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North American High Speed Rail Group, LLC (Rail Group) is a Minnesota company which will develop,
construct, own and operate Electric, High Speed Rail (HSR) systems in the United States, with plans
to expand across North America. Rail Groups first project will connect Minneapolis and Rochester,
MN, and will be funded through a private offering of securities to domestic and foreign investors. The
project will be achieved in four stages. The first two, Stage 1 Proof of Concept Assessment and
Stage 2 Company Organization Planning are complete. Stage 3 HSR Concept Implementation and
First Funding Raise ($50,000,000) is in progress.
In Stage 3, Rail Group will prepare a detailed engineering analysis of construction cost complete
environmental impact studies, refine financial models, confirm its analysis of financial feasibility, do
strategic real estate planning, real estate acquisition, initiate community outreach, and plan the 2nd
Funding Raise. Finally, in Stage 4, Rail Group will prepare for the launch of the Second Funding Raise
anticipated to be up to $4.2 billion in equity and debt, undertake constructing and testing of the
elevated Minneapolis to Rochester HSR line, continue planning and developing Transit Oriented
Development projects (TOD), and launch Transformational Economic Development Projects. 1
Transit Oriented Development Projects and Transformational Projects will require separate and additional
financing.
2|Page
Executive Summary
Rail Group seeks to develop, construct, own and operate an elevated, electric HSR system along with revenueenhancing Transportation Oriented Development Projects and related Transformational Economic Development
Projects. Rail Group will use private financing from domestic and foreign sources to execute this plan.
The first HSR segment, internally identified as the Velos Project, will be an 84 mile state-of-the-art elevated
HSR line connecting the Twin Cities (near the Mall of America and MSP International Airport) and the Mayo Clinic
in Rochester, MN. The Velos Project will proceed in four stages intended to prove its HSR project concept,
create a corporate structure and strategy, refine its financial models and cost estimates, construct the HSR
line and begin its strategy for Transit Oriented Development and Transformational projects as outlined below:
Status: Complete
Technology assessment and selection of Chinese HSR technology the most advanced HSR
technology in the world which is supported by long-term US and Chinese business and
technology relationships.
Identified domestic engineering and construction firms to collaborate with Chinese counterparts
to Americanize Chinese electric HSR technology for construction and operation in the United
States.
Validated the elevated electric HSR system concept rending HSR advantageous, including:
o
Reduced construction cost and compressed construction timeline through the use of
uniform modular construction methods.
Elimination of the intersection of rail, highway and all other motor vehicle traffic, which:
(1) enhances logistical efficiency in construction and operation; (2) increases safety by
mitigating collision risks; and (3) minimizes disruption during construction and
maintenance.
3|Page
Planned to utilize State highway right-of ways where possible for elevated rail construction while
minimizing the foot-print impact of the rail line.
Obtained acceptance and approval by Federal, State, County and Municipal governments.
Advanced the long term vision of a mass transit system utilizing clean, electric powered HSR
technology that will expand transportation options for growing population without expanding
fossil fuel dependency.
Initiated the long range vision of an elevated, electric HSR system comprised of multiple
segments in multiple regions.
Status: Complete
Developed ongoing alliances with Minnesota transportation agencies and key professional
business entities possessing expert transportation, engineering, construction and operation
experience, as well as Minnesota companies interested in promoting Minnesotas economic
development.
Developed relationships with Chinas leading HSR technology companies and financial
institutions.
Refined the financial model to include the sources and uses of funds and prospective profit
centers.
Stage 3 Velos Project HSR Concept Implementation and First Funding Raise $50,000,000.
Status: In Progress
Rail Group will finance Stage 3 of the Velos Project by raising $50 million through the sale of
Series A Convertible Promissory Notes. Rail Group is inviting strategic partners to participate in
this initial targeted raise. Rail Group expects target investors to include:
o
Project Advocate Investors: These investors anticipate they will receive significant
potential benefits from the operation of t h e Rochester-Twin Cities HSR line. These
investors each have specific benefits they hope to gain in increasing the ease of
transportation between the Twin Cities and Rochester.
4|Page
Rail Group will finalize obtaining formal authorization from state and local government authorities to
transfer control of the Rochester-Twin Cities Passenger Rail Corridor Project for feasibility study and
first right of refusal for development of the corridor. The project be renamed upon transfer.
Immediately after receiving formal authorization, Rail Group will begin the preconstruction process to
build an elevated, electric HSR system using the most advanced HSR technology in the world. The
preconstruction process includes, but is not limited to:
Preparing a detailed engineering analysis of construction costs,
Rail Group will continue strategic real estate planning, and possibly begin real estate and/or real
estate rights acquisition,
Rail Group will continue coordinating with necessary Federal, State, county and municipal
authorities, and initiate communication with public groups,
Rail Group will begin strategic planning and proof of concept analysis of Transit Oriented
Development real estate projects. This may include inquiry and/or acquisition of real estate rights
and properties.
