When Gov. Jim Doyle announced in July that a high-speed rail line from Milwaukee would stop in Madison near the Monona Terrace Convention Center, Mayor Dave Cieslewicz saw vast potential for downtown.

The rail station was to be at the Department of Administration building on East Wilson Street, and Cieslewicz hired former city planning director George Austin to get to work on organizing a series of developments for the two blocks in front of it.

Those currently include a 52-year-old parking ramp in imminent need of replacement and the Madison Municipal Building, but Cieslewicz saw the rail station as a catalyst for a much larger vision, including a new, expanded parking ramp, a potential hotel to serve the convention center that would incorporate the Municipal Building, a bike parking facility, a multi-modal transit center, and a public market focused on local foods and goods.

"So, imagine this," Cieslewicz wrote on his blog in May. "You drive, ride your bike or take a bus to the new station. You grab some lunch at the public market or a nearby restaurant before you catch your train to Milwaukee. You spend an afternoon in Milwaukee doing business or visiting a museum or going to a Brewers game (if it's a ball game, the Brewers will win). You take the train back, enjoying the ride, maybe working on your laptop computer."

Later in September, innovative local restaurateur Chris Berge announced he would be converting the high-end Norwegian Restaurant Magnus into a more affordable, bike-centric restaurant, a move he said then was sparked by the advent of the high-speed rail station.

But plans for downtown have changed dramatically since then.

A centerpiece of Scott Walker's campaign for governor was a pledge to take the $810 million that the federal government pledged for the rail line between Madison and Milwaukee and use it for roads and bridges instead. Walker's election on Nov. 2 brought the issue to a head, and when he wouldn't back down, the U.S. Department of Transportation announced last week it would redirect the money to high-speed rail projects in other states.

So what does that mean for Madison?

Cieslewicz and other rail backers say it means at least a short-term loss of new jobs and economic boosts from travelers. More broadly, they fear that Madison and the rest of Wisconsin risk being bypassed by a form of transportation that some have called the next interstate highway system. At best, they say, plans for a high-speed rail line between Chicago and the Twin Cites through Wisconsin have been delayed indefinitely. At worst, they say it opens the door for a rail line between the two metro areas that skirts Wisconsin entirely, running from Chicago to Dubuque, Iowa, and then north through Iowa and southern Minnesota.

The reaction in Madison's business community is mixed. Some say the loss of rail is unfortunate, but not really dire, as they hope that Walker's administration will fulfill another campaign promise to bring an improved business climate to the state.

But as for that bike-centric restaurant planned by Berge, don't bet on it. Berge announced in early December that the Velo Bahn restaurant could not go forward without the rail station across the street: The business plan assumed that 20 percent of the restaurant's customer base would be rail travelers.

"It felt like sort of a really bleak financial picture" for the restaurant, Berge says, adding that Magnus will still close by the end of the year. "Basically, thanks to the vote by the GOP and Scott Walker administration, I'm going to terminate 45 jobs and $1.8 million in commerce per year."

Walker was undaunted in the face of a booming chorus of similar criticism last week. He declared the loss of rail funds a "victory" for the state and his opposition to "runaway government spending."

"As I said along the campaign trail, we didn't need and couldn't afford the Madison to Milwaukee rail line," he said in a prepared statement last week. "While I would have preferred to have the $810 million reallocated to repair our crumbling roads and bridges, I am glad that the transportation fund will not be on the hook for a minimum of $7.5 million of operating subsidies every year."

Still, there are some downsides to the decision that Walker chose not to mention. According to the Legislative Fiscal Bureau, the construction of the rail line would have directly created 1,100 jobs in the first year, 3,483 in the second year, 4,732 in the third year, and 1,542 jobs in the fourth year. In addition, the Talgo train manufacturing plant that located in Milwaukee to produce trains for the Midwest rail lines as well as the rest of the nation's high-speed rail system will now close in 2012, according to a company representative, and more than half of the 125 employees expected to be working at that time will likely be laid off.

