IN 2004, Superior Twp. resident Louis P. Ferris, Jr., purchased dozens of double-decker, stainless-steel passenger rail cars. According to an article published on Feb. 10, 2015 in the Detroit Free Press, “Metra, which operates the Chicago transit system, a Metra-related suburban rail service sold the 23 cars — plus 26 similar cars to a company affiliated with Great Lakes Railroad for $5.6 million. Each coach car cost the railroad about $101,000 and each cab car cost about $125,000.”
In June 2006, Ann Arbor Mayor John Hieftje introduced his “Model for Mobility,” a transportation vision for the City of Ann Arbor. A key element of this transportation vision included a commuter rail system.
A few months later, in August 2006, Ferris and Hiefje told Crain’s Detroit Business, “The short-term plan is to have the commuter rail route extend to Howell within three years. The 10 stainless-steel cars devoted to commuter service will have wireless Internet, beverages, light snacks and newspapers. It’s going to be a nice ride for them. You don’t have to worry about the traffic on U.S. 23.”
In 2006, Ferris and Hieftje began granting public interviews in support of commuter rail service between Washtenaw and Livingston Counties. The service, nicknamed the WALLY, was supposed to stop somewhere near Plymouth Rd. in Ann Arbor. Hieftje and Ferris were quoted in The Michigan Daily in Aug. 2006 as arguing a $27-million investment in getting the WALLY up and running would be “far less terrifying than the $500 million required to add a third lane to the local stretch of US-23.”
In June 2008, R.L. Banks & Associates, Inc., (RLBA) was selected to perform a technical review of an early version of the WALLY Draft Business Plan and other information related to initiation of commuter rail service connecting Howell and Ann Arbor. In that study, the consultants projected $2 million as the total cost for MDOT leasing rail cars.
By a resolution passed on October 28, 2008 at the urging of local officials including John Hieftje and the then-chair of the Washtenaw County Board of Commissioners, Jeff Irwin, the Ann Arbor Transportation Authority (AATA) became the authority in charge of the WALLY.
In a 2008 article published in the Traverse City Record-Eagle, reporter Art Bukoski published this:
About 16 cars owned by Owosso-based Great Lakes Central Railroad, formerly known as Tuscola Saginaw Bay Railways, sit in storage on tracks near Cherry Growers, Inc.
Great Lakes Central Railroad President Michael Bagwell said the company moved the cars to the site after “quite a bit” of vandalism at their previous storage location in Cadillac.
“Vandalism was costing us a lot of money when windows were knocked out or spray paint was painted on the sides,” he said.
The company has a person “keeping an eye” on the cars to prevent vandalism at their new location, Bagwell said.
The company eventually hopes to lease the cars out across the state and country for use in commuter rail services, Bagwell said.
According to a piece published on Feb. 1, 2015 in the Detroit Free Press: “The 1950s and ‘60s-era double-decker cars are sitting in a rail yard in Owosso, where they are expected to remain for the indefinite future.” As a result of The Free Press article, MDOT officials have come under intense fire for spending $12 million since 2010 to refurbish and lease Ferris’s rail cars for commuter rail service between Ann Arbor and Howell, a commuter rail project that has never materialized.
MDOT leased 23 of the ‘50s and ‘60s era rail cars from Ferris’s company in 2010, one year after Dawn Gabay, then interim director of AATA sent a letter to an MDOT official in which she writes about Ferris’s vintage rail cars, “While the equipment is attractive due to the fact that it is locally owned, based on our conversations with … operators of similar cars, this design of equipment is unable to comply with the principles set forth by current accessibility guidelines and therefore unsuitable for use in any new commuter rail service.”
Detroit Free Press writer Paul Egan describes the state’s leasing of Ferris’s rail cars as a “rail debacle.”
The state has paid the owner of the rail cars, Great Lakes Central Railroad, almost $7.6 million for refurbishment and another $2.7 million in lease charges for the cars. According to Paul Egan’s reporting, “the per-car lease costs more than doubled in 2013 and 2014 as refurbishments were completed and the cars were certified as rail-worthy. Under the terms of the state’s contract with the railroad, MDOT then had to start paying ‘in-service’ rates that total about $3,000 a day.”
