UPDATE: Texas Central Railway CEO resigns, high-speed rail project has new life after court ruling
This story last updated June 24, 2022
The Texas Central Railway, seemingly on life support after its president resigned suddenly, may be back on track. The Texas Supreme Court ruled today (June 24) that the company may acquire land via eminent domain to build its high-speed line between Dallas and Houston.
The ruling comes nearly six months after the court heard arguments again to support an appellate court’s decision that Texas Central is a railroad or interurban, which have rights to acquire private property for public use. The court supported the appellate court’s decision two years ago but reversed direction in 2021, leading to a second review.
The time lapse between today’s decision and a series of recent events, including the June 13 resignation of Carlos Aguilar as CEO and president of Texas Central Partners, seemingly put the project in jeopardy. Aguilar cited an inability to get key players on the same page; his resignation followed staff layoffs during the pandemic and reports that Texas Central is behind on its taxes.
Justice Debra Ann H. Lehrmann delivered the opinion of the court on the petition for review from the Court of Appeals in Miles vs. Texas Central Railroad: “We agree with the court of appeals that the entities have eminent-domain power as interurban electric railway companies and need not address whether they also qualify as railroad companies. We therefore affirm the court of appeals’ judgment.”
The decision opens the door for Texas Central to pursue its long-awaited pledge to bring bullet trains to Texas. Texas Rail Advocates president Peter LeCody said the beleaguered Texas Central gets the next move.
“They’re in the red zone,” he said. “So who’s going to pick up the ball and run with it?”
Aguilar could not align stakeholders on common vision
Just how quickly the railroad advances is a big question. After six years on the job, Aguilar is the third CEO to step down since former Harris County Judge Robert Eckels took the helm in 2009. Aguilar did not go into detail about his resignation, which he announced on LinkedIn, but wished the project success.
“While I could not align our current stakeholders on a common vision for a path forward, I wish the project the greatest success and remain convinced of the importance of this venture for the safety and prosperity of ALL Texans,” he wrote.
The Texan, a Texas political news organization, reported that, according to a Spanish news site in Madrid, Texas Central’s entire leadership team left and the search for financing has temporarily stopped.
In April the Houston Chronicle reported that Texas Central owed more than $600,000 in delinquent property taxes.
According to NBCDFW.com, the railroad plans to break ground soon but the company has not issued an official statement about Aguilar’s departure nor its future. According to LeCody, the appellate court attorney for Texas Central, Marie Yeates, filed a letter with the Texas Supreme Court prior to today’s decision affirming Texas Central’s status as an operating company and that it is open for business.
Texas Central has fulfilled much of the paperwork to build a railroad and only needs operating authority from the Surface Transportation Board to complete the final steps before starting construction. The court’s latest ruling should help pave the way.
LeCody said Texas Central has acquired about 40 percent of the right of way to build the elevated line. In the balance are landowners who are not budging, among them James Frederick Miles, who sued Texas Central. He asserts that Texas Central is not a railroad and cannot claim eminent domain to acquire his property.
“(Landowners) say Texas Central hasn’t laid a mile of track or bought a rail car, so it can’t be a railroad,” LeCody said.
Miles won a decision in a local court, but an appellate court overturned it. The Texas Supreme Court said it could not be reviewed, opening the door for Texas Central to proceed. Then the court reversed direction last summer and allowed Miles’ petition for review.
Court’s silence had ‘chilling effect’ on Texas Central
LeCody said in a post announcing Aguilar’s departure that the railroad was in position to move forward until getting bogged down in the legal system, noting that it had environmental clearance and a green light on the 240-mile route between Dallas and Houston from the Federal Railroad Administration.
He said the Texas Supreme Court’s silence to this point had “a chilling effect on all the work that Texas Central has accomplished to date to get their project to the final phase.”
And getting everybody back on track to gain the necessary approvals could be a hurdle. “It’s going to be a slog to get these investors together to go before the Surface Transportation Board.”
In his resignation letter, Aguilar praised his staff, saying it grew from a small start-up to an expert group whose work did not go unnoticed. “I am immensely proud of the achievements of OUR team, gaining among many other accomplishments, end to end regulatory approvals for the first true high-speed rail project in our nation’s history,” he said in the post. “This was a most conscientious and complex endeavor, carefully addressing concerns from land owners, stakeholders, and providing opportunities to all sectors of our society, a FIRST for U.S. infrastructure.”