station on current Northwest Mall site: Texas Central

46 Comment

  • I have to agree. The Northwest Mall is NOT a good terminus for high speed rail. If they absolutely can’t get downtown, they should be trying to build the train station near IAH, so that there’s connectivity there.
    If it’s got to be at a dead mall, the Greenspoint Mall is an OK bet but even that is pretty far from IAH and would necessitate a tram or light rail line to connect the two.

  • Is there a 50 acre tract downtown where you can stick a train station and the necessary ROWs? (I think most blocks are 62,500sf) Glad they have the site UC, but until they are hard on money and start kicking out tenants, they are only probably risking a $100 option fee. The site was UC when HFF was marketing it too, but the deal didnt make, and they had fancy renderings too.

  • Why do real estate writers in this region have so little vision? What’s infeasible today may not be so tomorrow, and the station is clearly designed with that in mind.

  • Northwest Mall seems ideally located. It’s just outside the loop, there’s plenty of space for roads, parking and related services, and not many people are getting any use out of that land right now. We had a place for a train station downtown but we turned it into a ballpark, didn’t we? And the Amtrak station has a capacity of 30. Where do y’all envision building a downtown train station?

  • Memebag,

    “Where do y’all envision building a downtown train station?”….

    On Main Street, north of downtown. It was planned by METRO to be on the Red Line. It would connected future commuter rail and Amtrak with Downtown. The Houston Intermodal Transit Center was a sleek metallic blob built over the existing tracks.


    Wiki….always accurate


  • No matter your view on self driving cars, you have to admit that there is a chance that they replace trains (fully or partially). If that happens, having an under utilized station in a place other than downtown will be great.


  • when they catch the leprechaun that is going to fund this project, they should shake the little man extra hard to get extra money to move the location downtown. problem solved.

  • I understand TCR’s business rationale for going with the Northwest Mall Site, but if METRO’s response is that they want to connect it to light rail (which would cost upwards of $200 million per mile) then I think that METRO needs to consider just giving TCR that money as an enticement to build it all the way into downtown. Our regional public transportation system is strongly oriented to downtown and it’d be nice to be able to leverage so much of that existing infrastructure. And besides — light rail is an obsolete, highly wasteful, very slow technology, and I predict that we’ll be pulling up the tracks within another fifteen or twenty more years.
    @ Memebag: There are several sites which could accommodate the a station. The Amtrak/Post Office site, Hardy Yards, the municipal courts and HPD complex at Riesner (which the CoH is already considering selling off), and the METRO bus barn are all candidates. TXDoT’s reconstruction of the downtown loop also opens up opportunities near McKee Street and Jensen Street.

  • I couldn’t agree more. The train’s advantage is downtown to downtown.

  • 10-20K riders a day? Really?

  • This project has much less chance of success with the terminus at NW Mall. It’s very simple— a central location makes it more likely that people from all 4 quadrants will go there. If you live in Clear Lake, will you really drive to NW Mall , or just hop on 45? Plus no light rail connection or huge mass of office workers near by. Instead you have low rise flex space, HISD HQ, Awty school, and a Stadium. Also, you can’t get to it easily except through the back way along Post Oak. The site would be better for a corporate headquarters for something like McKesson. People are not leaving their cars to go from Plano to Pearland on a train, especially if they have to fight 610traffic.

    Plus, if you actually look at the people involved in the project , (not the employees like Aguilar and Tim Keith) but the New Magellan group and Jack Mathews—- yeah, they have no problem financially murdering scores of Texas landowners to install an overpriced, monopolistic , beyond obsolete fixed path system and make a buck—they sleep at night just fine.

  • The station exists to serve the total market for travelers to Dallas. The business travelers, who are most likely to ride to Dallas, work downtown… and the Galleria, Greenway Plaza, the Energy Corridor and West Belt, maybe some from the Med Center. The station at Northwest Mall would provides good proximity to all those employment centers, better than a Downtown station. The station at Northwest Mall also provides better proximity to those employment centers than either Hobby Airport or IAH. The station at Northwest mall also provides better proximity to where those business travelers probably live, which is mostly to the west, northwest and north of the station. It’s a really good location, considering all that.

    ZAW: Why would you build a bullet train from Dallas to IAH?

  • If you think a non-downtown location is less than ideal, your perception of Houston is stuck in the 1970s. Find a post-2010 map of the Houston region that shows population density and take a real good look. Believe it or not, the Northwest Mall location is centrally located to more people than downtown.

