Corridor Capital Moves Into Historic Chicago Railroad Building

April 7, 2015

547 W. Jackson Blvd. was “Birthplace of the American Streamliner”

 

For immediate release
April 7, 2015

Contact: F.K. Plous
(312) 205-1060

CHICAGO (April 7) — Corridor Capital LLC announced it has moved its Chicago headquarters into 547 W. Jackson Boulevard, a hallowed address in the U.S. railroad industry.

Designed by Marshall & Fox, the same architects who designed Chicago’s Blackstone and Drake hotels, the 15-story white terra-cotta skyscraper is located at West Jackson Boulevard and South Clinton Street, facing the southwest corner of Chicago Union Station.

The building’s railroad heritage stems from its ownership more than its location. Currently owned and occupied by Metra, the Chicago region’s six-county commuter railroad, 547 W. Jackson was opened in 1911 as the headquarters of the Chicago, Burlington & Quincy Railroad and served in that capacity until 1970 when the Burlington merged with the Northern Pacific Railroad and the Great Northern Railway to form the St. Paul-based Burlington Northern.

“Decisions made at 547 W. Jackson in the early 1930s changed the course of railroad history in North America,” said Corridor Capital Chairman James E. Coston. “That’s the kind of atmosphere in which we want to grow our company. We plan to resume the development of the American passenger train that the Burlington Route pioneered in 1934 with its first lightweight, stainless-steel ‘streamlined’ train, the Zephyr.”

Where the new American passenger train was born

Coston said it was at 547 W. Jackson that Burlington President Ralph Budd broke away from the risk-averse railroad industry of the time by deciding to use technological innovation to reverse a dramatic drop in passenger revenues.

“The Burlington was being hammered by the Depression as well as by the New Deal’s highway-building program,” he said. “Passenger traffic was off by 70 percent.”

While most railroad CEOs had become gun-shy after 30 years of brutal federal rate regulation and 12 years of federally subsidized highway building, Budd believed a sleeker, faster, more aerodynamic type of passenger train would lure travelers back to his railroad.

He found his solution in Philadelphia, where a distant relative of his that he had never known about had discovered a way to weld strong, lightweight stainless steel into sleek, silvery trains.

“Ralph Budd hired the The Edward G. Budd Company to build a lightweight passenger train, and he hired another startup in Cleveland called Electro-Motive Corp. to install a diesel engine and electric traction motors in it,” Coston said. “Both solutions were radically innovative — what today would be called ‘disruptive technologies.’

”And they worked,” Coston said. “Passengers came flocking back to the Burlington.”

A train named for a Greek god

Because the Burlington ran from Chicago to the Rockies and used as its slogan “Everywhere West,”
Ralph Budd dipped into his classical education and named the new train the Zephyr, after Zephyrus, the Greek god of the west wind.

When engineers tested the train’s aerodynamic shape in a wind tunnel they confirmed that streams of smoke blown at the locomotive’s teardrop-shaped nose were flowing smoothly along the surface of the train in solid lines without being broken up by drag. They pronounced the train “stream-lined,” and the national media dubbed the Zephyr a “streamliner.”

On May 26, 1934, the Burlington launched the Zephyr with a 13-hour-and-5-minute “dawn-to-dusk dash” from Denver to Chicago that climaxed with a public welcome at the Century of Progress exhibition on the city’s lakefront. The train had covered 1,015 miles at an average speed of 77 miles per hour. Depression-stressed Americans saw the Zephyr as a harbinger of economic recovery.

“The media went wild, and the U.S. rail industry switched over to streamliners for all principal passenger trains,” Coston said. “Diesel power replaced steam, lightweight streamlined cars replaced the old heavyweights, and most of the trains started going faster, especially in the flat Midwest, where 100-mph-plus speeds became common. The passengers started coming back.”

Federal policy dooms private initiative

But the streamliner boom began to bust at the close of World War II when the federal government began making large amounts of money available to states to expand their highways and to cities to build new commercial airports. But no federal money was available for railroad infrastructure. As private businesses, railroads were expected to find their capital in the private markets.

Streamliner development had decades of new progress and breakthroughs ahead of it, Coston said, but the market rates for private capital were too expensive to permit the railroads to fund the high-speed tracks they needed to compete with the federal air and highway programs.

“So the passengers drifted away,” Coston said. “People perceived air and highway travel as steadily improving while passenger-train development was stagnating.”

