Monday, October 30, 2006


Great idea -- commuter rail in Michigan

* Passenger rail idea has a powerful advocate Railroad owner backs mayor
on concept Ann Arbor News By John Mulcahy
Louis Ferris joins up with Ann Arbor Mayor John Hieftje and other
proponents of a commuter rail service between Ann Arbor and Livingston
County and perhaps other points north.

Passenger rail idea has a powerful advocate Railroad owner backs mayor
on concept
Sunday, October 29, 2006

News Staff Reporter

Louis Ferris - salesman, entrepreneur, financier and now railroad owner
- believes a lot in creativity.

That will be a key element as Ferris joins up with Ann Arbor Mayor John
Hieftje and other proponents of a commuter rail service between Ann
Arbor and Livingston County and perhaps other points north.

In March, Ferris bought the Tuscola Saginaw Bay Railway and renamed it
the Great Lakes Central Railroad. Operating on tracks that run north
from Ann Arbor, through Howell and all the way to Traverse City, the
line hauls cherries, logs, sand, rock and tons of grain.

But a major goal for Ferris is offering passenger service.

"As I would see it in my lifetime, for this generation, the ultimate
goal is to bring passenger rail successfully to the state of Michigan
... between Ann Arbor and the northwest cities, and that includes
commuter rail,'' Ferris said.

Hieftje, who has long advocated some kind of rail service from
Livingston County as an alternative to expanding US-23 to ease traffic
congestion, contacted Ferris this spring.

"When we heard that Great Lakes Railroad had bought the rights to the
line and that they were interested in commuter rail, we were thrilled,''
Hieftje said. "We thought it was a piece of providence that had fallen
into our laps.''

Both Ferris and Hieftje will face formidable challenges making the
commuter rail dream come true. While the estimated $27 million needed to
start the service is small by railroad startup standards, the tracks and
signals along the aging route will have to be improved, stations will
have to be built and some form of operating subsidy will almost
certainly have to be found.

Having Ferris on his side has lent some credibility to Hieftje's claim
that the commuter service, or some portion of it, can be up and running
in three years.

"Great Lakes Central Railroad is certainly a huge component if we're
going to achieve commuter rail from Ann Arbor to Howell,'' Hieftje said.

A track record of success

There can be little doubt that Ferris is a can-do kind of guy. He lives
on a 100-acre estate in Superior Township in a 20,000-square-foot house
that could be mistaken for a Frank Lloyd Wright design. After starting
out as a salesman, in 1974 he founded what grew over the years into
Federated Financial Corp. of America. The company finances industrial,
manufacturing and transportation equipment, buys large amounts of
commercial debt at discounts and collects on it, installs technology in
national-chain retail outlets and invests money in other businesses.

Ferris has helped finance, or has had an interest in, businesses as
divergent and far-flung as a restaurant in Ann Arbor, cellular phone
leasing and sales, and a company in Europe that rebuilds automatic
transmissions. More recently, he bought what is now Bella Vino
Marketplace on Plymouth Road in Ann Arbor, which he supplies with
mutton, blueberries, vegetables and honey produced on his estate.

Ferris grew up near downtown Detroit. His father was a skilled tradesman
at the General Motors Willow Run plant, his mother a homemaker. Early in
life, he said, he wondered about the difference between those who drove
large cars and wore suits to work, and everybody else.

"I realized there wasn't any difference between people,'' he said.

With that in mind, Ferris set out to achieve some goals. From being a
top shoe salesman at 15, he graduated to selling electronic protection,
background music, computer time shares and other products. He became a
salesman in several industries and by age 31 was constructing his own
building at Northwestern Highway and 13 Mile Road, where Federated
Financial Corp. of America still is based.

His company has leased and lent out more than $2 billion over its
history, he said.

"I'm really in the wholesale-retail business,'' he said. "I buy money
wholesale and I lend it out retail, and I take the risk.''