For Madison, Cieslewicz says the loss of high-speed rail could have serious effects on the redevelopment of the two city blocks across from the proposed station. The city will have to build a new parking ramp as planned in the near future, but some of the elements of the city's plan that assumed a busy rail station would be present downtown, including the public market, convention center hotel and multi-modal transit hub, may be delayed or even scrapped.

"We were considering all those other projects independently before we learned about high-speed rail coming to the city, but then the high-speed rail station was a catalyst and centerpiece that pulled all those together," Cieslewicz says. "Without it, the projects still might work independently, but we've lost that impetus of" a half-million additional people stopping downtown.

"It's like making a cake and missing one ingredient," he says. "With the high-speed rail station, it makes all of these things much more viable. Without it, they still may happen, but they'll probably happen on a different time line."

Similarly, Susan Schmitz of Downtown Madison Inc. says her group of downtown business owners saw the rail station as a major boon for bringing in new customers, adding that the events of recent weeks have been disheartening to those business owners. Moreover, she says, the rail line would have connected Madison businesses and institutions, such as the university's Wisconsin Institutes of Discovery, to the global economy.

"That's such an amazing place and that's going to be an attraction to people all over the world," she says. "How are they going to get here and move around? Not everyone is going to rent a car. We need to think about being connected to the world."

In addition to benefitting the modern economy fueled by UW-Madison through bio-agriculture, stem cell research and nanotechnology, rail advocates are quick to point out what high-speed rail could have done for the region's traditional industries, from agriculture to tourism. Currently, agricultural and manufacturing freight moves on worn-down tracks between Madison and Watertown at a speed of 10 mph. Upgrading the tracks for high-speed rail would have allowed freight to move four times as fast.

As for tourism, some say it would take only a small fraction of Chicagoans coming up to Madison for a Badger game or an Overture performance to make a big economic impact.

"Just think about the Overture Center," says Ald. Chris Schmidt, who sits on the city's Transit and Parking Commission. "Just assume that every year, the train would enable 10,000 people to travel up to Madison to visit and catch a show. That's a tiny fraction of the Chicago population. Let's say each of them spend $150 on average. You're already at $1.5 million" injected into the local economy each year.

In addition to the immediate jobs and development impact of losing high-speed rail, some say the biggest effects on Madison and the rest of Wisconsin will be harder to measure, such as the effect of losing an additional transportation option or tarnishing the reputation of the state as a place to do business.

High-speed rail is "not just about Madison — it's about Wisconsin. It puts Wisconsin on the map as a connected place ...," Cieslewicz says. "It helps transform our image. Imagine not being on the interstate. Imagine it was the 1950s and connecting Milwaukee and Madison and Eau Claire and saying, ‘We don't want to be part of that.' Imagine how we would have been left out."

Steve Hiniker, director of the environmental group 1000 Friends of Wisconsin, adds that delaying the rail line could have serious consequences for the environment. High-speed rail lines promote dense, pedestrian-friendly development that allows people to get around without having to use their cars, he says.

"When you build a highway, you've determined the kind of transportation you can have: You can have a car. When you have a train, you get off the train at the station and you're on foot. In order to be successful, you have to have walkable destinations or a good transit system. Right now, we don't have a lot of either, so it's hard for people to see how it would work," he says.

Adding that type of development, however, may be essential for both the environment and the state's economy, he asserts. The reduction in vehicle emissions from reduced automobile use is significant, he says, while noting that studies show that up to 70 percent of Generation Y workers want to live in attached or small-lot housing, neither of which Wisconsin has a lot of, thereby limiting its ability to attract younger workers.

Train backers are convinced that high-speed rail will soon catch on in the U.S., but Jessica Guo, an engineering professor at the University of Wisconsin who studies transit and travel behavior, says she and other transportation professionals are "hopeful, but skeptical" of high-speed rail's potential in the United States, noting that it is currently more widely used in densely populated European and Asian countries. However, she says, with plentiful transit options to and from the high-speed rail stations and smart development planned nearby, high-speed rail could be what the United States needs right now.