As U.S. streamliner development stopped, the initiative passed to the Japanese, who opened the first true high-speed railroad, the 125-mile per hour Shin Kan Sen, in 1964.

Coston said now that federal money is available for privately owned railroads that host government-sponsored passenger trains, it makes sense to resume the interrupted streamliner movement and bring the American fast-train concept to its “highest and best use.”

“Amtrak already is operating 97 miles of track at 110 miles per hour on the 284-mile Chicago-Detroit route, and late next year another 132 miles of track owned by Michigan will be opened, cutting Chicago-Detroit running times from 5 1/2 hours to about 4 hours,” he said.

“In three or four years Chicago-St. Louis, also a 284-mile route, will be a 4-hour trip as well,” he said. “Both of these routes are going to be overwhelmed by passenger demand. The existing trains are selling out already. The millennials love to travel by train.”

And Corridor Capital has the trains

What’s Corridor Capital’s role in the resumption of American streamliner development?

“Rolling stock,” Coston said. “We own more than 50 of the best passenger cars that were built just before the ‘last hurrah’ of the streamliner movement, and we’re preparing to rebuild them into state-of-the-art American passenger trains of the type that the states will be needing as their new higher-speed tracks come into service and begin attracting crowds.”

The cars, known as “Hi-Levels” for their pioneering high-capacity double-deck design, were built by the Budd Company for the Santa Fe Railway in the 1950s for use as luxury overnight coaches on Santa Fe trains connecting Chicago with California and Texas. The Hi-Levels were tendered to Amtrak at its startup in 1971. Amtrak gradually withdrew the cars from service because it lacked the funds to overhaul them. Most of the cars were sold off to private collectors in 2002.

“The Hi-Levels represented the apex of American streamliner design when they were built, and if the government’s highway and airport subsidies had not weakened the Santa Fe’s passenger service they ultimately would have been joined by a fleet of Hi-Level sleeping cars,” Coston said. “Amtrak engineers have certified them for 110-miles per hour, the same speed that key routes in the Midwest are being upgraded to today.”

Corridor’s plan is to “tube out” the cars down to their stainless-steel shells and “re-stuff” them with contemporary electro-mechanical, plumbing, HVAC, telecommunications systems and interiors, and sell or lease them to states that sponsor Amtrak corridor service, such as Illinois, Michigan, Missouri and California.

They’ll also be converted from overnight coaches with fully reclining sleeper seats for 72 passengers to contemporary daytime corridor coaches seating about 95 passengers.

The extra capacity states need, the extra room travelers want

“Don’t worry,” Coston said. “Even in the denser daytime configuration the seats still recline about halfway back and the seat pitch is deeper than in the first-class section of an airliner. Personal space is huge. We do not anticipate any knee problems. Plus the seats are so wide you can work at your laptop without worrying about confidentiality. Your seatmate is too far away to read your screen.”

The Hi-Level fleet also includes dining and lounge cars, which most likely will be converted to a lounge+business-class configuration.

“Demand for business-class seating already exceeds the capacity of the few cars Amtrak has available for these routes in the Midwest,” Coston said. “When the trains start going 110, demand will explode. That’s good news for the states that sponsor these trains because business-class revenues substantially reduce the size of the state’s subsidy for train service.”

Planned and packaged passenger trains

Coston said Corridor expects to be more than simply a supplier of rolling stock for the resumed generation of Midwestern streamliners.

“We are offering a package that includes maintenance, food service, promotion, ticketing, marketing, service planning and financing,” he said.

A “passenger-train developer”

“The railroads used to provide all those elements in a bundled package they created themselves, but the states that fund these daytime corridor trains today do not have the resources to replicate what the railroads once did, and neither does Amtrak, which is a political football that Congress refuses to fund adequately,” Coston said.

“So Corridor Capital has become a passenger-train developer,” he said. “We pull together all the elements needed to put a strong state-supported passenger train service on the rails. A state can come to us and get its trains — and its train service — in a package.

“We like to think that if Ralph Budd were alive today he’d do the same thing.”

-end-
F.K. Plous
Director of Communications
Corridor Capital LLC
312-205-1060

James E. Coston
Chairman
Corridor Capital LLC
312-205-1050

547 West Jackson Boulevard, Suite 220
Chicago, Illinois 60661-5717
312-205-1000, Main Number
www.ccrail.com

Corridor-Capital-Chicago-Headquarters-Move-April-7-2015.pdf

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