Rail Group will also plan and prepare for the Second Funding Raise.
5|Page
Stage 4 Velos Project Construction, Operation, Real Estate Development Strategic Planning and
2nd Funding Raise of up to $4.2 Billion.
6|Page
Rail Group will commence the Second Funding Raise in which Rail Group intends to raise up to
$4.2 billion dollars. Rail Group anticipates the Second Raise Funding will be comprised of the
following estimated amounts:
o
$1.4 billion dollars will be private institutional equity investment from United States
investors (this amount includes the $50M raised in the First Funding Raise,
$1.4 billion dollars will be private institutional equity investment from China investors,
Rail Group will associate with world-class global engineering and construction firms based in the
US that have the expertise, broad-scope capabilities, technical and financial resources to deliver
major infrastructure projects like the Velos Project.
Rail Groups US affiliates will collaborate with China engineers to integrate Chinas electric HSR
technology into the US, thereby leveraging Chinas HSR technology and expertise engineering
HSR systems globally while aligning with US companies with proven success completing large
infrastructure projects.
Customizing China HSR technology for construction and operation in the United States,
Establishing best practices for HSR construction and operation in the US,
Rail Group will obtain lease rights from the State of Minnesota, Department of Transportation, for
use of State right of ways for use as the project right of way.
Rail Group will also obtain right of way lease rights from property owners as necessary.
7|Page
Commence construction of the elevated HSR system between the Twin Cities and Mayo Clinic in
Rochester, MN.
Rail Group will leverage its strong relationships with US, Chinese and European specialists to
utilize decades of HSR construction and operations experience to efficiently and rapidly advance
the Velos Project.
Rail Group will execute on its Transit Oriented Development strategy including the HSR stations,
retail development, and other real estate initiatives. The Transit Oriented Development projects
will generate revenue prior to the HSR line becoming operational. Transit Oriented Development
Projects will require separate and additional financing.
Rail Group intends to negotiate and retain a significant equity position in Transit Oriented
Development for the benefit of its stakeholders.
Table of Contents
Business Opportunity ................................................................................................................................. 9
Company Overview .................................................................................................................................... 12
Industry Analysis ........................................................................................................................................ 15
Market Overview .............................................................................................................................................. 15
Consumer Needs.............................................................................................................................................. 15
Operational Cost Advantages ............................................................................................................................ 15
Consumer Perception ....................................................................................................................................... 16
The Mayo Effect ............................................................................................................................................... 16
Financial Plan............................................................................................................................................... 19
Transit Oriented Development. ......................................................................................................................... 19
Revenue Model ................................................................................................................................................ 20
Funding Requirements / Use of Funds............................................................................................................... 20
Long Term Strategy as an Operating Entity ....................................................................................................... 21
8|Page
Business Opportunity
This business opportunity results from the work completed in Stages 1 and 2, which positions Rail Group for its
first funding raise. This $50 million raise will enable Rail Group to validate its proof of concept assessment for
an HSR line in Minnesota. The opportunity combines a HSR system in Minnesota with synergistic real estate
development and business initiatives.
The State of Minnesota and the Minnesota Department of Transportation (MnDOT) has a high speed rail project
in their long range development plan, currently named Minnesota Zip Rail. In early 2015, the county rail
authority secured project leadership control of the corridor and has been collaboratively working with appointed
MnDOT to begin study the corridor. The Olmsted County Regional Railroad Authority (OCRRA) always planned
for a hand-off of the project and corridor to a private entity. After nearly a year of collaboration and legislative
support, OCCRA advised MnDOT that the projects best chance for success is as a privately funded project
approach by the North American High Speed Rail Group. Rail Group will benefit from the $2.3 million already
invested by the State of Minnesota in preconstruction studies. The result is a unique and significant prospect
for a privately funded infrastructure project in North America representing a long range investment opportunity.
Several projects in North America (including projects in California, Texas, Washington, and Florida) have
accepted Federal funds, thereby slowing their progress, incurring great delays, increasing project costs and
adding inefficiencies. Rail Group will avoid these market barriers and inefficiencies by accepting no formal public
financial support.
Rail Group intends to utilize HSR technology, which is already a proven global transportation system around the
world. Rail Group intends to Americanize this global technology and localize it to the American environment.
The deep and trusting relationships between Rail Groups leadership team and China businesses will facilitate
seamless management of the HSR project. Rail Group also has identified global engineering, construction,
technical and management services firms. Supporting the economics of the private investment Rail Group brings
to the table is a business model that includes real estate development as a differentiator from previous
transportation models.