  • Having locations close to downtown that can accommodate the terminus isn’t the only consideration. As you get inside the loop, space for the rail to actually get there goes away. The amount of tax base that would be eliminated in the process of obtaining right of way to access it, plus the cost of that land and fighting individual owners in court, is probably what threw that idea out.
    Those who think that the people who will occupy the area near this station are those who would be bringing restaurants and retail have obviously never been to a train station in a large European city. Think our light rail stations multiplied by a hundred.

  • So the thinking is that the train customers will mostly drive or ride downtown before they go to Dallas? And that they won’t just drive or ride to the train station directly?
    Or is the thinking that downtown workers will get a wild hair to go to Dallas sometime after they’ve already arrived downtown?

  • Where in Downtown area do you envision a place to be for Central Station?
    There are many factors to consider and weigh in.
    If the current tram take passengers in from the terminus/station at Northwest Mall, then that can be a solution.

  • NW Mall is where the Anglo Arrow comes together. That’s TCR’s primary market, and a big part of the rationale.

  • Bullet train developers have the NW mall under contract? Well, I have the Williams Tower under contract as well. Now let me go find the money.

  • Anglo arrow seems to have a racist undertone for an appropriate colloquialism. Using another ethnicity or race in such a way would also be offensive. Could we have this post removed?

  • If Texas Central is really after affluent whites, they should remember that affluent whites (at least in Houston) don’t use public transportation, especially when they can spend less money by driving, or perhaps flying once the airlines start lowering their fares to compete with the “bullet” train. Airlines will have much more room to play on pricing due to their scale. It is shocking to believe that the principals of Texas Central have treated Texas (especially Houston) as their little economic colony and are getting away with it.. Our local politicians are either venal or are bedazzled by the 1962 wonder that is Japanese high speed rail. It reminds me so much of the stories about Bush era Republicans going to Iraq “to reconstruct” or “help” the Iraqis. Similar bunch of people here. We don’t need them. They are here to exploit the City and County economically. When they get their preferred return they will be gone (will happen if and when they get the Federal loans and Japanese loans).

  • Is there really that much of a market for travel between Houston, or one of its suburbs, and Dallas, or one of its suburbs? How much of the traffic on I-45 is actually Houston-Dallas or Dallas-Houston, versus having a terminus somewhere else between Houston and Dallas such as Huntsville, Corsicana, Centerville, Fairfield/Mexia/Waco, … If the expected result is to take cars off the road, then how many cars will be removed?

  • How does this fit with the bus lanes up and down Post Oak Blvd? Aren’t they building a Northwest Transit Center in basically the same place?

  • @googlemaster. There are 19 flights daily on Southwest Airlines alone between Houston and Dallas. Clearly their are a large number of people making that trip by plane, car or bus.

  • As far as ridership goes, TCR is way out of line.

    They say 7.2 million riders a year, or 20% + of the market share. The Acela in the Northeast has 3.4 million riders a year, or a 7.2% market share.

    TxDOT predicts between 700,000 and 2.7 million and the Reason Foundation predicts 1.4 million.

  • @JT, but again, given that Southwest flights from places east and southeast of Houston to places north or west of Dallas involve multiple legs, one of which is the HOU-DAL leg, what percentage of the HOU-DAL air passengers are actually traveling only from Houston, only to Dallas (or the reverse)? If their itinerary currently involves a flight from, say, Miami to Houston to Dallas to Las Vegas to Oakland, then they’re not going to leave the airport at Houston to take a train to Dallas only to get back on a plane.
    In order for a bullet train from Houston to Dallas to grab the air and/or car passengers, those air and/or car passengers have got to be going exactly between Houston and Dallas, with no extra legs on either end, and no cutting the trip short in the middle.

  • GoogleMaster, exactly!
    To put TC’s totally overexaggerated ridership per year in perspective: it would take TC 20 years to reach the number of riders per year (143,015,000 – Wikipedia) on the Tokaido Shinkansen line at 7.2 million riders
    OR it would take the Tokaido Shinkansen 18 days to get to 7.2 million riders. Would the Tokaido line (one of only 2 or 3 lines that make a profit) make money if it only ran 18 days per year?
    Even though the exaggerated ridership sounds like a lot, it’s still not.

