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M1 Rail, Woodward Streetcar Project, Considers Private-Sector Operators

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File Photo. M1 Rail, the group behind the proposed Woodward streetcar line, have five private-sector firms currently under consideration to operate the service. (Paul Ellis/AFP/Getty)
File Photo. M1 Rail, the group behind the proposed Woodward streetcar line, have five private-sector firms currently under consideration to operate the service. (Paul Ellis/AFP/Getty)

The backers of a rail line that would cover a 3.3 mile stretch of Detroit's Woodward Ave. are putting together a list of potential private-sector management companies they believe would be qualified to run the service -- should it become a reality.

Crain's Detroit Business reports that the U.S. Department of Transportation has asked M1 Rail, a private-sector group led by businessmen Roger Penske, Dan Gilbert and Matt Cullen, for the names of potential operators as a condition of eligibility for up to $25 million in capital funding.

The group currently has five firms under consideration but has declined to make those names public, according to Crain's.

Last week, U.S. Secretary of Transportation Ray LaHood rejected the rail group's bid for $25 million in funding from the the department's current round of grants. In his letter LaHood said a number of obstacles would need to be resolved by the group so that it could qualify for alternative sources of federal funding.

In order to be considered, he said the group would need: the development of an operating plan for the rail service; the development of a capital reserve or other strategy to keep the project afloat should it exceed costs; an agreement between M1 Rail, the state and local shareholders outlining the responsibilities of each; an acknowledgement from the Southeast Michigan Council of Governments or a similar body that it has the legal authority to provide the functions outlined in the group's plan; the authorization of a regional transit authority.

MLive reports that the M-1 rail has secured about $90 million in financial backing for the $137 million project that would run from Hart Plaza to Detroit's New Center area.

Earlier the project had been envisioned as a a 9.3-mile light rail line, but those plans were scrapped last December after Mayor Dave Bing announced the city was committed to enhancing the city's bus system.

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