China is positioned to offer cost efficient technology and the required financial support to build a robust
continental network. Rail Group, in addition to being an early market adopter, has a unique market approach
of following the national highway system where possible. By leasing air rights above the current highway
network, the company will provide the necessary ongoing infrastructure funds into State and Regional
Departments of Transportation to benefit other transportation initiatives.
Rail Groups integral partnership with China is a unique strength. China seeks commercial opportunities in
various world markets to use its expertise and market leading position to win high speed rail projects. China
holds the market advantage due to its combined strength in three areas: technology, cost advantage, and the
ability to finance projects. Rail Group has a significant opportunity to establish an equity investment
The funds will also be used for items, including but not limited to, legal and financial services, investment
banking services other professional advisory fees, as well as current operating expenses and accrued debt.
Investors participating in this initial offering may be invited to exercise their convertible notes for the next funding
event. Rail Group has prepared offering documents that fully document the offering and its risks.
Also during Stage 3 experts from Rail Groups China investors will review geological/footing samples, turn
radius measurements, conceptual station designs, tunneling and bridge requirements, and similar data to
determine a more accurate cost estimate. Details of the Use of Funds are in the financial pro forma.
The chart below generally reflects the use of funds:
10 | P a g e
15,000
14,500
5,000
5,000
4,740
2,500
1,500
1,500
260
50,000
Balance of Funding
When the feasibility studies are completed, Rail Group will begin Stage 4 Velos Project Construction, Operation,
Real Estate Development Strategy and Planning and 2nd Funding Raise of $4.2 billion. Rail Group estimates the
total construction cost of the Velos Project will be up to $4.2 billion.
$3,500
515
200
$4,215
Rail Group plans to raise up to $2.8 billion in equity in equal amounts of $1.4 billion from China investors and
US investors. Rail Group estimates obtaining financing up to $1 billion from sources including, loans from China
and US Banks, equipment financing, EB-5 and other investments. Rail Group projects real estate projects
completed before the HSR line is operational will add an additional $400 million.
$1,400
1,400
700
300
400
$4,200
Numerous leaders in Minnesota have already joined Rail Group transformation and regional alignment
conversations including: the Minnesota Department of Transportation, Minneapolis Airport Commission, Metro
Transit Authority, Greater MSP, Mall of America, Mayo Clinic, Expo 2023 Bid Committee, and the University Of
Minnesota Carlson School Of Management.
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Company Overview
Rail Group is a Minnesota limited liability company, which is taxed as a pass-through entity. Under various
circumstances the entity type or tax filing method may change. The company is newly formed in part to
cooperate with specific entities with strong interests in the establishment of HSR transportation for a variety of
specific and strategic reasons. Among those entities are the Mayo Clinic, Destination Medical Center, the City
of Rochester, the Metropolitan Airports Commission, the Mall of America, and the Expo 2023 Bid Committee.
The development of the first truly high speed rail corridor in North America will impact and enhance other MN
initiatives, including Greater MSP, the Mayo Clinics Destination Medical Center, the Mall of Americas growth
strategy, Metro Transits connectivity plan, the NCAA Final Four (in MN 2017), the Super Bowl (in MN 2018), and
Minnesotas bid for the 2023 Worlds Fair Expo.
China seeks commercialization and investment opportunities in the United States. Rail Group has a significant
opportunity to establish an equity investment opportunity by leveraging its Chinese relationships to secure a
favored business position to commercialize Chinese HSR technology in North America.
Rail Group will be responsible for the planning, design, building and operation of a North American high-speed
rail system beginning in Minnesota. Initially, Rail Group intends to focus on high speed destination rail projects
beginning with the Velos Project, an 84 mile end-point-to-end-point leg of future regional and national networks.
Rail Group expects the starting point of this project is located in the South Loop of the Twin Cities near the
Minneapolis/St. Paul International Airport (MSP) and Mall of America (MOA). Its southern endpoint is in
Rochester, MN, between The Mayo Clinic and the Rochester International Airport. This section of the Midwest
Corridor serves the passenger needing connectivity between the Mayo Clinic and both international airports. It
also provides the means for the thriving med-tech businesses in the Minneapolis metro area and medical
personnel associated with the Mayo Clinic in Rochester to collaborate and travel efficiently.
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Joseph Wang, Chairman of the Board, is an active international business leader with strong personal and
business relationships with various levels of government officials and company executives in China. As but one
example, he played a critical support role as a government consultant during Chinas ascension to the World
Trade Organization.
