Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, 2015 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 1 NORTHERN LIGHTS EXPRESS PROJECT STATUS

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 2 BACKGROUND

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Northern Lights Express Intercity passenger rail service between Minneapolis and Duluth 152-mile corridor on existing BNSF track Intermediate Stations Coon Rapids, Cambridge, Hinckley & Superior WI An alternative travel option that is safe, reliable and frequent

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Northern Lights Express The NLX Project is led by: The Minnesota Department of Transportation in consultation with: The Federal Railroad Administration and with cooperation from: The Minneapolis-Duluth/Superior Passenger Rail Alliance, The Wisconsin Department of Transportation and Local communities.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Northern Lights Express March 2013 NLX Service Development Plan Tier 1 Service Level Environmental Assessment August 2013 Finding of No Significant Impact and State Negative Declaration 4 th quarter 2013 Begin PE/NEPA phase

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Current Work -- PE/NEPA Phase Financial Planning Ridership Forecasts Capital Cost Operating Cost Benefit-Cost Analysis Operational Planning Testing of Alternative Service Plans RTC Capacity Analysis Preliminary Engineering Station Design Track Design Systems Design Grade Crossings Tier 2 Project Level Environmental Assessment

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Current Work -- PE/NEPA Phase Financial Planning Ridership Forecasts Capital Cost Operating Cost Benefit-Cost Analysis Operational Planning Testing of Alternative Service Plans RTC Capacity Analysis Preliminary Engineering Station Design Track Design Systems Design Grade Crossings Tier 2 Project Level Environmental Assessment

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 8 PRELIMINARY OPERATING PLAN

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Operational Plans Tested Operational alternatives: 110 maximum speed 4 round trips 8 round trips 90 mph maximum speed 2 round trips 4 round trips 6 round trips 8 round trips Express service from Duluth to Minneapolis Local service from Hinckley to Minneapolis Based on preliminary benefit cost analysis: 4 round trips at 90 mph maximum speed appears to have the highest BC ratio Preferred operational alternative Preparation of final BCA analysis will follow completion of discussions with BNSF Railway regarding several operational and cost issues.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Possible NLX Schedule A preliminary benefit-cost analysis has indicated that the most cost-effective operating plan is probably 4 round trips at speeds up to 90 miles per hour. About 2½ hours travel time between the Twin Cities and the Twin Ports

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 11 RIDERSHIP FORECASTS

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Ridership Forecasts Annual Ridership Current Forecasts , , , ,000,000 Tier 1 Forecasts , ,376,000 High speed passenger rail connection to Chicago Assumed in Tier 1 EA Not assumed in current forecasts 13% of Tier 1 ridership associated with direct connection to Chicago Tier 1 w/o direct connection , ,200,000 18% drop in ridership Change from 8 to 4 round trips.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 13 CAPACITY ANALYSIS

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Objective Identify capacity improvements for BNSF track necessary to support reliable freight and passenger service Inputs Existing track geometry plus scheduled improvements Existing and anticipated freight and passenger train traffic Proposed NLX traffic Outputs Track improvements Signal improvements RTC Capacity Analysis

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Capacity Improvements Track Upgrade for higher speed Extend existing sidings Double track near Superior Third main – Coon Creek/Northtown Signal improvements Centralized Traffic Control (CTC) Power switches remotely Positive Train Control (PTC) Ensure safe operation

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Other Implementation Costs Safety Upgrade safety measures at all grade crossings – Both public and private Minimum of flashing lights, gates and medians Close crossings where possible Stations Adding track and platforms at Target Field Station in Minneapolis The Depot in Duluth New Stations at Coon Rapids Cambridge Hinckley Superior Maintenance facility Equipment Locomotives and Coaches Layover facilities Professional Services (16%) Contingency (25%)

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Implementation Cost Tier 1 EA $990 M Current estimates Between $500 M and $600 M Upcoming discussions with BNSF will determine what portion of the implementation cost will be funded by BNSF.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 18 EQUIPMENT

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Equipment For planning purposes, it is assumed that the equipment will be Next Generation high speed diesel-electric locomotives Next Generation Bi-level coaches Upcoming discussions with BNSF will determine the actual equipment to be utilized.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 20 STATIONS

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Station Design Platform Climate controlled station building Platform shelters Access facilities Parking Pedestrian connections Transit stops and shelters Drop-off/Pick-up locations Taxi stands Lighting ADA compliant

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Station Renderings

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 23 OPERATING COST ESTIMATES

