Husker Train

By Matthew Roque

Sounds awesome, I’d definitely ride it” is the usual response I get when talking to somebody about my train idea. The idea of exploring the feasibility of a commuter train from Omaha to Lincoln for Cornhusker home games was presented to me by an employee of Union Pacific. He figured the demand was high enough to warrant offering the service. He couldn’t have been more right. Bi-level gallery cars gleaming down the track with thousands of rabid Husker fans pouring out of them when they reach their destination: this is the dream that has come from that simple project idea.

My proposal for this project was quite simple. It was my intent to determine the feasibility of a commuter train to bring passengers from Omaha to Lincoln for University of Nebraska-Lincoln football games. To do this, I proposed five different components of my project; a business-and-operating plan, a parking assessment of downtown Lincoln, a traffic and safety study, an environmental analysis of Lincoln and an economic impact study. Although all of the components were interesting, the business-and-operating plan provided the most interesting component outlining actual train operations.

As a professional project, I needed to secure a client that would sponsor this research. For this, I found ProRail Nebraska. This group advocates for the increased use of passenger and freight rail use in the state of Nebraska. It has been a pleasure working with this organization, and I advise anybody interested in trains or rail companies to become a member.

This study was conducted for educational purposes and could have been treated as simply a theoretical idea. With my background in business, though, I wanted to treat this project as if I were actually going to start this business. All of the figures and price quotes found within this document are actual quotes from vendors, operators and merchants. Great detail was given to ensure that cost and revenue estimates were realistic and could be found on the market.

The idea of this service is not new. From the mid-1960s to the mid-1970s there was a Game Day Special that ferried passengers from Omaha to Lincoln for Husker games. This operation was owned and operated by a man named Bill Kratville. Although a popular service, it was forced to shut down for the same reasons as many other passenger operations during this time: increased freight traffic and increasing insurance premiums.

My initial idea was to study setting up a nonprofit organization or Limited Liability Company (LLC). This company could then purchase 11 bi-level gallery cars and have them refurbished. The operator would be Amtrak, with the cars running on the Burlington Northern Santa Fe (BNSF) track. This track is the most direct route between Omaha and Lincoln, and Amtrak already operates on it. Eleven was the number of cars chosen to accommodate the length of the Amtrak stations in both Lincoln and Omaha. The train would run twice before and after the game. There would be prepackaged food, drinks and beer sold on the train. This was the initial idea coming into this project. During the course of my research, some of these ideas remained the same, while others changed. My final conclusions and recommendations outline the results of my research, while also proposing exactly which of the above ideas will work and why.

Below you will find some of the main components of this project and how they came together. Although there are others details, such as employees, parking and concessions, below are the details specifically about the train and its operations.

After my initial discussions with BNSF, it seemed highly unlikely that private passenger operations could operate on their rails in any capacity. I personally met with the director of passenger operations, where he outlined his concerns and the limitations this operation would have on a BNSF track. The insurance liability issue was one of the largest sticking points. Another was that they would probably only allow Amtrak to operate on their rail, as that is the only operator with a mandate to do so.

Although not enthusiastic, the response I received from Union Pacific (UP) was at least less skeptical. They mentioned some of the same limitations on their rail lines. The biggest difference between the two lines from a business standpoint is that the UP line is about 30 miles longer than the BNSF line. This added length would increase the amount of fuel necessary to operate, thus increasing operating expenses. This also will increase the length of the trip for passengers. Although there are downsides, using the UP track is what I proposed in my paper.

The rail cars that would be used are old Metra bi-level gallery cars that can hold about 150–160 passengers each. These cars have been found advertised on online rail equipment brokerage sites, D.F. Barnhardt and Associates and Ozark Mountain Railcar. Bathrooms exist on about half of the cars, with the installation of bathrooms necessary on the rest. The interior and exterior of the cars would be refurbished to varying degrees depending on condition. The costs of refurbishing the cars will be offset by corporate sponsorship of each car. There are many large

companies in Omaha and Lincoln who would enjoy the opportunity to advertise directly to more than 3,000 passengers each game day. During the off-season, the cars would be stored at a private siding in Council Bluffs.

