Amtrak, Metra hit impasse on new Union Station deal

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Sean N
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Amtrak, Metra hit impasse on new Union Station deal

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From Crain's Chicago:

Negotiations have broken off between Amtrak and Metra for a new lease governing the suburban rail agency's use of Chicago Union Station casting a deep shadow on future operations of a rail terminal that serves more than 140,000 passengers a day.
In what amounts to a lawsuit, Amtrak, which owns Union Station, this week formally asked the U.S. Surface Transportation Board to impose new lease terms on Metra. The current contract between the two agencies expires next week, on July 29, and in its petition Amtrak said the parties “have reached an impasse” on a new deal.
Amtrak wants to hike by several million dollars the current rent of $9.66 million a year and wants a firm commitment by Metra to contribute capital to upgrade facilities, according to a source close to the matter. Metra wants to cut its rent to less than $7 million a year and seeks control or even ownership of the station before deciding on capital, that source adds.
Amtrak spokesman Marc Magliari says that while the legal issues are pending, Metra will be able to continue normal operations at the station, which serves as a terminal for six of Metra’s 11 routes. “We’re continuing to operate and to welcome all customers,” Magliari said.

But at a minimum, the dispute threatens to stall progress on much-needed modernization of the nearly century-old facility, which never was designed for such crowded commuter service. And like any jostling between big economic powers—think of what happens between your cable TV company and a content provider when a financial dispute breaks out—third parties sometimes get caught in the middle.
Metra had no immediate response to a request for comment.

Relations between Metra and Amtrak have been going downhill for years, with the two financially challenged transportation agencies each seeking leverage over the other.
For instance, in 2016, Metra's CEO at the time, Don Orseno, wrote then-new Amtrak President Charles Moorman asking him to improve a Union Station relationship that “has not been the cooperating operating partnership that would benefit both parties. " Clearly that has not happened.
In its Surface Transportation Board petition, Amtrak says it merely is asking Metra to pay its own costs and shoulder its proportionate share of station overhead, but legally cannot use its resources to subsidize Metra.
The two have exchanged offers, but “are unable to agree,” the petition states. “Despite protracted negotiations ongoing for more than a year, the parties cannot come to agreement. . . .Having now reached an impasse, board involvement is appropriate.”
The Surface Transportation Board has national jurisdiction over the railroad industry and in this situation may be able to impose a new contract. The agency’s board, ironically, includes Chicagoan Marty Oberman, a Chicagoan and former Metra board chair who may have to recuse himself.
A July 22 letter to Metra Deputy Executive Director John Milano from Amtrak Assistant Vice President Thomas Moritz elaborated a little, referring to “a significant, material gap between our respective views of ‘fair share’ arising from methodological and philosophical differences between us.”

The letter does express a hope that the parties will return to the bargaining table, but adds, “Metra, with over 90 percent of the passengers and 77 percent of all trains at Chicago Union Station, cannot simply pick specific areas or cost categories it feels are in line with its commuter-specific needs.”
Metra’s offer on capital has improved, but “more significant gaps” exist in other area, including operating expenses, policing, liability and overall capital investment, it says.
Ironically, the dispute arises as both agencies are relatively flush. Metra is expected to get hundreds of millions of dollars from the new state capital bill that Gov. J.B. Pritzker recently signed into law, and Amtrak has begun to get involvement from private real-estate developments on property it owns in and near the station.
2:30 p.m. update: It looks like the Surface Transportation Board indeed will have the final word on a new lease.
In a statement, Metra says, “We agree that requesting the involvement of the STB at this juncture is appropriate and we look forward to making our case there." It added only that, “Metra is seeking the best deal for its customers and the taxpayers of northeastern Illinois.”

5 p.m. update: Oberman, the former alderman of Chicago's 43rd Ward, tells me he has chosen to recuse himself from considering Amtrak's petition. "The issues involved in the petition are issues I dealt with as (Metra) chairman," he said.
With Oberman out and two vacancies on the five-person board, that mean the final ruling will come from the two remaining board members—Ann Begeman and Patrick Fuchs, both Republicans—unless the vacancies get filled pronto.
Sean

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