David Melander, Executive Vice President / International Coordination, is a business strategist
focused on international business development with particular expertise in establishing manufacturing
relationships for US companies in China using proprietary systems for costing, quality, licensing, and production
maturity.
Wendy Meadley, Chief Strategy Officer, is an Executive MBA-credentialed general management strategist
and global communications expert with broad-based experience working with multinational Fortune 500
corporations, including 3M and Microsoft as a consultant on their most innovative global programs.
Bill Goins, Advisory Board Chairman, is the Worldwide Account Manager for the Medical Industry at
Federal Express and a member of the State of Minnesota Freight Advisory Board.
Mark Fuhrman is the Deputy Commissioner of the Metro Transit Authority in Minnesota.
Mark Ritchie is Minnesota's recently-retired Secretary of State and sits on the Minnesota State Board of
Investments, the Minnesota Executive Council of Constitutional Officers, and the Board of Directors of
LifeSource.
Dale Wahlstrom is the past President of Life Science Alley, which is the worlds largest trade group in Medical
Devices, and previously held executive positions at Medtronic.
Chris Terry is the Director of Business Development for Knutson Construction where he manages and leads
13 | P a g e
Lynnette Slater Crandall is a leading expert on economic development tools and public-private
development projects, and a partner at Dorsey & Whitney LLP. Lynnette has served as counsel to the State,
County, and private companies on many public/private projects including the Twins Stadium (Target Field), the
Vikings Stadium, the Regional Rail Authority, and Destination Medical.
David Williams is the Chief Innovation Officer at the University of Minnesota, Carlson School of Management.
Prior to joining the North Star Initiative, he served as one of eight global advisors at the Microsoft Corporation
exploring 5-10 year out advanced technologies.
14 | P a g e
Industry Analysis
Market Overview Benefits of Partnering with China
China seeks commercial opportunities in various world markets to leverage its technology, competitive costs,
and financial strengths. It has invested heavily in research and development in high-speed trains with early
designs built on the foundation of collaboration with
Japanese and French partners. Billions of dollars have been
invested by the Chinese in designs exclusively produced in
China to advance Chinese HSR systems. In only ten years
China has built tens of thousands of kilometers of high speed
rail, connecting many of its major cities with fast, safe, low
cost transportation, and now has 800 train sets in operation.
Unlike fossil-fueled solutions (such as Amtraks Acela or other
traditional rail), elevated HSR can be powered by clean
electricity from renewable energy sources like wind and
solar. The proposed Velos Project between the Twin Cities and Rochester is planned as an elevated, all electric
system capable of speeds in excess of 230 mph while using existing or adjacent right-of-ways to existing
highways.
China offers the lowest cost option among worldwide HSR technologies, is in a very strong cash position in US
Dollars, and seeks opportunities to convert US cash
reserves into assets. The Twin Cities Rochester route is
the first opportunity to structure a project that is able to
take full advantage of Chinese HSR technology and
funding, and can be completed in a timely fashion.
Consumer Needs
An elevated HSR system between the Twin Cities and
Rochester has significant advantages over other available
means of transportation. This will be reinforced as
Rochester adds more jobs, more clinical facilities and
ancillary services as part of its Destination Medical Center.
Considering cost, time and convenience, an HSR system is a remarkably competitive mode of transportation.
Rail Group believes that it can obtain significant transportation market share as bottle necks on highways and
airports over this route cause travelers to turn to alternative modes of transportation.
alternative methods including solar, wind, and co-generation, further reducing HSR s carbon footprint.
Consumer Perception
The speed, convenience and comfort of HSR travel from the Twin Cities to Rochester compared to automobile
travel times and airport lines are primary factors which Rail Group projects will stimulate consumer preference
for alternative transportation via HSR for trips of less than 600 miles.
Every year, more than one million people from all 50 states and nearly 150 countries come to Mayo Clinic for
health care. International travelers are familiar with HSR trains and expect to see contemporary modes of
transportation associated with the advanced and technological health care in Rochester. Rail Groups
collaboration, communication and alignment with Mayos Destination Medical Centers growth strategy are
examples of its focus on social responsibility within its business model.
and/or retain new start-up biotech companies and capture business from other regions that are enticed by the
convenience of the HSR between the Twin Cities and Rochester.
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Rail Group uses the word Transform, to represent its overall HSR network and encompasses a composite
montage of related and future Transit Oriented Development initiatives and strategies.
At the heart of its business strategy is an operational business model focused on revenue generation.
