Saturday, November 6, 2010

California High Speed Rail to Break Ground in Central Valley in 2011 and Eventually Tracking a Path to Palmdale, Ca. But, Is It a Train to Nowhere?

The Federal Government seems to be forcing the hand of The California High Speed Rail Authority. Recently, the Feds provided $715 million toward the rail system. The CalHighSpeed Rail Authority press release this week stated that the Federal Railroad Administration forwarded their requirement that the full amount of the $4.3 billion be allocated to infrastructure investment for the proposed system in California’s Central Valley. These funds have to be directed to the rail lines from Merced to Fresno or Fresno to Bakersfield. These funds were part of the American Recovery and Reinvestment Act, and California has received more funds of this type then any other State.

We wonder if this is choreographed or a knee jerk political reaction by the Obama Administration to reward California for staying in the Democrats Camp. GOP elected Rep. Mica trashed the idea of having the federal government continuing to fund a Tampa to Orlando high speed rail line, as he spoke to the Associated Press this week “I am a strong advocate of high-speed rail, but it has to be where it makes sense,” Mica said. “The administration squandered the money, giving it to dozens and dozens of projects that were marginal at best to spend on slow-speed trains to nowhere. The Republicans and the Obama Administration differ in how to pay for fast trains as a Republican Congress wants the rail transportation system to be self supporting, but the Obama Administration expects states like Ohio and Wisconsin to absorb operating losses for their rail systems. California lacks the funds to absorb losses. The newly elected Governor of Ohio John Kasich said via news reports that “the train is dead” He was referring to the Ohio slow passenger train from Cincinnati, Columbus and Cleveland. Also, The Wisconsin Republican Governor Elect Scott Walker promised to cancel the Wisconsin High Speed rail (Milwaukee to Madison). BizTimes Daily reported this week that the Wisconsin Dept. of Transportation told contractors to halt work on the $810 million project.

The California High-Speed Rail Authority CEO Roelof van Ark said in their press release
“The Central Valley is indeed key to creating the core of a true high-speed rail system in California, as that is where our trains will travel truly high speeds of 220 miles per hour,” van Ark said. “But no matter where we start building, the goal remains the same: a statewide high-speed rail system up and running in 2020 connecting the Bay Area with the metropolitan area of Los Angeles and Anaheim, that creates thousands of jobs, improves air quality, and provides us all with a cheaper, faster and more convenient way to travel.”

The Mercury News indicated that the agency says it could build just half of the 50-mile track from San Francisco to San Jose section with the funds available while they can build the entire 60 miles Merced to Fresno corridor or 113-mile Fresno to Bakersfield span. In Southern California, the authority thinks it could build two thirds of the 30 mile stretch. "We have to build a system that is going to be operable as soon as possible and that means building many miles of track that are connected to each other," van Ark said.
But a Central Valley segment will have no operational significance van Ark said major population centers need to be linked and the agency will not bother starting service there.
"We will not have trains when we build this first segment," he said. CalHighSpeedRail Authority release also indicated that they will discuss target constructions locations and other business in their next meeting in December.

We have tempered our celebration since at first glance this would be a track to nowhere, with only rails, bridges, with empty stations, and no train or passengers. This is not a proposal that a Republican influenced Congress would approve as it will not pay for itself. Would Governor Elect Brown call this living within our means? Would the Chinese Banks cover the additional funds needed?

A possible land investment opportunity could be buying land ahead of the rails especially near Fresno, Ca. as that city is certain to be on the trains map. We will keep track of this news and events as it progresses.

Monday, November 1, 2010

California Lands the Worlds Largest Solar Project in Ivanpah, San Bernardino County

Ground is to be broken for a massive solar thermal plant in California’s Mojave Desert this week. It is called the Ivanpah Solar Electric Generating System. The Estimated cost is two billion and the first to be built on Federal Land (Bureau of Land Management). It has passed a number of environmental hurdles, but it does impose on the desert tortoise habitat. The company operating the system BrightSource Energy indicated via press reports that they will assist in the relocation of the tortoise.
This project is truly massive as it encompasses about 3,600 acres (about 1,458 hectares) and it will involve 346,000 mirrors, each about the size of a billboard. The mirrors project the suns rays toward a 460 foot tower. The heat turns the fluid in the tower into steam which generates electricity. Construction begins next week and it is expected to be completed by 2013 according to the Los Angeles Times. It should produce 370 megawatts which can supply 140,000 homes with the energy being furnished to Southern California Edison and PG&E. There is actually a rush to begin this project and several other solar projects by the end of 2010 as a federal financing program will cover up to 30 percent of the construction cost, but it must begin by the end of the year news reports indicated. According to BrightSource Energy’s website there will be additional new financing from NRG Energy of $300 million which secures NRG as the largest ownership stake in the project. Both companies with Bechtel Corp will work together on construction, equity, ownership and operation.

Ivanpah is approximately fifty miles northwest of Needles, Ca and five miles west of the Nevada border in San Bernardino County. It is just off Hwy 15 and 164. There will be approximately one thousand construction workers on the project, which will be set to begin this winter season, as summer temperatures in Ivanpah can be 110 degrees on average.
There isn’t a town in the area as this location is just open desert land with the only current signs of civilization being a rail road and highway. The opportunity in the immediate future maybe to build a general store to supply the new workers as there isn’t any real development in this area now.

Today Southern California’s Mojave Desert has two of the world’s largest Green Energy projects with the Mega Wind project (Alta Wind Energy Center) in Tehachapi and now Ivanpah. Both of these locations were vacant unused and undeveloped land parcels, so the opportunities for land investors are in this Antelope Valley region. Profitable land investment opportunities are growing in this area and we will continue to inform you here as projections progress.