TeD STRICKLAND GOVERNOR STATE OF OHIO December 7, 2010 VIA HAND DELIVERY Governor-Elect John Kasich 77S. High Street, 19" Floor Columbus, OH 43215 and 340 B. Gay Street Columbus, OH 43215 Dear Governor-Elect Kasich, write in response to your recent request that my administration stop work on Ohio’s plans to reestablish 3C&D passenger rail service. ‘As you know, Ohio successfully competed against many other states to win a highly competitive $400 million federal grant to establish 79 mile-per-hour passenger train service connecting Cleveland, Columbus, Dayton, Cincinnati, and communities in between. Because I am concerned that your views on this project may be based on incomplete or inaccurate information, | wanted to take this opportunity to provide an explanation for why I believe the 3C&D project is so critical to Ohio’s economic future. I invite you to consider this information, as well as other research-based information, so that you can make as informed a decision as possible about how to handle this project in a way that is best for Ohio.! ‘While developing passenger rail service in Ohio is not a panacea, there are several important reasons why this project should move forward. First among those is that this investment will ead to the creation of thousands of Ohio jobs at a time when nothing is more important. In addition, this project would ensure Ohio does not become an island, isolated from the emerging Midwest high speed rail system. Ohio could finally have its own passenger rail network that connects to regional and national rail networks, And by giving more Ohioans an additional transportation choice, we would reduce highway congestion, improve freight transport, reduce air pollution, and lessen dependence on foreign oil. Td like to provide you with additional detail to support what I consider to be the three most significant and compelling reasons to develop passenger rail in Ohio. Developing passenger rail will lead to the creation of thousands of jobs for Ohioans, revitalize our cities, and help keep talented young people from leaving our state. * pve attached to this later a document that briefly touches on some ofthe pervasive myths surrounding this issue, Hike the ntin hat tetra would only operate 339 ph, 77 SOUTH HIGH STREET + 30TH FLOOR + COLUMBUS, OHIO 43215-6117 © 614.466.3555 + Fax: 614.466.9354Page 2 December 7, 2010 Governor-Blect John Kasich Ohio’s Passenger Train Network Would Create More Than 16,000 Jobs First and foremost, this project is about jobs for Ohioans. Establishing high speed passenger train service in the 3C&D corridor would lead to the creation of more than 16,000 permanent jobs. Other states, like New York and Illinois, hope to take Ohio’s money to create jobs in their states. As U.S. Department of Transportation Secretary Ray LaHood has stated, that is exactly what will happen if Ohio rejects our $400 million award: the funds will be given to another state to create jobs there. The Obama Administration hhas made it abundantly clear that it is deeply committed to the enhancement and expansion of passenger rail in the United States, and that these funds will be used for that purpose and no other. The governors- elect of California and New York have already asked for Ohio’s funds. It is my hope that Ohio’s leaders never voluntarily give Ohio jobs away under any citcumstances. The thousands of jobs at stake include both manufacturing jobs and new jobs that would be created in station cities as part of the $3 billion of development expected to occur around stations. This investment would strengthen Ohio’s existing suppliers and manufacturers. Our state is already home to at least 225 businesses and 26,000 employees tied to the railroad industry. Companies like Columbus Steel Castings, Morrison Metalweld in Canfield, and Precision Gage and Tool near Dayton express confidence that the 3C&D project would boost their sales. These Ohio companies, and others like them, stand to benefit and grow from Ohio’s active participation in the development and operation of a regional and national passenger train system. Ohio also has the opportunity to attract new manufacturing business to our state. U.S. Rail Car is headquartered in Columbus and is considering building a manufacturing center in Ohio that would be the only U.S.