Strategically, its execution stages capitalize wherever possible on route extension. This approach creates an
aggregated value to each destination along the network, and adds to the value of any ownership within its
Transit Oriented Development strategies (which in principle will apply to any line extension). The company plans
to build a national HSR system with a second leg from Rochester to Chicago. Representatives from Rail Group
have had conceptual discussions with representatives from the State of Wisconsin and key public and private
development organizations in Illinois, Ohio, Michigan, Nevada, Washington DC, and Washington who have
strongly welcomed collaboration and encouraged engagement in the HSR project.
Rail Group has been contacted by several other cities hoping to be included in a national HSR system. However,
in order to create the most value for the company, Rail Group intends to grow wherever possible by route
extension rather than by building non-connected routes, as each connection from point to point adds to the
value of any ownership in Transit Oriented Development projects. For example, the rail station in Rochester and
any connected real estate holdings held by Rail Group have the potential to significantly appreciate in value upon
completion of a line connecting Rochester to Chicago.
18 | P a g e
Financial Plan
Transit Oriented Development.
The current and fast growing trend of recognizing consumer lifestyles and creating desirable, vibrant business
communities is a key consideration of the Transit Oriented Development projects.
Factors driving the trend include:
Changes in family structures including empty nesters and more single person households;
Rail Groups Transit Oriented Development approach is to create and contribute to building business
communities that immediately support Mayo Clinics Destination Medical Center in Rochester. The selection of
the Rochester station location is intended to support the Metropolitan Airport Commissions gate-extension goals,
including plans underway by the University of Minnesota to extend their Medical School Campus offering to their
Rochester Campus.
Both the Twin Cities and Rochester endpoint stations will be integrated into vibrant communities with unique
landscapes. The Bloomington endpoint station is immediately adjacent to the Mall of America and the MSP
International Airport and its hotel ecosystem, while the Rochester endpoint station facilities the important multimodal community transit initiatives surrounding Mayo Clinics Destination Medical Center development project.
Key Considerations and Factors for the Bloomington Station TOD Project:
Extending the MSP International Airport to Rochester with a seamless/integrated customer first
experience;
Taking into account first and last mile considerations;
The planning, policy and regulatory framework of Bloomington, MN and Hennepin County;
Traffic and parking considerations;
Land acquisition; and
Multiple city, county, business and community stakeholders.
Key Considerations and Factors for the Rochester Station TOD Project:
Becoming part of the Mayo Clinic brand experience as a first touch point in Minnesota;
Extended station development footprint (one mile radius station development);
The planning, policy and regulatory framework of Rochester, MN and Olmsted County;
Commuter considerations including parking and traffic;
19 | P a g e
Transit Oriented Development is an integral part of Rail Groups overall financial strategy. The management
team intends to hire persons with extensive backgrounds in similar mixed-use development projects. They will
cooperate closely with partner developers selected based on financial commitments and specific expertise
relevant to the projects. Rail Group has secured cooperation with transportation industry experts already on the
Advisory Board.
Revenue Model
Rail Groups two primary means of generating revenue are HSR ticket sales and the retained equity positions in
Transit Oriented Development projects and related business initiatives.
Earnings from ticket sales between the Twin Cities and Rochester are reflected in pro forma financials. Estimated
ridership is based on data obtained from the Mayo Clinics Destination Medical Center, the Metropolitan Airports
Commission, the Mall of America, and the City of Rochester. Rail Group expects to cover its debt payments and
return a profit to the investors.
In addition, each station location offers prime development for hotel, retail, parking, and other development.
Each station is a captive market for travelers. Rail Group intends to negotiate and retain a significant equity
position for each development area, beginning with the area near the Mall of America and the station in
Rochester.
20 | P a g e
21 | P a g e
The information contained in this Business Plan is for informational purposes only and nothing herein
should be construed as a solicitation, recommendation or an offer to buy or sell any securities.
22 | P a g e
Appendix
Supporting Documentation
Appendix A: Financial Overview
Appendix B: Management Team
Appendix C: Board of Directors (Initial)
Appendix D: Advisor Board Members
Appendix E: Professional Counsel
Appendix F: Key Operational Processes
23 | P a g e
Distance: The financial analysis assumed costs associated with building 128 km of HSR and 2 stations. The
model assumes the use of existing right-of-ways with an elevated trestle. (Right-of-Ways will be confirmed
through the Stage 3 feasibility studies.) Rail Group plans to maximize the use of existing public corridors and
reduce costs associated with right-of-way acquisition; however, the company may be required to lease or
purchase land and/or air rights along the planned route.
Time to Complete: Construction was assumed to begin in March of 2016 and continue until December of 2022.
The model assumes six (6) months in Stage 3 (feasibility stage) and sixty (60) months in Stage 4 (construction
phase).
Construction Cost per KM: The model assumes a cost of $33 million per km resulting in a total cost for
construction of $4.2 billion. This cost per km input is the primary driver of the model.