Gabay’s March 17, 2009 letter to MDOT official Tim Hoeffner, was written three years after Hieftje and Ferris began pitching the WALLY to the public, state and federal officials.
On June 30, 2009, Kirk T. Steudle, MDOT’s Director wrote to Gabay stating that “The Federal Transit Administration and the Federal Railroad Administration have advised us that using METRA cars modified to meet current Americans with Disabilities Act requirements is acceptable for both Detroit-Ann Arbor and WALLY services.” The reply was cc:ed to John Hieftje and Tim Hoeffner.
By Nov. 2009, newly-hired AATA CEO Michael Ford had sent a letter to MDOT’s Tim Hoeffner in which Ford writes, “MDOT will contract with an outside party to rehabilitate and acquire by lease, the use of 12 used bi-level passenger cars (4 cab-control cars and 8 coaches)….”
The letter to MDOT goes on to say that AATA will “undertake public education, marketing and public relations related to the planning operations of WALLY services.”
One year after Ford sent that letter, MDOT entered into a leasing agreement with Louis Ferris, Jr.’s company for 23 METRA cars.
Between 2009 and 2015, Hieftje, along with appointed, local and state elected officials continued to spend taxpayer money, lobby state and federal transit officials and allocate city and AATA staff time to the WALLY—a commuter rail service using refurbished rail cars which Gabay had told MDOT officials were “unsuitable for use in any new commuter rail service.” However, in response to Gabay’s concerns, MDOT’s Director alleged his department had been given the green light by federal transit officials.
The Ann Arbor Independent has filed a Freedom of Information Act with the federal transit agency which MDOT’s Director claimed had given his department a ruling that the double-decker cars which Gabay claimed were not ADA compliant would, after refurbishment, indeed meet federal ADA standards.
In response to criticism from legislators about the $12 million spent on commuter rail cars never used, as well as assertions in Gabay’s 2009 letter, MDOT officials defended the 2010 decision to lease the cars. In the course of defending the decision, MDOT officials have not publicly mentioned that any federal transit organization or federal transit official had provided a ruling in 2009 concerning whether the train cars complied with ADA regulations.
The Great Recession hit and then came American Recovery and Reinvestment Act of 2009, a $787 billion dollar stimulus program. On Jan. 8, 2010, MDOT Director Kirk Steudle sent a letter to Federal Transit Administration Regional Director Marisol Simon. In that letter, Steudle writes that he’d applied for $33 million in capital funding from the Transportation Investment Generating Economic Recovery (TIGER) grant program for the WALLY.
“In the event that TIGER funding is not awarded,” Steudle writes in his 2010 letter, “we expect to seek funding from other sources.”
The TIGER grant funding application was rejected. Another $22 million TIGER grant application for WALLY funding was also rejected in Oct. 2010.
Michael Benham, an AAATA strategic planner hired in 2009 and charged with oversight of the WALLY project, said after USDOT rejected funding the WALLY project twice: “In spite of the TIGER money not coming through, we’re continuing to make progress. The state has done an awful lot to improve the tracks … There are rail cars that are being (rehabilitated) as we speak. A lot of ingredients are in place, just not all of them.” Benham added: “We’ve known all along that funding for WALLY would be a challenge.We’re systematically trying all the available funding sources and we’re hopeful that at some point we’ll be successful.”
As of 2011, the State of Michigan had spent $16.3 million on track, siding, crossing and rail renewal for the WALLY.
As of 2014, close to $32 million in local, county, state and federal funding had been spent on the WALLY, including millions on commuter rail cars, track improvements, staff, consultants, studies, marketing and other ancillary costs for a commuter train that the public was told would launch in 2009 and 2011, respectively.
In its 2014 budget, AAATA Board members approved a $695,000 line item for the non-existent WALLY, up 243 percent from the $190,000 budgeted for the WALLY in 2013 and up from the $230,000 budgeted by AAATA Board members for the WALLY in 2012.