Monday, September 4, 2017

The Epitaph of Great Lakes Basin Transportation

The Surface Transportation Board has rejected Great Lakes Basin Transportation llc application.
There is a reason the six Class 1 railroads did not support GLBT.  The larger Transportation Industry is forcing the rail industry to move away from Chicago, much like Adam Smith's "Invisible Hand of Capitalism" transforms the larger Transportation Industry through supply and demand.   Frank Patton fails to understand the Rail Industry is just a part of the much larger Transportation Industry.
 
The Surface Transportation Board was wise to think big and reject the GLBT application so quickly.    Just like the hundreds of affected landowners and farmers, the Surface Transportation Board has better things to do than play with Frank Patton fantasy.    The alternative to outright rejecting this project was to let the proposed project linger in STB Limbo until it became obvious to everyone that industry was moving away from Chicago.

While the industry was not supporting the proposed GLBT, few came out against GLBT.   Thanks Norfolk Southern!  The most vocal opposition to GLBT came from the affected farmers and landowners.
On the grassroots side, Great Lakes Basin Transportation llc did prove grassroots organizations can be successful in defeating a bad project.  For any grassroots organization who might follow, the first step to winning against a bad proposed infrastructure project is having the resolve and determination that this project does not belong on anyone's property.   Rerouting off one farm and onto another farm is not an option.   Far too long it was the strategy of corporations and perhaps the instinct of some landowners to divert the project on someone else's property. That has changed.

"We can block this thing is we stick together" has become the unofficial motto of farm based grassroots opposition.  We have become the voice of society who will challenge the need and viability of infrastructure projects and question the benefits for the public.

The corporate tactic of dividing landowners into 2 or 3 subgroups that fight amongst themselves over route siting doesn't work anymore.  It not good enough or winning strategy to move a project onto someone else and off your own property.

We can block this is thing if we stick together.

Farmer driven grassroots opposition starts with one person with the conviction to inspire communities across state lines.  It started with one farmer believing this proposed project was wrong and didn't belong on anyone farm,  and it snowballed from there. A few hundred supporters quickly turns into several thousand supporters across multiple states. Then there are the people in each county and community who grabbed ahold of the idea and became the voice in their community to provide the legitimacy for others to follow.  Resistance and apprehension falls like dominoes when people see their neighbor get evolved.

There is much more to a grassroots organized opposition.  There's the legal side, finding a lawyer and working with the lawyer. There is the social media managers and graphic artists.   There is the Twitter symphony.  There is the press release writer.  There is the researchers taking a crash course in the rail industry. Then there are the boots on the ground who organize and host the informational meetings, and finally, there are the signs and managing sign inventory.

Combined, hopefully we torqued Frank Patton's lug nuts, plugged his snapping rolls with grass,  wore out the knotter in his baler, and took his objectivity off the primary goal of developing his project.  It sounds like a lot to build such a team, but we have all these people in our rural communities. It's just a matter of organization, finding the right people and plugging them in the grassroots organization.

After that, it's the funding.  Thank you everyone for believing in the grassroots organization.   It was worth the investment in our farmland.  Whether it's considered an investment or perhaps benevolence, it was worth it. We won.

Corporations really have no clue who they are up against when a few hundred farmers and landowners decide to get organized.    They have no idea of the depth of our talent base, how fast we can move when the objective is clear, and the passion we will fight to protect our farmland.   

To those who follow BLOCK GLBT family with the next proposed capital venture eminent domain project, it all starts with one person who says we can block this thing if we stick together.

We stuck together.

We blocked Great Lakes Basin Transportation!
 
Great Lakes Basin Transportation is dead. 

Sunday, May 14, 2017

GLBT Chicken & Egg Arguments




This is not a “Which came first the chicken or egg” scenario.  Many times when speculation capital attempts to invest in infrastructure projects, they make this argument that they are working at a disadvantage because the industry is not letting them into their circle of friends.  Speculation capital’s argument they cannot gain financing and funding without a Certificate of Public Convenience and Necessity from a regulatory board.  Do not accept this argument from Great Lakes Basin Transportation.  GLBT has no financing, no investor funding, and no customers and this is not a chicken-egg scenario. 
This is speculation capital attempting to gain a Certificate of Public Conveniences and Necessity.  Once GLBT has a CPCN, it has a tangible asset and can go to Illinois, Wisconsin, and Indian to begin the process of eminent domain to gain the easement.  The CPCN is a huge asset.  It’s the hammer of eminent domain. 
Quote by Michael Blaszack's book.  GLBT attorney is a rail buff.
Many times regulatory boards will wash their hands of the situation and justify it’s not their job to bless the business plan as a good plan.  Unfortunately, that is exactly what speculation capital spin a CPCN to the banks and potential shareholders.  The CPCN is a huge asset of blessing a business plan.

Would BNSF go to the STB and request a CPCN without showing customers, financing, funding?

No.