Since using the UP track is being proposed, using the current Amtrak stations in Omaha and Lincoln are not absolutely necessary. There are two options for loading in Omaha, the Amtrak station on the BNSF line or directly on one of the two UP lines. One of the UP lines is a main transcontinental line and would not be feasible. The other line is directly south of the Durham museum, and I am told, only used sporadically. For the Lincoln offloading stations, the Amtrak station is a good choice, as this will unload passengers directly next to the Historic Haymarket District. The downside to this is that the train will come from the north and have to cross the main tracks to approach the station. Another option, and the one I proposed, is to use an existing siding on the far north track directly north of Memorial Stadium. This siding is currently only used by the Capital Bridge Company and is located directly east of the pedestrian bridge that empties out next to Memorial Stadium. There is a small warehouse owned by the University of Nebraska-Lincoln that abuts the track now. I proposed purchasing or leasing this building, thus providing a place to safely offload passengers as close to the stadium as possible.

As the BNSF track is not being used, it is not necessary to use Amtrak as the operator. Union Pacific was open to either operator, and because of this, another was found. Herzog Transit Services based out of St. Joseph, Mo., was chosen as the proposed operator. This company provides rail and transit services for several cities across the country. Contact was made with this company to investigate the feasibility of them operating this service. After researching their options, they decided that this is something they would be interested in running. They even offered their services to help in negotiations with UP. Using Herzog with UP track allows for more flexibility in our operations. With Amtrak as the operator, only one trip, with 15 cars, was going to be made before and after the game. With Herzog, two trips, with eleven cars, will be made, thus increasing the overall revenue.

Using Herzog as the operator has other benefits. When looking at the financial statements, the initial costs are less with Herzog as the operator, as fewer cars will be purchased initially. The overall cost of starting this business is estimated to be between $2 and $2.5 million. Although this seems like a great number, in the grand scheme of things, it is not. U.S. Bank was approached to secure financing for this project. The size of this loan qualifies it as a small business loan. Because of this, the bank requires 20 percent of the total start-up expenses to come from investor equity. With an estimated total start-up costs of $2.2 million, only $440,000 is needed to get this venture started.

The revenue from this operation will come from several different sources. The largest source will be from ticket sales. The online survey conducted for this project resulted in 90 percent of all respondents stating that they would use such a service. Although the cost of tickets will need to be examined further, 64 percent of all respondents said they would pay at least $30. For all revenue calculations, this amount was used. The amount of revenue for each game totals about $150,000. After expenses, there is a profit of approximately $50,000. The total profit of the business after paying investors a guaranteed 20 percent return is around $206,000 per year. I understand that some costs might change over time, but these are the number as they are today. Another issue to consider is that I might have totally forgotten to include a common business expense that will decrease the amount of profit. This is possible, though the financials have been checked quite extensively by both my client and me.

The atmosphere of the rail cars will provide something for everyone. Many of the passengers that ride this train will want to be loud, talk about the upcoming game and socialize with friends and family. Others, though, would rather ride the train in relative peace and quiet. One of the cars will be a dedicated quiet car where those that want to ride peacefully will have that option. Another car will be dedicated for families with young children, as those who bring their kids should be able to have the peace of mind knowing that their children will not be exposed to those who are enjoying the rolling tailgate party going on in other cars. Food and drink will be sold by employees walking up and down the train. Prepackaged foods, sodas and alcoholic beverages will be sold, providing an important revenue stream while also instigating the party atmosphere that is being sought for this operation.

The above research shows that, although requiring much coordination and hard work, a Husker game day commuter train is plausible. There are many moving parts to an operation like this, but having spent the majority of my free time for seven months working on this project, my research has shown me that this is a worthwhile project and should be explored further. Is somebody going to become fabulously wealthy running this operation? Probably not. But if run successfully, this service will quickly become part of the Husker lore and legend. Although using trains, this service is not a train business, it is an experience business. This service will provide a great Husker game day experience to all who ride it.

Although this article was written to tell you about my research, there are many more details that can only be found by reading through the full study. The report can be found by following links on the Husker Extra article that was written about it. For those of you who would like a copy e-mailed to you, please e-mail me your request. Despite the fact that this project was undertaken for educational purposes, I would love to see an operation like this get started.

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