Texas Central Railway Deeds Texas Property
To The Japanese Government

Jewett, TX – Despite its claim to be a Texas company building a Texas project to benefit the people of Texas, public documents show Texas Central Railway has deeded property from Texas landowners to the Japanese government through an offshore entity set up in the Cayman Islands.

Based on a series of recently recorded real property transactions in counties along the affected route, it appears the Japanese government required Texas Central to put up the land as collateral for the sizeable loan owed to them. In each county (Leon, Waller, Madison, Harris, Grimes, Dallas, Ellis, etc.), Texas Central filed a “Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing” relating to property owned by Texas Central in that county. The beneficiary of these Deeds of Trust is an offshore entity named “Japan Texas High-Speed Railway Cayman GP.” Texas Central did not disclose the existence of this offshore beneficiary to any of the landowners it convinced to sign an option contract. Nor did it disclose its plans to use the property purchased through the option contracts to secure a loan from the Japanese government.

Adding to the serious concern of several elected officials from the local to federal levels, Texans Against HSR chair and president, Kyle Workman, explained that this latest deceptive action is one in a long string that landowners need to be made aware of. “Texas Central has long touted itself as a Texas company and a Texas project. Yet, some of the first Texas property it acquired was immediately deeded to an offshore shell company created by the Japanese government.”

Workman continued, “If Texas Central had disclosed their intent to deed this property to the government of Japan, lawmakers and landowners most likely would have considered these real estate transactions differently. There are still landowners with pending option contracts with Texas Central…these Texans must be notified immediately that the property Texas Central has acquired is being used as collateral to secure a loan from a foreign government. We ask that the Governor support measures to protect Texas land from being deceptively acquired and transferred into the shadows of offshore ownership, beyond the regulatory protections of US and Texas law.”

While Texas Central Railway continues to claim it will begin construction next year, the company has recently laid off the majority of its staff, admitted the cost estimate for the project has ballooned to $30B, expressed its intent to seek federal funds for a project they have called “private” and “not needing any public funds,” and is now being required by the federal-level Surface Transportation Board to file a full application including financial and ridership information, which the company has refused to make public thus far.

Additionally, the Federal Railroad Administration is set to publish its Record of Decision (ROD) related to the Final Environmental Impact Statement (FEIS) for this HSR project on Friday. This ROD does not give the company the needed permission to construct; however, it is considered a final federal action for the project, allowing lawsuits regarding FEIS NEPA violations to begin.

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TEXAS CENTRAL RAILWAY SEEKING STIMULUS FUNDS

Texas Central Execs Explore Federal Dollars While Feds Limit Taxpayer

Jewett, Texas – New revelations regarding funding for the embattled Dallas Houston HSR have come to light over the last several days when a letter from Drayton McLane, Texas Central Railway’s Chairman and main investor, revealed that the project has “hit a snag” and is now estimated to cost $30B, which is a 300% cost increase since the project was first announced and a 150% increase from the project cost currently shown on the Federal Railroad Administration project dashboard. However, Texas Central is apparently not worried about this enormous cost increase because they “hope to receive [monies] from President Trump’s infrastructure stimulus through the Department of Transportation,” despite, for nearly a decade, touting the project to the public, elected officials, and the media as a “privately funded project” to create a more favorable public perception.

First to highlight the letter describing Texas Central’s changes in funding plans was a Dallas Business Journal’s article by Evan Hoopfer, who has closely followed the Dallas Houston HSR, reporting that in response to McLane’s letter, Carlos Aguilar, CEO of Texas Central, admitted, “We don’t know whether [private equity is] going to be there or not. It depends on the markets themselves to determine if and how much of the money can come from private equity. And that’s why it could require some stimulus money, but we don’t know yet.”

John Fund, a nationally-known and well-respected journalist who has often spoken out on the reality of this proposed HSR’s failed future, weighed in on the admission that the project will seek federal funding in an article entitled, “This Is Exactly the Wrong Time for Another High-Speed Train Boondoggle.” Fund explained that “government loans are often forgiven or forgotten, with taxpayers left holding the bag.”

Kyle Workman, Chairman and President of Texans Against HSR, said, “Texas Central has already used the pandemic to explain away laying off the majority of their staff, and now we find out they are using it to make up for their lack of private investment.” Workman added, “We’ve heard that Mr. McLane has been busy asking for every public funding opportunity available in DC. Stimulus funds, RRIF loans that are rarely paid back, and then, ironically timed, a former Texas Central employee now US Representative from Massachusetts recently authored a bill for $205B in funding for HSR, specifically including Texas Central’s project. The depths to which Texas Central will go to get public funds for their ‘private project’ reveals what we have known all along… this project cannot be privately funded.”

The timing of Texas Central’s shift to rely on public funding is underscored by the exclusion of public hearings on matters of safety and environmental impacts for this HSR project. Texas State Representative Ben Leman shared in his recent opinion editorial that he and other state legislators, as well as Texas’ own Department of Transportation, requested postponement of public hearings until a time that the public could fully participate in person. Instead, the Federal Railroad Administration moved forward with telephonic hearings that were poorly promoted and suffered connection issues. Rep. Leman said, “I hope you will join me in rising up in defense of democracy and protecting our taxpayer dollars. I ask you to call upon  [Transportation] Secretary Elaine Chao and ask why the USDOT is supporting Texas Central’s $30B proposed project, when Texas Central is seeking billions in taxpayer dollars, without adequate involvement from the very taxpayers potentially footing the bill.”