  • The Reason Foundation’s study was done incompetently. Here is the how and why:
    Their ridership projections rely upon only a 5% diversion rate from car trips. If they had used a 6% assumption, their ridership estimate would increase by 8%. That is a very very sensitive little variable. And where did they get car trips? TXDoT traffic maps. That gives them a vehicle count, but it does not give them a passenger count or even reflect whether a given vehicle at a given point along I-45 has origin/destination pairs that are both the Houston and Dallas areas. I don’t know where they’re getting their passenger count, or if they even bothered to make the effort.
    They don’t provide adequate justification for their estimates of operating costs (which come in at $0.65 per passenger mile, much higher than even publicly-owned HSR systems in France and Germany and orders of magnitude higher than what California is projecting for their system), those costs are portrayed as an average for forty years (meaning that repair and maintenance in year 0 is portrayed as equal to year 40), and their calculation of 5% simple interest on a 40-year bond is mathematically erroneous. They determined total interest costs for 40 years by multiplying the initial capital costs by 0.05, and estimated $890 million instead of $35.6 billion. Major, major oversight. Amateurish!
    Their concluding remarks are full of loose speculation and hypotheticals that, if the same logic were applied to other parts of the private sector, would amount to Reason Foundation, a libertarian think tank, demanding that private investment be disallowed because it might fail and might be bailed out by government. This is absurd. Should the United States disallow the construction of new wind farms and solar plants and automotive manufacturing plants because the companies that own them might go bankrupt and lobby for a bailout? No.
    I think that there are legitimate questions regarding whether the project is worthy of private investment, but that the only public concern should be regarding whether its operating costs will exceed its operating revenues and whether there would be public costs associated with abandonment of the project if that were ever to happen. Texas should cover its bases, of course, but stay out of the way of private investment.

  • If the station were downtown, the railway would have to cut through multiple historic districts. This was the reason, purportedly, TCR determined (quite some time ago) that a downtown location would be unfeasible. The Northwest Mall location is equally accessible to business travelers based in Downtown, the Galleria, or the Energy Corridor. Many of these same business travelers live in the west side of town, so the station might also be accessible from their homes. Light Rail connection to Downtown is a non-issue – people will take Uber/bus/rideshare to get to their ultimate destination quickly, and maybe one day in driverless cars that are even cheaper. There is plenty of space to meet parking demands and for further development. It will be a boon to a somewhat blighted area and allow people to easily jump on 290, I-10, or the Loop to get to where they need to go. As appealing as a downtown station sounds, I think they are making the right choice in the long run.

  • Niche – love to hear your analysis of TC’s ridership study.

  • Maybe some big-time lawyer can get involved so we can get Kelo v New London overturned.

  • Niche, Reason absolutely does account for passengers, it’s in the report.
    Furthermore, using a 0% interest rate, the report says the project will lose over $500 million a year.
    Adding 8% to 1.4 million gives you 1.512 million, not the 7.2 million TC states.

  • Niche, there is a 12 page summary and a 65 page report. This might account for any confusion.
    I don’t think that Texans should lose their land for a highly speculative project. That is the major public concern for me. Hopefully TC will not get eminent domain.

  • @ Jules: Would you please link to the 65-page report. My googling only turns up the 12-page version. Many thanks.

  • Sure! It’s not you, it’s them. :)
    Click the link: https://reason.org/issue_brief/texas-high-speed-rail-requires-caution/
    Then scroll down to this sentence: “A detailed analysis of the project is available here.” and click the word “here”
    Don’t forget to read this on the way: “We truly hope that high-speed rail becomes a reality in the United States, and we would prefer that it be developed and implemented by the private sector. However, based on our experience and analysis we are concerned that Texas Central’s project will fail so spectacularly that privately financed U.S. high-speed rail lines may never be given a second chance.”