Rolling Stock: The cost of the rolling stock is estimated at $200 million, and is included in the $4.2 billion cost of
construction.
Revenue Generation: Rail revenue generation w a s a s s u m e d t o begin in 2023. The financial model
assumed three major sources of revenue: (1) train fare, (2) parking, and (3) income earned from Transit Oriented
Development projects. Given the scope of this project, there are likely other transit-oriented projects that
would coincide with the construction of the rail line.
Ridership: The estimated ridership is based on data obtained from th e Destination Medical Center, the Mayo
Clinic, the Metropolitan Airports Commission, the Mall of America, and the City of Rochester. The model
assumes a 16 car train, with 56 passengers per car, equating to 896 potential passengers. The fare cost was
estimated at an average blended rate between $40 and $45 for a one-way ticket.
Operating expenses: Operating costs were estimated at $300 million. Major drivers of this include personnel
and professional costs (engineering, contracting, legal, and accounting, finance, etc.) a n d employee costs
24 | P a g e
Debt: The model includes two major pieces of debt: EB5 and other third-party debt. EB5 debt is estimated at $300
million, with take-down tranches of $60 million per year, beginning in 2016 at an interest rate of 4.5% and with
repayment over 5-years, beginning in 2023. Third-party debt was estimated at $700 million with the first draw of
$200 million needed in 2017 and is fully funded in 2021. No principal repayment was assumed on the third-party debt
and interest was assumed at 6%. We also believe that there will be equipment financing available from our technology
partners, however this wasnt assumed in the model.
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Total Equity:
Total Liabilities & Equity:
Members' Equity
Liabilities
Accounts Payable
Accrued Expenses
Other Liabilities
Stage I Investment
Stage II Loans
EB5 Debt
Total Liabilities:
Assets
Cash
Accounts Receivable
Other Current Ass.
Land
Net PP&E
Total Assets:
$
$
$
0.0%
$
$
$
720,664 $
26,813
747,477 $
26,813 $
26,813 $
781,718 $
781,977 $
259 $
0
0
259 $
747,477 $
19,500
15,000
781,977 $
2015
(15,809) $
1,458
1,458 $
0%
(14,350) $
1,087
260
4,020
8,622
302
60
14,350
2015
2015
(15,795) $
(15,000)
751,458
(4,224) $
46,313 $
245 $
50,292
50,537 $
26,813 $
19,500
46,313 $
2014
(4,224) $
292
292 $
0%
(3,932) $
226
40
940
2,674
32
20
3,932
0.0%
2014
2014
$ (23,479) $
50,292
$
$
Balance Sheet
Net Income
$
$
$
EBITDA
Operating Expenses
People Costs
Marketing
Professional Services
Facilities & Ops
Travel
G&A
Operating Expenses
Gross Margin
Revenue
Transp. Revenue
Non-Trans. Rev.
Total Revenue
Cost of Revenue
Gross Profit
Highlights
P&L (Income Statement)
Amounts in 000's
Financial - Forecast
1,180
288
960
231
409
60
3,128
0.0%
$
$
$
(425,378) $
747,477
322,099 $
2016
(5,378) $
(480,000)
60,000 $
775,890 $
836,599 $
259 $
450
0
60,000
60,709 $
322,099 $
19,500
15,000
480,000
836,599 $
2016
(5,828) $
2,700
2,700 $
0%
(3,128) $
2016
(304,584) $
322,099
17,515 $
2017
11,416 $
(576,000)
260,000
783,579 $
1,108,015 $
297 $
4,139
200,000
120,000
324,436 $
17,515 $
19,500
15,000
1,056,000
1,108,015 $
2017
7,688 $
11,400
11,400 $
80%
19,088 $
2,204
540
960
231
853
60
4,847
100.0%
- $
23,935 $
23,935 $
23,935
2017
287,583 $
17,515
305,098 $
3,583 $
(576,000)
860,000
2018
1,586,711 $
1,971,598 $
297 $
4,589
200,000
180,000
384,886 $
305,098 $
19,500
15,000
1,632,000
1,971,598 $
2018
3,133 $
20,100
20,100 $
81%
23,233 $
2,523
672
960
231
1,044
60
5,489
100.0%
- $
28,722 $
28,722 $
28,722
2018
794,775 $
305,098