Ferris has been able to see opportunity where others haven't. For
instance, in the early days of cellular phones, when many people found
they couldn't pay the monthly charges, Ferris worked out a deal with the
cellular phone companies that allowed him to lease phones, collect those
in default and resell them. At one point, he says he had an inventory of
1 million phones.

But can a man who made his money in sales, leasing and financial
services successfully operate at passenger rail line?

"It's all about creativity,'' Ferris said during an interview at his
home in front of a fireplace looking out on a pond and fountain. "Yes,
goals have a lot to do with it. But creativity is more how an idea is

With creativity, up in

3 years

Though it may take a good deal of creativity, at least some rail service
between Ann Arbor and Livingston County could be up and running in as
little as three years, said Eli Cooper, transportation program manager
for the city of Ann Arbor.

For instance, with a park-and-ride lot and a boarding platform at an old
industrial site where the Great Lakes track crosses Eight Mile Road,
another boarding platform at Barton Drive and Plymouth Road in Ann
Arbor, and some buses to meet the train, a portion of the proposed
commuter line could be up and running in a relatively short time and
with relatively little cost, Cooper said.

Rather than go through the time-consuming process needed to get federal
short-line start-up funds, the city could more quickly seek the needed
money piecemeal from a variety of federal and state programs - including
federal pollution mitigation funds, some federal surface transportation
funds and some state transportation funds that come to the city to be
used for pedestrian improvements, to name some examples, Cooper said.

He said he also believes the private sector may be willing to invest.
One idea: What if the boarding platform and park-and-ride lot at Eight
Mile Road was part of some mixed commercial and residential development
on that land?

"I'm not sitting here saying that these are highly likely funding
sources,'' Cooper said. However, there is some advantage in getting
something up and running sooner rather later for people who frequently
get stuck in the congestion on US-23 on their way to work, he said.

Ultimately, there will have to be some kind of operating subsidy for the
rail service, since no public transport anywhere in the country operates
just on revenue from the fare box, Cooper said. That, also, might be
some combination of public and private money. The city, or whatever
entity was chosen to be in charge of the service, would negotiate a deal
with Great Lakes Central Railroad to operate the service, he said.

State's timetable slower

Cooper and Hieftje have some support for their view that some level of
commuter service can be up and running in a relatively short time.

"I think it's going to depend a great deal on whether MDOT steps up to
the plate and gets serious about rail in the state,'' said Terri
Blackmore, executive director of the Washtenaw Area Transportation

In August, the Michigan

Department of Transportation announced a $500,000 study of the US-23
corridor that will

include the existing rail line as a possible way to improve
transportation along the corridor. Another much-talked-about option
would add a bus or high-occupancy-vehicle-only lane in each direction.

In either case, the study will take 18 months and will provide only the
initial steps of the full-blown environmental impact statement that
would be necessary before the state could even seek federal construction
funds for widening the highway, improving the tracks or any other
proposed improvements.

Backers of the commuter rail idea want to avoid that excruciatingly slow

Ronald DeCook, director of MDOT's Office of Governmental Affairs, said
Ann Arbor will not be able to get federal rail startup funds without the
environmental impact statement, but that doesn't preclude city officials
from trying some other means to get a rail service running.

"If they've got a plan for it, that's fine,'' DeCook said. "I applaud
the mayor.''

Hieftje said he wants to see rail tried before improvements to US-23. He
compares the projected $500 million cost of adding a third lane in each
direction to the highway between Ann Arbor and Brighton with the
estimated $27 million for the rail project.

"Why would we spend $500 million expanding US-23 before we see what we
can do for $27 million?'' he asks.

For his part, Ferris is convinced that passenger rail service has a
great future in the United States.

"Somebody is going to have to make this model work, because it works in
Europe, it works everywhere in the world, it's working in the United
States,'' Ferris said.

Ferris, who bought 52 double-decker, stainless steel railroad cars even
before he bought the railroad, believes he can draw on the technology,
people and equipment he already has to make rail passenger service a

"I bought the railroad because I want to do passenger rail,'' Ferris
said. "If you believe in the goals you set for yourself, you can achieve
them. I really believe that.''

John Mulcahy can be reached at or

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