  • @ Jules: Thanks. I went to that same page, but clicked on the “attachment” instead of the “link”. Oops. Oh well.
    The lengthier version does provide a framework for some of the issues I brought up about passenger vehicles, but frustratingly, it doesn’t provide much of an explanation for the assumptions that were actually used. About operating and maintenance costs, they provided a table, stated that the data was consistent despite it not being very consistent (or comprehensive) at all, and they failed to credibly apply that data to TCR’s plans. Table 18 references a 311-mile project for some reason, but the one-paragraph explanation at the bottom of page 46 of how Table 18 applies to the TCR proposal says that Table 18 describes a 240-mile project. This appears to be another mathematical error. The units in Table 18 are described as “units”! It is not particularly clear whether the units are a measurement of distance. Energy costs are a major factor in operating costs, and energy costs in Europe and Japan are notoriously high — and they knew that and pointed it out as a factor affecting ridership potentials, but did not adjust for that where costs are concerned. I think that similar concerns could be raised regarding European and Japanese geography as they relate to maintenance costs: there shalt not be any tunnels or earthquakes or tsunamis or especially frequent hard freezes or blizzads in Texas. There shalt not be any short-line HSR. There probably are more favorable labor laws and there probably is a more favorable regulatory environment, generally speaking.
    The efforts made at quantifying revenue were inadequate. There is a major major major difference between air and rail travel in that rail is far more capital intensive with capital and fixed costs representing the vast majority of all costs. With air, variable costs are a big deal. What that means is that it is not a very big deal to add additional rolling stock to scale with demand, and that pricing structures are likely to vary a great deal. You should fully expect that TCR will offer some kind of commuter pass for frequent travelers. The way that they bid out tickets for any given departure is likely to be a lot different from air travel. That is the case in Europe and Japan. It is curious that the author of this study took inspiration from those places when it suits him, but not when it is inconvenient. I acknowledge that TCR hasn’t been entirely open about its revenue model either, but it is a for-profit enterprise and there is good reason for it not to want to completely divulge trade secrets. A think tank needs to be able to infer that and anticipate what will actually happen instead of taking them at their word…but they only do so selectively, and that compromises the integrity of their entire effort.
    Also, the 5% simple interest error…that is still present. It is not explained. It is absurd. It is wrong.
    Let me just say Jules, I really appreciate that you’re approaching this in a cerebral way. I wish that more people were capable of that. I am happy to disagree with you and for you to disagree with me if it is intellectually honest, and I think that it is. Thank you for that.

  • Northwest mall is a great location for the HSR station! There’s better road access to the area than downtown, and MUCH easier to get in and out of… Also it’s much better located to the area’s population center which is more west-northwest of downtown anyway. The notion that someone from Clear Lake would find it easier to drive to Dallas on I-45 rather than use the HSR because the station was too far away from downtown is ludicrous, the interchange of I-45 with the north loop is only a few miles east of the station, but it would be more convenient to drive the 4 plus hours on to Dallas than take a 10 minute detour to get to the station?
    And why on earth would the HSR connect to the airport? The rail will connect two cities with just one stop in between. We are to believe people will want to take a 90 minute train ride from Dallas to Houston and then connect to a flight at IAH off to somewhere else, instead of flying there from Dallas to begin with?

  • Here’s TC’s response to the Reason report: (Spoiler alert: TC requires an NDA to view their data)
    “The report’s author did not respond to our offer to review the very “verifiable, objective data” that his review claims we have not yet provided. That our many calls, emails and voicemails on this matter were left unacknowledged and unreturned signals a willful disinterest by the author to produce a truly comprehensive analysis. ” https://www.texascentral.com/rumors-vs-reality/the-reason-foundation/
    Sounds bad, right?
    BUT here is Mr. Feigenbaum’s response:
    “Texas Central’s second claim is that I was offered full access to its data about the project. I wish this were completely true. Unfortunately, Texas Central said it would only provide access to the data if I signed a non-disclosure form. I would not have been able to write a policy brief based on data that I was prevented from publicly disclosing. I told Texas Central multiple times that a non-disclosure form did not work for an independent researcher, yet they kept insisting on the non-disclosure agreement. As a result, I used the multitude of published data, including some information Texas Central revealed on its website and in lawsuits.” https://reason.org/commentary/texas-high-speed-rail-promises-collapse-under-scrutiny/
    Typical of how TC operates.

  • It looks like Feigenbaum used the entire table(s) from the quoted source that has the 311 miles in it. Agree “Units” in table header is meaningless. Here’s where he does the math to convert to 240 miles:
    “However, we are going to give Texas Central the benefit of the doubt and use the midpoint of $20.8 billion for a 311-mile line. This equates to $16.1 billion for Texas Central’s 240-mile line, or $67.1 million per mile.” p 46 of the Texas High Speed Rail: Caution Ahead report.

  • Niche, I see what you are saying about the 5% simple interest rate error. But doesn’t that just mean that Texas Central will lose more money faster? Like $1.4 billion a year instead of “only” $537.2 million a year?