1,099,873 $
775 $
(576,000)
1,370,000
2019
2,836,811 $
3,342,373 $
297 $
5,264
200,000
300,000
505,561 $
1,099,873 $
19,500
15,000
2,208,000
3,342,373 $
2019
100 $
23,025
23,025 $
81%
23,125 $
2,523
780
960
231
1,044
60
5,597
100.0%
- $
28,722 $
28,722 $
28,722
2019
(329,400) $
1,099,873
770,472 $
2020
(3,400) $
(576,000)
250,000
2,829,436 $
3,588,972 $
297 $
9,239
450,000
300,000
759,536 $
770,472 $
19,500
15,000
2,784,000
3,588,972 $
2020
(7,375) $
30,500
30,500 $
81%
23,125 $
2,523
780
960
231
1,044
60
5,597
100.0%
- $
28,722 $
28,722 $
28,722
2020
(349,625) $
770,472
420,847 $
2021
(23,625) $
(576,000)
250,000
2,802,061 $
3,815,347 $
297 $
12,989
700,000
300,000
1,013,286 $
420,847 $
19,500
15,000
3,360,000
3,815,347 $
2021
(27,375) $
50,500
50,500 $
81%
23,125 $
2,523
780
960
231
1,044
60
5,597
100.0%
- $
28,722 $
28,722 $
28,722
2021
(77,657) $
420,847
343,190 $
2022
18,343 $
(96,000)
-
2,751,177 $
3,766,490 $
297 $
15,016
700,000
300,000
1,015,313 $
343,190 $
19,500
15,000
3,388,800
3,766,490 $
2022
(50,883) $
67,200
55,500
122,700 $
42%
71,817 $
2,633
780
960
636
1,357
12,036
18,401
52.9%
141,845 $
28,722 $
170,567 $
80,349
90,218
2022
(26,438)
343,190
316,752 $
2023
33,562
(60,000)
2,669,648 $
3,624,852 $
297
14,908
700,000
240,000
955,205
316,752 $
19,500
15,000
3,273,600
3,624,852 $
2023
(81,530) $
115,200
55,275
170,475
31%
88,945
2,711
780
960
636
1,670
12,036
18,793
37.7%
257,202
28,722
285,924
178,186
107,738
2023
(17,952)
316,752
298,800 $
2024
42,048
(60,000)
2,596,893 $
3,491,700 $
297
14,510
700,000
180,000
894,807
298,800 $
19,500
15,000
3,158,400
3,491,700 $
2024
(72,755) $
115,200
52,800
168,000
33%
95,245
2,711
780
960
636
1,670
12,036
18,793
39.0%
263,502
28,722
292,224
178,186
114,038
2024
(38,373)
298,800
260,427 $
2025
21,627
(60,000)
2,503,927 $
3,338,127 $
297
13,903
700,000
120,000
834,200
260,427 $
19,500
15,000
3,043,200
3,338,127 $
2025
(92,966) $
115,200
52,800
168,000
27%
75,034
2,711
2,160
960
636
1,670
12,036
20,173
34.8%
244,670
28,722
273,393
178,186
95,207
2025
(33,091)
260,427
227,336 $
2026
26,909
(60,000)
2,416,044 $
3,189,836 $
297
13,496
700,000
60,000
773,793
227,336 $
19,500
15,000
2,928,000
3,189,836 $
2026
(87,883) $
115,200
52,800
168,000
29%
80,117
2,711
2,160
960
636
1,670
12,036
20,173
36.0%
249,754
28,722
278,476
178,186
100,290
2026
(21,609)
227,336
205,727 $
2027
38,391
(60,000)
2,339,798 $
3,053,027 $
297
12,932
700,000
0
713,229
205,727 $
19,500
15,000
2,812,800
3,053,027 $
2027
(76,246) $
115,200
52,800
168,000
31%
91,754
2,711
2,160
960
636
1,670
12,036
20,173
38.3%
263,160
28,722
291,882
179,955
111,927
2027
(16,177)
205,727
189,550
2028
43,823
(60,000)
2,268,678
2,921,650
297
12,675
640,000
0
652,972
189,550
19,500
15,000
2,697,600
2,921,650
2028
(71,120)
115,200
52,800
168,000
33%
96,880
2,711
2,160
960
636
1,670
12,036
20,173
39.4%
268,286
28,722
297,009
179,955
117,053
2028
Carlson School of Management and Arboretum. Her expertise spans numerous industries and technologies. Her
global digital strategy and communications planning includes advertising agencies, public relations firms,
technology and consulting firms and event companies. Meadley holds her project management certification and
is a published author and speaker in the areas of global digital communications and innovation strategy.
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Mark Fuhrman
Mark Fuhrman is the Deputy Commissioner of the Metro Transit Authority in Minnesota. An innovator in the rail
industry, his most recent achievement is leading the Twin Cities (MN) Green Line Light Rail project to successful
launch on time and within budget.