-owned, domestic manufacturer of passenger train cars. If Ohio does not move forward with this project, U.S. Rail Car will not bring a new manufacturing center to Ohio. Returning passenger rail to our downtowns is perhaps the most transformative action that Ohio’s cities, ‘would experience in decades. Without strong cities, we cannot have strong suburbs, Revitalized urban cores will have @ positive impact on the surrounding metropolitan areas—as Greater Ohio’s Restoring Prosperity report points out, “the seven largest metropolitan areas in the state house 70 percent of the state population and produce 80 percent of the state GDP.” Aside from manufacturing growth, the ‘greatest potential for job creation exists in station cities like Cleveland, Columbus, Springfield, Riverside, Dayton, Sharonville, and Cincinnati, and future station sites in the Mansfield, Middletown, and Delaware areas. The increased commercial activity in each of these cities would result in new jobs both in the cities, and surrounding communities. ‘These communities recognize the successful job creation and development that passenger train service has delivered in 14 other states, includin * InMaine, the Northern New England Passenger Rail Authority estimates $7.2 billion in private- sector construction, 17,800 new jobs, and $76 million in annual tax revenues. Robert Martin, a real estate developer from New England wrote: “We found that the Amtrak Downeaster is a true economic engine on our steel interstate. After less than $100 million in public investment, we sce over $7 investments; 42,000 new housing units; almost 7 million square feet of commercial space and almost 18,000 new jobs, Magnify that by the impact, ‘on energy and the $2.4 billion per year of additional consumer purchasing power, and you have a huge shift in the economy ofa state one-eighth the size of Ohio. If we can do this in our little state, think of what Ohio ean do.”Page 3 December 7, 2010 Governor-Eleet John Kasich * InCharlotte, North Carolina, a startup passenger rail service generated $291 million in private development in less than 12 months. * InDallas, Texas, more than $4 billion worth of private and public projects ~ all built w decade — are the direct result of the presence of a single ral station. ‘National business developers, such as Forest City Enterprises in Cleveland, recognize that passenger rail cities in Ohio stand to reap the same job creation rewards as cities in other states. There is tremendous ‘opportunity for job creation around the initial cight station sites; ‘+ The City of Cleveland’s station would connect to the city’s light rail system and would be incorporated into plans for the Medical Mart, Convention Center, casino, and East Bank Flats development in order to encourage more economic activity and job creation downtown, The City of Columbus station would support business in the Short North and Arena District and be adjacent to the Columbus Convention Center, with potential tie-in to light rail connecting to Port Columbus Airport and the suburbs/eommunities of northern Columbus ‘+ The City of Dayton estimates that private mixed-used downtown development within a 10 minute walk of its station at Sixth and Ludlow could range from $150 million to $250 million in rehabilitation and new construction over the next decade, © The City of Riverside has estimated that the station across from the U.S, Air Force Museum would spark 1.2 million square-feet of new commercial space, generating $180 million of taxable property and $480 million of taxable income, as well as strengthening the Museum’s bid to host one of the retiring space shuttles. + The City of Springfield has already incorporated its planned station into exciting plans to revitalize its downtown and university district. If we turn away Ohio's $400 million award, Ohio loses not just those resources but all of these job creation opportunities—in Cleveland, Columbus, Springfield, Dayton, Riverside, Sharonville, and Cincinnati, as well as the Mansfield, Middletown, and Delaware areas. Instead, our $400 million will be put toward the creation of jobs in cities in other states, Ohio's Passenger Rail Network Will Help Ohio Attract and Retain Young Workers ‘Along with sending our jobs to another state, turing away Ohio's federal funding would send a negative message to Ohio's young people. Public surveys, such as that conducted by a nationally respected workforce retention firm for the Columbus Chamber of Commerce in April 2007, found that, in order to attract and retain young professionals, Ohio’s cities need strong urban cores with accessible public transportation. President E. Gordon Gee of The Ohio State University also recognized the link between college students and economic development when he wrote to the U.S. Department of Transportation that passenger rail in Ohio will provide a critical link to the emerging knowledge economy. With more than 220,000 college students within 10 miles of the proposed 3C&D station stops, a robust publie transit infrastructure would