  • @ Jules: You’re absolutely right. Their 5% simple interest error lends support to TCR. The report’s errors and omissions cut both ways and signal sloppiness, but not necessarily that they were being disingenuous.
    The problems with the NDA make a degree of sense, unfortunately. The nature of this project is that it is subject to political risk and litigation and that details which are germane to some relevant aspect of this study could have been used against TCR in a different venue and in ways that are beyond their control. That some of the assumptions for this study were gleaned from court filings is indicative of that. There can be little doubt that TCR wants to control what is circulating around out there — and they are a private entity, so that is their purview. While I know that that is frustrating, I also can’t fathom TCR’s attorneys supporting unrestricted access by an independent researcher to any information which answers questions that haven’t yet necessitated an official response. I’m not rendering a moral judgement about this, just saying that it is totally expected.
    Their communication has been crappy. TCR could have made constructive suggestions that pointed the researcher in a general direction, they could have pushed for caveats or disclaimers that left them even a little bit of breathing room, and probably a great deal more that would’ve made this study appear less completely damning. OTOH, the appearance of cooperation may also have seemed to validate findings that TCR knew were going to be negative without access to detailed internal plans. And if waiving the NDA was indeed totally off the table, which is reasonable to assume, then the next best strategy may have been to oppose the study vociferously at every opportunity, forcing researchers to reach further for their assumptions and to stretch their resources thinner to develop and support them, and then to lambast the effort for weaknesses which were all but inevitable. Or… Or… Or…people involved were just being lazy, incompetent. belligerent, or whatever else it is that human beings do. That is always a possibility, and it manifests in the most chaotic and unexpected ways. The fact is that there is a huge range of possibilities as to how damage control is being handled. It probably isn’t productive to speculate.

  • Niche, the DEIS uses TCR’s secret documents as a basis for ridership. This is not open government. The FRA could have chosen several different public documents, such as Reason’s for ridership numbers. Why did they chose a secret report instead? Especially since the secret report is such an outlier, with 7.2 million riders per year, compared to Reason’s 1.4 million and TxDOTs 700,000 to 2.7 million.
    The ridership numbers are not unimportant as they inform such things as vehicles taken off the road which informs emissions calculations. Using TCR’s secret documents, the DEIS says 14,630 cars per day will be taken off the road. Also, they use a passenger rate of 1.2 to get to the 14,630. How do we know that the secret ridership used 1.2? They could have used 1.8 as Reason did and then inadvertently increased the number of cars by 50%..
    My math, using Reason’s numbers show only 815 cars per day taken off the road. That’s a big difference. The emissions removed could inform many people’s opinion of the HSR.
    Another place they use ridership from the secret report is calculating sales tax revenue. The DEIS states $10 million a year for Houston and Dallas. This could easily influence both the public and public officials.
    As an aside, TC is saying the $199 average fare is a “rumor” (implying it will be lower but not saying) used to calculate the sales tax revenue while simultaneously promoting the sales tax revenue of $10 million for Dallas. Having and eating cake.
    The DEIS cannot use a secret report as it’s basis for ridership. if TC wants to keep it’s ridership secret, that’s fine, but the DEIS must use another source for ridership.

  • The DEIS repeatedly referenced a pending ridership study, so hopefully that’ll be in the FEIS. It couldn’t have referenced the Reason Foundation’s report because that report came out after the DEIS.
    The most telling data I saw in the DEIS was a footnote that TCR in 2043 would “account for 21% of the public market share between Dallas and Houston [and that] it would derive from a 16% decrease in vehicular traffic market share and a 6% decrease in air travel market share.” That level of vehicular substitution doesn’t sound reasonable in the near term, but in 2043 — if driverless ridesharing/ridepooling is a mature technology at that point and TCR is able to scale up to demand (which high-fixed/low-variable costs are a benefit of rail over air in that case), actually, those assumptions seem entirely plausible and perhaps quite low (presuming that overall Houston-Dallas trip demand assumptions weren’t totally wacky).
    To reiterate my initial point (and then I’m going to call this one quits because I need to get on with my life), I’m perfectly content with this thing getting built and then going bankrupt and having it revealed that some wealthy investors have pissed away $20-billion-ish dollars into the Texas economy. It’d be great if it is able to keep operating under new ownership after that, but I can’t think of any good reason for the state government to kill the project because it might rain down money upon us and then fail and be abandoned. And the Reason Foundation’s bottom line that it would be scary for future investors in private high speed rail ventures…well, if it’s going to be the equivalent of the private sector’s fabled ‘Bridge to Nowhere’ and have a chilling effect on that sort of project, then I’d rather it be our ‘Bridge to Nowhere’ rather than not. Let it be our waste, and some future HSR investor’s datapoint that they can use to make a reasoned decision on their own personal and private behalf.

  • Wrong. The DEIS came out in December of last year, the Reason report in February of last year.

  • Ah, yes, that is correct. The Reason report came out in February 2017, not February 2018.

  • Niche, thank for the debate. Much appreciated.