Mark Ritchie
Mark Ritchie is Minnesota's recently-retired Secretary of State. He is on the Minnesota State Board of
Investments, the Minnesota Executive Council of Constitutional Officers and on the Board of Directors of
LifeSource. Mark is an MBA graduate of the University of Minnesota's Humphrey School of Public Affairs and
Iowa State University. He currently chairs the citizen's committee working to bring the E x p o 2023 World's
Fair to Minnesota.
Dale Wahlstrom
Dale Wahlstrom is the past President of Life Science Alley, the worlds largest trade group in Medical Devices.
Prior to this position he held executive positions at Medtronic. Recently he has focused on working with the
Food & Drug Administration, scientists, and the medical device community to create faster, more rational
processes for the approval of medical devices with tremendous potential for life improvements.
Chris Terry
Chris Terry is the Director of Business Development for Knutson Construction where he manages and leads new
commercial construction business opportunities for the company. He is highly familiar with projects in the
Rochester area. Prior to his position with Knutson, he served as Vice Present at Think Mutual Bank.
David Williams
David Williams is the Chief Innovation Officer at the University of Minnesota, Carlson School of Management. Prior
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to joining the North Star Initiative, he served as one of eight global advisors at the Microsoft Corporation exploring
5-10 year out advanced technologies.
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HGA, Architects
HGA is an integrated architecture, engineering and planning firm that helps prepare its clients for the future. By
understanding their cultural and business needs, they help clients realize their organization's vision and potential
through responsive, innovative and sustainable design. HGA achieves this through multidisciplinary collaboration,
knowledge sharing and design investigation. HGAs founding principles include collaboration, aesthetic achievement
and client service since our founding in 1953. These criteria still inspire HGA today as architects, engineers, interior
designers and allied professionals work alongside each other from a building's inception through move-in to develop
solutions uniquely suited to each client.
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Geology
Community Change
Water Resources
Visual/Aesthetics
Cultural Resources
Noise/Vibration
Environmental Justice
Transportation Integration
Parks and Recreational Properties
Contamination/Haz Mat
Air Quality
Floodplains
Utilities
Economics/Business Impacts
Construction Impacts
Operations/Maintenance Impacts
NOTE: The project delivery team will utilize the initial results of the planned rail project for the Twin Cities to
Rochester MN corridor n a m e d Zip Rail Tier One Environmental Work as a starting point to transition into this new
model.
Preliminary Engineering
Preliminary Engineering (PE) is analysis and design work to produce construction plans, specifications, and cost
estimates of the preferred alignment. PE typically brings plans to 30 percent complete. PE builds upon the
technical information generated in the Environmental Review Process and is integrated with that process as
more information becomes available. Design issues include track alignment, station locations, Transit Oriented
Development integration, bridge types, park and ride facilities, and last mile considerations. PE also includes
engineering surveys, roadway impacts, ridership projections, and refining construction schedules and costs. A
Draft Conceptual Design Report, which is a narrative and visual description of major elements such as stations,
track location, and bridge types and locations, will be developed. During PE, a preliminary approach about how
to phase the project into smaller manageable pieces will also be developed.
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Typical Sections
Grading
Drainage
Structural
Roadways/ITS
Signing
Lighting
Utilities
30% Plans
ROW Engineering
Purchase Offers
Counter Offers
Relocation
Demolition (if necessary)
Because nearly all the rail corridor will be elevated above existing State highway right-of-ways, Rail
Group anticipates a much quicker and much less expensive right-of-way acquisition process than most
transportation projects usually encounter.
Design / Build Delivery
Design/Build (DB) is a project delivery system used in the construction industry. It is a method to deliver a project
in which the design and construction services are contracted by a single entity known as the designbuilder or
designbuild contractor. In contrast to "designbidbuild" DB relies on a single point of responsibility contract and
is used to minimize risks for the project owner, while reducing the delivery schedule by overlapping the design and
construction phases of a project. DB with its single point responsibility carries the clearest contractual remedies for
the owner because the DB contractor will be responsible for all work on the project, regardless of the nature of the
fault. In the HSR project delivery model, DB work will commence at the conclusion of the environmental review
process but will overlap with preliminary design work and ROW work as appropriate.
Key activities of the design build process will include:
100% Final Design Plans
Final Schedule
Environmental Monitoring
Permitting
HSR Construction
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Roadway/Bridge Construction
Safety/Security
Project Documentation
Project Controls
Value Engineering/Constructability
Testing / Deployment
Prior to operation, a detailed HSR testing program will be developed and implemented. Testing will begin after
the DB process is complete. The project will then move into an operations phase. Testing will be overseen by an
independent consultant to assure that all aspects of the HSR are safe and secure for the traveling public.
After testing is complete, HSR will be deployed and HSR passenger rail service will officially begin.
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