If any Class 1 railroad went before the Surface Transportation Board with a Financial Application to build a railroad bypassing Chicagoland, the application would list all three in depth.  GLBT does show a schedule of anticipated traffic from all 6 Class 1 railroads which they are “confident” to be a source of income, but they have no letter from any of the existing railroads indicating intent to use GLBT.  There is no proof of their “confident” assumptions.

Does the GLBT intend to come back to the STB requesting to force the Class 1 railroads to use the proposed GLBT bypass in the name of equity and fairness?


One has to wonder if GLBT refusal to list shareholders in the company is an attempt to hide the lack of funding as “proprietary information”.  As controversial as this project is, it needs to be truly open and transparent.  Hiding behind Orders of Protection only prolongs the process. 

We as a society do have a problem with infrastructure siting taking too long.  This process lasts way to long.  The proposed Tongue River project lasted at the STB for 35 years before it was denied.  Tongue River at least had a guaranteed customer.  GLBT doesn’t even have one guaranteed customer.   

Landowners must endure the stress of the unknown when proposed projects are in limbo before regulators for what feels like perpetuity.  Landowners must delay financial decisions, including delaying potential sale of property when the siting process drags on too long.  To keep the process quick, efficient, and reduce the potential of further appeals and lawsuits, I urge the STB to deny GLBT the request of an Order of Protection.  Let’s keep this process open to the public.  Speculation Capital should not play by a different set of rules than other railroads.

GLBT, NO Financing, NO Funding, NO Customers & NO Choo-Choo




Does anyone else see Great Lakes Basin Transportation Financial Application as a train wreck?  This proposed business plan offers no balance sheet, no list of investors, no funding, no financing, and most importantly no guaranteed customers.  This company doesn't even have a choo-choo to its name.

P14 from the GLBT Financial Application to the Surface Transportation Board
Financing for the construction phase would be accomplished primarily through the issuance of debt securities.
This proposed project is a train wreck.

1.      Financing is not the same as funding.  In the Financial Application GLBT makes no indication the financing is available.  This company will be borrowing somewhere between 2 to 8 billion dollars, yet GLBT does not offer a statement from any financial institution indicating a willingness to finance the project.  How is the STB supposed to authorize a project where there is no financing available? 
  



P15 from the GLBT Financial Application to the Surface Transportation Board
Exhibit G is a pro forma income statement which shows anticipated revenues, operating costs and debt service costs in years one through five after completion of construction, assuming a financing structure of 37% equity and 63% debt.

Page 46 from the GLBT Financial Application to the Surface Transportation Board
As there are no revenues or operations, there are no current relevant balance sheets or income statements.

2.      GLBT also has no funding.  Financing is ability access to capital through borrowing with loans, but at the end of the day you have to have cold, hard cash to build Great Lakes Basin Transportation.



In the Financial Application to the STB, GLBT projects the proposed project will be constructed with loans funding 63% of the project and investment capital covering 37% of the capital required for construction and operating capital.  While GLBT claims 24 stockholders, GLBT offers no indication how many of these stockholds are offering actual cash and how many of the stockholders are providing “services”.  GLBT doesn't even want to tell the public who the investors in this project.  It is conceivable all of the existing 24 stockholders in GLBT are offering “services” in return for equity in this company. 

What is the point of a Financial Application with no actual financial numbers or statements beyond Pollyanna projections?

P52 & 52 From the GLBT Financial Application to the Surface Transportation Board
From a business standpoint, we are confident that the current traffic base of rail shipments moving through Chicago will generate sufficient revenue to adequately fund the operation and maintenance of the proposed railroad and repay its construction debt. 
                       
3.    GLBT does not offer a guarantee of a customer base from Class 1 railroads beyond “confident” assumptions.  There is no list of Class 1 railroads that have expressed a willingness to use GLBT.  At this point Union Pacific from the west and Norfolk Southern from the east have publicly state they have no intention of using this proposed railroad.  The largest railroad west of Chicago and the largest railroad east of Chicago will not use GLBT.  Strangely the GLBT Financial Applications projects weekly trains from these railroads using GLBT.
We, as a society are left with the clean up when speculation projects fail.

Conclusion
GLBT has submitted a Financial Application to the STB with no indications of the ability to raise the money to build this proposed project.

GLBT has submitted a Financial Application to the STB with no supporting documentation of stockholders ability to provide 37% of the equity capital.

GLBT has submitted a Financial Application to the STB with no statements from Class 1 railroads willing to use the project. 

No financing, no funding , and no customers, but Great Lakes Transportation expects the Surface Transportation Board to issue a Certificate of Public Convenience and Necessity because they filled out the every portion Financial Application.   We, as a society, are willing to open our communities to companies doing “dirty jobs” when they are legitimate companies with more than just a business plan of promises.  All too often our communities have accepted a slick sales pitch, promising jobs, and promises of tax income.  All too often these salesmen have left with the project a mess, complete with empty promises, and a scar left on our communities. 

With no financing, funding, and no customers, GLBT gives every indication if constructed, it will be a failure and a 23,000 acre scar upon our land.