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Operating Cost Estimates For the first five years: Operating cost is expected to average in the range of $17.5 M per year. Revenue from fares is expected to average in the range of $12.8 M per year. Fare recovery ratio will average in the range of 74% MnDOT policy will be set fares to maximize revenue Final operating cost estimates will depend upon the resolution of several operational issues in discussions with BNSF Railway

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 25 RETURN ON INVESTMENT

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Return on Investment Benefits Safety Reduced highway crashes Environmental Sustainability Reduced CO 2 Reduce emissions Economic Competitiveness Travel cost savings Productivity savings Marginal congestion savings Benefits to freight service Other Effects Quality of Life Property premium Economic Impact Employment Construction jobs Operating jobs Spin-off effects Economic Activity Improved access to jobs Improved access to labor force Retail sales Tourism State and local taxes Sales taxes Income taxes Property taxes

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Preliminary Assessment of Benefits Safety Benefits Safety benefits from reduced highway fatalities and crashes are in the range of $165 M. Environmental Sustainability Environmental sustainability benefits from emissions savings and CO 2 reduction are in the range of $47 M. Economic Competitiveness Economic competitiveness benefits from travel cost and productivity savings and highway congestion avoidance are in the range of $158 M. Quality of Life NLX will provide safe, reliable, and frequent service to activities in the cities it serves, such as professional sports events in the Twin Cities and Grandma’s Marathon in Duluth. Station Area Development NLX service will result in increased property values, increased investments and station related development. NLX is expected to generate an estimated increase in property values in the range of $136 M. After discussions with BNSF Additional benefits will be calculated related to improved freight movement for both the railroad and shippers. Potential benefits may apply to Northstar operations.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Preliminary Assessment of Economic Growth Job Growth NLX will broaden the labor market and connect workers to a wider network of employers. NLX will result in an estimated increase in employment in the range of 3,100 jobs annually during construction and 380 jobs annually during the first 5 years of operation. Tourism NLX will foster tourism activity and special event attendance in the corridor. NLX will result in an estimated increase in tourism revenues in the range of $378 M and an increase in tourism related wages in the range of $233M over a 40-year period. Revenue Combined, the first year of construction and the first year of operation will increase state and local tax revenue in the range of $16M. Over a 40-year period, the increased economic activity associated with NLX will generate an estimated increase in state and local taxes in the range of $355 M. Economic Impact Analysis Preliminary economic impact analysis demonstrates a positive return on investment. Increased economic activity that is expected to occur as a result of the operation of NLX will return actual dollars to the State and local governments.

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, NLX -- Project Management Oversight Project Kick-Off Meeting December 19, 2012 December 16, 2015 Minneapolis Duluth/Superior Passenger Rail Alliance 29 SUMMARY AND NEXT STEPS

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Current Work -- PE/NEPA Phase Financial Planning Ridership Forecasts Capital Cost Operating Cost Benefit-Cost Analysis Operational Planning Testing of Alternative Service Plans RTC Capacity Analysis Preliminary Engineering Station Design Track Design Systems Design Grade Crossings Tier 2 Project Level Environmental Assessment

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Current Work -- PE/NEPA Phase Financial Planning Ridership Forecasts Capital Cost Operating Cost Benefit-Cost Analysis Operational Planning Testing of Alternative Service Plans RTC Capacity Analysis Preliminary Engineering Station Design Track Design Systems Design Grade Crossings Tier 2 Project Level Environmental Assessment Consult with BNSF Railway

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, BNSF Coordination With the preliminary selection of the preferred operational alternative, MnDOT will begin serious discussions with BNSF regarding several issues. Capital improvements to track and systems to support: Increased capacity Increased speed Reliability of passenger operations Reliability of freight operations Capital cost estimates Operating assumptions Future operator Schedule Equipment Operating practices Performance goals Operating cost estimates

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Next Steps Discussions with BNSF Railway Finalize: Capital cost estimates Operating cost estimates Benefit-cost analysis Economic impact analysis Prepare Financial Plan/Business Plan Complete Hinckley Loop study Preliminary engineering Tier 2 EA Prepare Implementation Plan Revise Service Development Plan

Northern Lights Express Minneapolis-Duluth/Superior Passenger Rail Alliance December 16, Schedule 2 nd Quarter 2016 Financial Plan 4 th Quarter 2016 Complete Preliminary Engineering Complete Tier 2 Project Level EA 1 st Quarter 2017 Implementation Plan Service Development Plan