"If we want to kind of shift people from driving or flying to rail, we need to make sure that the service is indeed very attractive," she says. "I think rail is a good thing if done right."

One thing that may also need to change for rail to be successfully built and operated are people's attitudes, she adds, noting the argument from many rail opponents that the money should be spent on roads.

"We're so accustomed to just getting into our car and driving, short or long distance," she says. "That's not going to change overnight. At the end of the day, it really has to be a very long-term investment to change technology, change people. If we don't even try, then it never happens. ... If we don't try to do something about this, the concern with air quality, with energy security, that's just going to worsen."

Many in the Madison business community, however, maintain hope that, regardless of the failed rail project, the Walker administration will improve Wisconsin's economy. Mark Bugher takes a nuanced view.

The director of University Research Park, a friend of Cieslewicz's and also a former Cabinet member for Republican Gov. Tommy Thompson, Bugher says he understands Walker's scrutiny of the line, conceding it was a hard decision.

"Wisconsin is a state that generally is a contributor state to the federal treasury and doesn't get its share of federal resources," he says. "That part of it would be painful, but this is a time in today's political and economic climate where you have to stand up and say the principle trumps the pain of sending this check back."

Bugher says he expects the main focus of the Walker administration, once in office, to be working on the state's budget and business climate. In particular, he says, Walker should focus on small businesses, recognizing that most jobs are created by those with fewer than 50 or maybe even 25 employees. While a train could have been an asset to the state, what's important to those businesses, Bugher says, is tax policy and the regulatory environment in the state, both of which he expects Walker to address.

Area business organizations such as Thrive and the Greater Madison Chamber of Commerce had written letters supporting the high-speed rail line both before and after Walker's election, but they don't say its loss will be devastating.

Sean Robbins, executive vice president of Thrive, which advocates for economic development in eight southern Wisconsin counties, says the group's position had been that any additional transportation mode fosters the growth of local economies in a region.

Still, high-speed rail is by no means the only way for Madison and the region to position itself as an economic force, Robbins says. In particular, he says his group wants to focus on retaining businesses and improving the business climate in Wisconsin, as more than half of all new jobs in the state come from existing businesses.

"We're not saying the business community gets everything all the time," Robbins says. But knowing that a city, county and state "want them here and want to be proactive to help them grow and set the conditions for them to add jobs to the state - just that relationship alone is great to make a difference."

What the future will bring for expanded passenger rail in Wisconsin remains to be seen. Some, such as Cieslewicz and transportation advocate Robbie Webber, have said they are concerned that turning down the rail money in Wisconsin could lead Minnesota to start planning to go around Wisconsin and choose a high-speed line to Chicago that goes through Iowa.

"It's not that much farther," Webber says. "Minnesota just wants to connect to Chicago and if they have to pass Wisconsin, they'll do it. ... It would be just as if there is no interstate."

Others, however, hold out hope that the Milwaukee to Madison to Minneapolis line will be funded by the federal government later down the road. Ald. Schmidt says the Obama administration's decision, like Walker's opposition to rail, are political positions that do not speak to the merits of the Wisconsin line, which was the only rail project in the American Recovery and Reinvestment Act to receive 100 percent federal funding. When and how much a future rail project gets funded by the federal government, however, is an open question after the state has turned down money once.

"It's also going to make it harder for us to achieve federal grants for transportation for any project," he says. "This is a state that threw away money when it was offered."

What makes the events of the past few months most frustrating for rail advocates, however, is having to wait for what they see as inevitable given the rising costs of gas and increased dissatisfaction with air travel.

"I am 100 percent convinced, without a shadow of a doubt, (the United States) will have a passenger rail system that is interconnected and well-used within 20 years," Hiniker says. "Wisconsin could have been an early adopter at no cost. It will happen and it will cost us in Wisconsin a lot more money. ... The mayor might be right; it may never be in Scott Walker's tenure, but he's not governor for life."