Economic Impact of the Sunshine Corridor

If you've lived in Orlando for the last several years, there's a good chance you've heard of the Sunshine Corridor, a proposed project that would finally connect Orlando International Airport (MCO) to the existing rail network. 

As a train-loving masochist and a current Finance student at the University of Central Florida, I wanted to take a closer look at this long-delayed project myself. In this post, I've put together a quick Cost-Benefit Analysis of the proposed investment to see whether it actually makes sense for Central Florida, fiscally and socially. 

Before diving into the numbers, I'll briefly talk about the history of this expansion, which has been is discussion in some form since 2015. The Sunshine Corridor is a comprehensive multimodal passenger rail improvement program designed to significantly increase mobility options for residents, workers, and visitors in the Central Florida. It leverages prior investments in SunRail, MCO's Terminal C expansion, and Brightline’s Miami to Tampa proposed rail program. The goal is to create a true east-west rail connection running from MCO to the tourism and employment centers of southwestern Orange County (International Drive and the Theme Parks). The project is currently structured as a joint venture between SunRail and Brightline, combining public commuter rail and the privately funded intercity rail. 

For my Cost-Benefit Analysis, I focus mainly on the link between MCO and the existing rail line, the least expensive proposal out of the five options. (Option 3A on the schematic)

I did my best to derive a solid conclusion from the best available data at my disposal (SunRail's Annual Reports, federal cost-benefit guidelines, case studies for behavioral assumptions, and standard externality values from the VTPI and NCTR) 

I'll start off by breaking down the potential benefits of the investment, particularly the widespread social gains that extend beyond the riders themselves and then compare them to the associated costs. 

1) Public Transit improves the physical health of a city's residents, due to the commute to and from a station or stop as opposed to a car that's most likely parked in your driveway or an apartment garage. This health effect can be quantified, and according to Victoria Transit Policy Institute, the monetary cost from reduced physical activity from a subpar transit system is $90.57 per capita. Using the population of Orlando Metro Area, about 2.9 million, that works out to a lost benefit of $262 million. 

2) Public Transportation removes the negative externalities from car use by the reduction of the total number of car trips. I'll use the Victoria Transit Policy Institute's guide on the cost of vehicle use per vehicle mile traveled and total all of the categories into one number for simplicity sake: $1.14 per vehicle mile. To apply this number, we'll use the average miles traveled per ride based on Miami, FL (the closest counterpart) to find the additional miles that would be driven if the Sunshine Corridor was not built. Based on data from Moovit Insights, the average miles traveled per ride in 2022 for Miami Transit was 6.7 miles. Thus, a reduction in the potential 2.5 million additional riders would result in 17.17 million miles lost in public transit travel. 

3) Lost trips that would be traveled by car. The best estimates I could find suggest the number for Florida would be as high as 80 percent, if 80 percent of the lost transit rides become car trips instead, then an extra 50.7 million car miles would be driven in Orlando in 2026, assuming that drivers and public transit riders travel the same distance for the same trip. A study I found estimated that the ratio of car miles traveled to transit miles for the same trip is 1.43, multiplying 50.7 million miles by 1.43, we get 72.5 million miles. At a cost of $1.14 per mile, increased car use would cost the public $82.7 million. Now these calculations are just for 2026 alone, over a full 30 year period with growing ridership, it would total to ~$578 million in Present Value terms.  

Here’s what I came up with over a 30-year analysis period. 

THE BENEFITS: Not exactly surprising, but from what I could gather, 70 to 80% Central Florida residents would rather drive than take the existing commuter rail line. And if each rail trip saves roughly 25 minutes per passenger, travel time becomes the single largest benefit. Reduced Externalities is another benefit at play and includes all of the variables that don't have a direct quantifiable cost. This plan would remove approximately 500 million vehicle miles from Orlando roads over 30 years, which is equivalent to taking 1,400 cars off the road every year. Now, fare revenue is a bit of a sore subject to Central Florida policy makers and tax payers, as SunRail loses about $35 per passenger. However it would benefit from it's current economies of scale due to the existing rail network, and would be able to produce about $270 million in net benefit, reducing the fiscal burden on local governments and offsetting the O&M in a significant way. Public Health Benefits is another obvious one: More walking, fewer gas emissions, less roadway exposure and improved air quality add up to $157 million. Combined societal benefits come out to $1.89 billion. 

THE COSTS: CapEx would equate to $400 million, pulled directly from Preliminary Cost Estimates on the FCRC Sunshine Corridor Update Presentation. Pretty modest by U.S standards, especially when compared to larger cities like New York City's MTA CapEx budget of $68 billion. O&M projected over 30 years came out to $718 million. Combined (Present Value) costs come out to $1.11 billion. 

My Cost-Benefit Analysis produced: Net benefits of $779,064,566, Benefit–Cost Ratio of 1.7, Consumer Surplus of $1.16 billion and Positive Externalities of $735 million. 

I know I compared to budget to the MTA but realistically, $400 million in CapEX is a tough pill to swallow for Central Florida taxpayers. After all, the State of Florida and the local counties involved do not have an extra $400 million lying around, especially since the Central Florida Expressway Authority commenced a plan for a new expressway (State Road 516) that is projected to cost around $550 million.

A few quick points I want to add, specifically on why Orlando needs this project but why it might fail anyway. The biggest opponents of this expansion are rental car companies, and I can speak to this directly because I previously worked for one of the largest rental brands at MCO. This rail line would directly cut into their business model. In a city where tourists can reach downtown or the theme parks by train, the demand for rental cars would inevitably drop. Fleet utilization would fall, prices would decrease, and profits would shrink. Naturally, this creates a strong financial incentive to lobby against the project. There is also a sentiment among many Orlando residents, who oppose public transit because they personally don’t use it and don't want to "pay" for it. They point to low farebox revenue and low ridership as evidence that transit doesn’t work. But if we collectively continue to think this way, Orlando will stay trapped in a never-ending cycle: low ridership -> low motivation to improve the system -> low fare revenue -> no improvements. This mindset fundamentally ignores the reality that nearly every transportation mode in the U.S. loses money, especially our public highways and expressways. A project like the Sunshine Corridor would structurally change how Orlando functions and grows. It would connect workers to jobs (specifically in tourism as it's our largest economy driver), reduce severe congestion on I-4 and the toll expressways, reduce car dependency, and just overall improve the one thing Orlando desperately lacks: MOBILITY.

To conclude, I genuinely believe the Sunshine Corridor would fundamentally transform mobility and connectivity in Orlando. It would offer residents and tourists a way to reach the airport, attractions, and job centers without relying on rental cars, expensive rideshare trips, or the Mears Shuttle. I'll admit I'm biased as I used to work at MCO, and although I loved the job, getting there without a car was nearly impossible. I lived too far from a SunRail station to reach it easily, and the Lynx bus didn't run anywhere close to my home, but even when I did try to use transit, the timing never lined up as the last northbound train left too early for my late shift.

Rant aside, I sincerely hope this project finally makes it past the study phase and gets implemented. The data backs it, the region needs it and frankly, Orlando deserves a transportation system that works for its residents, not just the tourists.