Rail authority pulls exemption for South Merced station as lawsuit, CEO exit shake project

The California High-Speed Rail Authority has withdrawn the environmental exemption it filed for a new station south of Merced, calling it a procedural step “prior to finalizing station locations,” state records show.

The Oct. 8 memo carries the same date as a lawsuit that seeks to stop the station from moving out of downtown. Less than three weeks later, CEO Ian Choudri resigned. The Mission Avenue site remains in the authority’s business plan, but state law still calls for a downtown station, and the authority says nothing is final.

At a glance

• The proposed site: About 130 acres of unincorporated land near Mission Avenue and Highway 99, about four miles from downtown
• What changed: The authority asked to pull its Sept. 4 environmental exemption, and the state posted the withdrawal Oct. 15
• What hasn’t changed: State law defines the Merced-to-Bakersfield line as including a downtown Merced station
• What it would take: The Legislature would have to change that law, the state’s high-speed rail inspector general says
• Merced’s position: City and county leaders say talking about the site doesn’t mean they support it

What the authority withdrew

On Sept. 4, the authority filed a notice of exemption for the “South Merced Station Project,” with platforms along the mainline, a station building, multimodal access and utility connections. The notice said the station didn’t need a new review, in part because it was adequately discussed in the earlier environmental study for the Merced-to-Fresno section.

The Oct. 8 memo from the authority’s environmental services director says the agency is “conducting additional internal review related to project planning and timing.” It doesn’t mention the lawsuit or say how long the review will take. The State Clearinghouse told readers Oct. 15 to disregard the notice.

What state law says

Senate Bill 198, passed in 2022, defines the Merced-to-Bakersfield segment as a 171-mile dual-track line “with a new combined station in downtown Merced,” connected to Amtrak San Joaquins and the Altamont Corridor Express.

The 2026 business plan, approved in June, proposes a south Merced station anyway. It says the site would improve access to UC Merced and Merced Yosemite Regional Airport and put off major costs and disruption to the city.

The state’s high-speed rail inspector general wrote in July that the move is “inconsistent with SB 198” and that the business plan itself acknowledges the law would have to be amended. As of July, the report said, the authority was negotiating with Merced and hadn’t made a proposal to the Legislature.

The report also said the plan’s map shows no Merced connection to either Amtrak San Joaquins or ACE, and that the authority has given no sign the south Merced station would be temporary.

What the move would save

Authority officials said in January that the site would save about $1 billion, The Merced FOCUS reported. The inspector general’s comparison of two cost estimates shows the Merced extension dropping by $757 million. The two figures may not measure the same thing.

Change in the Merced extension estimate	Amount
Less construction with a shorter line	-$551 million
Less track and train control equipment	-$201 million
Ground-level station instead of an elevated one	-$66 million
Updated solar power estimate	+$61 million
Net change	-$757 million

The inspector general said the savings at Merced and Bakersfield came from “planning to build less,” not from greater efficiency. The business plan lists the remaining downtown Merced line and station as unfunded, with no money appropriated.

Where Merced leaders stand

The Merced City Council voted 6-1 in January to support a “collaborative review” of the concept, The Merced FOCUS reported. Councilmember Fue Xiong voted no. The business plan describes the city and county as giving “conditional support” to working on a change to SB 198.

Local leaders have since drawn a sharper line. In an Aug. 26 letter, Mayor Matthew Serratto, Councilmembers Sarah Boyle and Shane Smith and Supervisor Josh Pedrozo said Merced must stay in the first phase of the project. They asked the state for a binding plan to deal with the effects of any move.

That plan would cover rail connections, public safety, infrastructure and economic impacts, along with who pays and when. It would also settle ACE service to Merced and completion of Campus Parkway and the Merced Loop. The city says joining the talks shouldn’t be read as support for moving the station.

If the state decides a different location is necessary, the letter says, it “must also accept responsibility for the transportation, economic, and infrastructure consequences of that decision.”

Pedrozo had told the rail board in June that the site would offer better UC Merced access, lower costs and less construction disruption, The Merced FOCUS reported. Councilmember Darin DuPont told the FOCUS in September the station should probably stay downtown unless the authority shows it will invest in the city.

The lawsuit

The Community Alliance for a Sustainable Economy and allied groups sued in Sacramento County Superior Court, according to the Los Banos Enterprise and The Fresno Bee. They argue the authority is acting on the move without the Legislature’s approval and wrongly exempted the site from environmental review.

The suit asks a judge to order the notice withdrawn and to suspend relocation work, the Enterprise reported. We haven’t reviewed the complaint itself. It isn’t clear how the authority’s withdrawal affects the case.

The authority has declined to discuss the lawsuit, citing its policy on pending litigation. A spokesperson told the San Francisco Chronicle before the suit was filed that no decisions have been made about the station or its location. The authority said the current contract solicitation includes a priced option for a downtown station.

Before the suit was filed, Smith told the FOCUS that a private group would have trouble showing it had standing to sue, because no station has been built or officially moved.

New leadership

Choudri resigned Oct. 28, and the board named state Finance Director Joe Stephenshaw to lead the agency on an interim basis, CalMatters and CBS Sacramento reported.

The resignation followed an inspector general report on nearly $600,000 in questionable consultant travel, according to CalMatters. Those reports don’t tie his departure to the Merced station, and they don’t say what Stephenshaw plans for the site.

What happens next

The business plan targets 2032 to complete the first operating segment. The inspector general’s July report lists a contract award for the Merced extension in late 2026 and a solicitation for the Merced station in spring 2027.

Sources: Notice of exemption and withdrawal records, State Clearinghouse. 2026 Business Plan, California High-Speed Rail Authority. Review of the 2026 Business Plan, Office of the Inspector General, High-Speed Rail. Public Utilities Code section 185033.7. City of Merced release and high-speed rail timeline. Reporting by The Merced FOCUS, the Los Banos Enterprise, The Fresno Bee, the San Francisco Chronicle, CalMatters and CBS Sacramento.