Feds gave millions to buy land for Triangle commuter rail. Now they want the money back

By Richard Stradling | The News & Observer

RALEIGH, N.C. — Twenty years ago, the federal government gave the Triangle Transit Authority millions of dollars to help buy property along a railroad line in Raleigh. The land, more than 50 acres spread along nearly seven miles of railroad tracks, was to be used for a proposed commuter rail line.

But the commuter rail system was never built, and now the feds want their money back.

It’s not that simple.

The N.C. Department of Transportation owns a small stake in the property and would like to keep all 50 acres. The land parallels the railroad tracks where NCDOT is working to develop a high-speed train line between Raleigh and Richmond, including places where it plans to build bridges to eliminate street crossings.

But NCDOT must come up with the money to buy out the federal government and GoTriangle, the TTA’s successor agency, which together own the majority of the property.

The TTA bought the property from CSX in 2003 for $24.5 million. The Federal Transit Administration put up 55.7% of the money as part of its support for a planned commuter rail project that would link North Raleigh with downtown Raleigh, Cary, Research Triangle Park and Durham.

But that project fell apart in 2006, after it became clear that it wouldn’t qualify for federal funding for construction. The TTA and its successor, GoTriangle, asked to hang onto the property, in hopes it would be used for a future transit project.

But that doesn’t look likely. GoTriangle’s latest commuter rail proposal would run trains from Durham to Garner or Clayton but wouldn’t use the corridor into North Raleigh.

Still, GoTriangle and NCDOT hoped to keep the property, as the state began planning high-speed trains to Richmond and beyond on the so-called S-line. NCDOT received a $47.5 million federal grant in September 2020 to buy the CSX rail corridor from Raleigh to near the Virginia state line and another $57.9 million in federal money last year for preliminary engineering work.

GoTriangle and NCDOT sent a letter to the FTA in April 2021 asking if they could keep the property the TTA bought in 2003. In addition to high-speed rail, GoTriangle said there was still a possibility that the corridor could be part of a commuter rail system someday.

The FTA responded a month ago, saying with no local transit project in the works GoTriangle needs to sell the property and return the federal government’s share, says Charles Lattuca, president and CEO of GoTriangle.

“We’ve begged off on repayment several times over the past 20 years,” Lattuca said. “Basically they sent us a letter saying that time’s up. You’ve got to reimburse us for that federal interest.”

Next step: Determine what the property is worth

Just how much the FTA is owed isn’t clear yet. GoTriangle had the property appraised in 2019 for $27.2 million, but that assessment is out of date. GoTriangle and NCDOT will each have new appraisals done and submit the results to the FTA, said Gary Tober, GoTriangle’s director of real estate and facilities.

The FTA will be entitled to 55.7% of whatever value the three owners agree on, while GoTriangle’s share will be 30.7%. NCDOT has 13.6% interest in the property and would acquire the rest.

NCDOT doesn’t expect to buy out GoTriangle and FTA all at once or from one source of money, according to a statement from the department’s rail division. NCDOT is putting together a proposal that would reimburse the two agencies over time, using other federal and state money as the S-line project unfolds in the coming years.

The TTA purchased 51.69 acres from CSX in 2003, following the rail corridor from downtown Raleigh to near where it passes under Old Wake Forest Road.

GoTriangle has 50.64 acres left. In 2021, it sold 1.05 acres to the developers of the Seaboard Station apartment and retail complex for $1.12 million. Tober said it sent the FTA its 55.7% share, which came to $623,840.

GoTriangle is also negotiating with a potential buyer of a building on Lane Street downtown that it hopes will sell for $10 million. TTA bought that nearly 1-acre lot in 2005, thinking it would be a good place for a commuter rail station near the State Government Complex.

Whenever that lot sells, 55.7% of the proceeds will go back to the Federal Transit Administration.

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