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COURT OF APPEALS HSR RULING SETS
DANGEROUS EMINENT DOMAIN PRECEDENT

Jewett, Texas – Jim and Barbara Miles, of Leon County, learned Thursday that in their legal fight  to protect their ranch and private property rights from the proposed high-speed rail project, the Corpus Christi Court of Appeals ruled in favor of Texas Central and its newly-formed affiliate ITL, stating that both entities are railroad companies and interurban electric railways under Texas law. While this ruling was not the outcome the Miles expected, the companies still cannot access or condemn their property, as the Miles will be appealing the ruling to the Texas Supreme Court.

Blake Beckham, the Miles’ attorney and Special Litigation Counsel to Texans Against HSR (TAHSR), said, “If ever there was a ruling that created ‘the Wild, Wild, West’ of eminent domain authority, this is it. This ruling creates a dangerous precedent that would allow anybody with $300 and a computer to immediately obtain the extraordinary power of eminent domain by simply filing papers with the Texas Secretary of State self-declaring to be a railroad. This is not and cannot be the law in Texas.”

Kyle Workman, Chairman and President of TAHSR, said, “We are disappointed the Court of Appeals treated these fundamental private property rights, cherished by all Texans, with such disregard. This project’s cost estimate is now at $30B, the company has laid off the majority of its staff and still does not have the plans, permits or funds to move forward, so this project is far from shovel-ready as they claim. Jim and Barbara Miles are still in this fight, and we are standing with them, as should all Texans who value private property rights.”

To have the original ruling by Judge Deborah Evans that Texas Central and ITL are not railroads or interurban electric railways upheld, Jim and Barbara Miles will appeal to the Texas Supreme Court, which has consistently and repeatedly recognized the importance of private property rights in Texas. “This Court of Appeals ruling has only strengthened our resolve to keep fighting to protect not only our property but the private property rights of all Texans. We are hopeful the Supreme Court will see how this ruling could open a Pandora’s Box of eminent domain issues in Texas. They simply cannot allow this Appeals Court ruling to stand.”

Landowners should know Texas Central still has no right on their private property at this time. While TAHSR suspects Texas Central will try to use this ruling to enter private property for surveys and other activities or try to secure additional funding for the project, until the Texas Supreme Court issues a final, unappealable ruling, Texas Central cannot condemn private property.

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LANDOWNERS REQUEST PERJURY INVESTIGATION
OF TEXAS CENTRAL RAILWAY TESTIMONY IN 86TH LEGISLATURE

Jewett, Texas – Five Texas landowners have requested Texas House of Representatives Investigative Committee Chair Morgan Meyer open an investigation related to possible perjury committed by Texas Central Railway Managing Director Holly Reed for testimony provided during the 86th Legislative Session earlier this year.

Texas Central representatives testified at all committee hearings for bills related to high-speed rail, but the landowners’ complaint is limited to two specific hearings on bills related to landowner protections against misuse of eminent domain authority by high-speed rail companies. Texas Central has long contended it is a railroad with the authority of eminent domain and represented this to private property owners in option contract negotiations. Even after a court ruled the company is not a railroad and does not have eminent domain authority, company representatives continue to make this claim to the public.

HB 4219 would have allowed landowners to cancel option contracts with the company and get their property back if it was later determined in court that Texas Central did not have eminent domain authority (the court ruling above was issued during the course of the legislative session). HB 1367 would have given landowners who signed option contracts under the threat of eminent domain the right to get their property back from Texas Central if it was used for something other than the high-speed rail project or if the project was cancelled.

According to the landowners, Reed’s testimony regarding the company’s “option purchase program” was material to resolving the concerns of legislators about the need for such protections. In the letter is was explained that Reed’s testimony made HB 4219 seem “unnecessary because Texas Central wasn’t going to exercise any options until it had raised $20 billion and received all permits…” Reed shared similar information about the option purchase program in the HB 1367 hearing, making it appear as if the company had built in the protection by not closing on option contracts until the project was at a point where it would be unlikely to be cancelled.

Texas Central Railway has not received any permits to construct or operate a high-speed rail, nor have they raised the needed construction funds; yet, the company began closing on option contracts in December of 2019, which Ms. Reed expressly told legislators they would not do. The landowners’ letter with relevant testimony transcript and supporting documentation can be viewed here.

Kyle Workman, chairman and president of Texans Against High-Speed Rail, said of the request for investigation, “Landowners have been lied to, had their property trespassed on and been sued in the courts by Texas Central, so, while it isn’t surprising that they would misrepresent their project to our State Legislators, it is a serious affront to our State’s legislative process. Because they were misled by Ms. Reed’s testimony, legislators were not able to provide the landowner protections desperately needed to thwart this company’s tactics. Chair Meyer now has the opportunity to investigate these claims and ensure that Texans know the legislature will not tolerate such actions.”

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