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Saving a Railroad

Below you will find the various letters that went back and forth between concerned parties and the STB in order to save the route that we now call the Chesapeake & Indiana Railroad. Through the initial efforts of the Hoosier Valley Railroad Museum and subsequent involvement of various local businesses and government agencies, this 33-mile rail corridor has preserved rail access for several communities across a three-county area.

 


 

STB Decision May 14 2004

SERVICE DATE - LATE RELEASE

MAY 14, 2004

SURFACE TRANSPORTATION BOARD

DECISION

STB Docket No. AB-55 (Sub-No. 643X)

CSX TRANSPORTATION, INC.–ABANDONMENT EXEMPTION–
IN LAPORTE, PORTER AND STARKE COUNTIES, IN

Decided: May 14, 2004

By decision and notice of interim trail use or abandonment served on February 20, 2004, the Board granted a petition filed by CSX Transportation, Inc. (CSXT), for an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 10903 to abandon an approximately 32.97-mile line of railroad in LaPorte, Porter, and Starke Counties, IN. Before the decision and notice authorizing abandonment became effective, the Town of North Judson (Town) timely filed an offer of financial assistance (OFA) under 49 U.S.C. 10904 and 49 CFR 1152.27(c) to purchase the line.

By decision served on March 4, 2004, the Town was found financially responsible, and the effective date of the decision and notice authorizing abandonment was postponed to permit the OFA process to proceed. Subsequently, the Town filed a request that the Board establish the conditions and the amount of compensation for the sale of the line. Thereafter, in a decision served on April 30, 2004, the Board set the purchase price for the line at $1,974,041, and established terms for transfer of the line.

By letter filed on May 10, 2004, the Town indicates that it accepts the Board’s terms and conditions and acknowledges that it will be bound by them.

When a person offering to purchase a line accepts the terms and conditions set by the Board, the offer is binding. See 49 U.S.C. 10904 and 49 CFR 1152.27(h)(7). Accordingly, the sale will be approved and the petition for exemption will be dismissed.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

It is ordered:

1. Under 49 U.S.C. 10904, the Town is authorized to acquire the line.

2. Under 49 U.S.C. 10904 and 49 CFR 1152.27(h)(7), the petition for exemption is dismissed, effective on the date the sale is consummated.

3. This decision is effective on its service date.

By the Board, David M. Konschnik, Director, Office of Proceedings.

Vernon A. Williams
Secretary


Town of North Judson Accepts Terms & Conditions
May 10, 2004


May 10, 2004

By electronic mail By electronic mail
Vernon A. Williams, Secretary
Louis E. Gitomer, Esq.
Surface Transportation Board
Washington, DC 20423-0001 Washington, DC 20005


Re: Docket No. AB-55 (Sub-No. 643X), CSX Transportation, Inc. -- Abandonment
Exemption -- in LaPorte, Porter and Starke Counties, IN

Gentlemen:

This is to advise that Offeror, the Town of North Judson, Indiana, accepts the terms and conditions established by the Board in its decision served April 30, 2004.

Very truly yours,




Latest Notice 4-30-2004

34618
SERVICE DATE - LATE RELEASE APRIL 30, 2004
EB

SURFACE TRANSPORTATION BOARD

DECISION

STB Docket No. AB-55 (Sub-No. 643X)

CSX TRANSPORTATION, INC.–ABANDONMENT EXEMPTION–

IN LAPORTE, PORTER AND STARKE COUNTIES, IN

Decided: April 30, 2004

By decision and notice of interim trail use or abandonment served on February 20, 2004, the Board granted a petition filed by CSX Transportation, Inc. (CSXT), for an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 10903 to abandon an approximately 32.97-mile line of railroad in LaPorte, Porter, and Starke Counties, IN. The exemption was scheduled to become effective on March 22, 2004, unless an offer of financial assistance (OFA) was submitted under 49 U.S.C. 10904 and 49 CFR 1152.27(c).

On March 1, 2004, the Incorporated Town of North Judson (the Town) filed an OFA to purchase the entire line for $1,200,000. The Town’s $1,200,000 figure was developed by applying the value for track materials that CSXT had presented in its exemption petition—$1,050,500—and by adding the Town’s estimated land value of $149,450. On March 4, 2004, a decision was served postponing the effective date of the February 20, 2004 decision, and giving the parties until March 31, 2004, to reach an agreement for the sale of the line. However, the parties were unable to agree on the sale price, and on March 31, 2004, the Town filed a request pursuant to 49 U.S.C. 10904(e) for the Board to set terms and conditions of the sale.

On April 5, 2004, CSXT responded to the request to set terms and conditions. CSXT states that the Board should set the purchase price for the line at $2,431,288, valuing the track materials at $1,952,288 and the land at $479,000. The $1,952,288 figure for track materials is a substantial increase (86%) over the $1,050,550 value CSXT originally asserted in its petition for exemption filed in November 2003, which the Town used in developing its offer. CSXT claims that the difference is due to a sharp increase in the price of scrap steel during the past 2 years.

On April 8, 2004, the Town filed a motion to strike a portion of the evidence and argument in CSXT’s reply. The Town objects to CSXT’s new evidence of the increased value of the line (specifically, the value of the track materials), claiming that CSXT unfairly and prejudicially withheld this evidence until now. It also claims that at no time during their negotiations in March 2004 did CSXT inform the Town that CSXT intended to increase its calculation of the net salvage value (NSV) of the track.

On April 13, 2004, CSXT filed a reply urging the Board to deny the motion to strike, claiming it did not provide information regarding the increased value of track materials because the Town never requested this information. CSXT also contends that the reason it did not inform the Town of the increase during negotiations was due to the Town’s “intransigence” over the issue of land value, which prevented the parties from reaching the issue of the NSV of the track materials. The Town, in its motion to strike, explained that it focused on the value of the land because it believed that this was the only issue in dispute.

CSXT’s April 5, 2004 evidence regarding the increased value of the track materials was not fully documented. Therefore, without ruling on the motion to strike, a decision served on April 19, 2004, directed the parties to submit, by April 21, 2004, additional information and evidence (including supporting workpapers) regarding the value of track materials.

PRELIMINARY ISSUE

Although the Board disfavors a party’s later introduction of evidence that could have been presented in its initial pleading (particularly in OFA proceedings where the statutory time frames are short), the recent sharp increase in the price of scrap steel warrants consideration of the new evidence in light of the Board’s duty to set a purchase price for the line that is no lower than the constitutional minimum value. The Town’s motion to strike portions of CSXT’s April 5, 2004 response will therefore be denied.

The Board agrees with the Town that CSXT should have presented this information in its petition for exemption, or if it was not available at that time, then soon after the Town filed its OFA. CSXT’s claim that its failure to provide information on the increased price of scrap steel to the Town was proper because the Town never requested such information is without merit. The governing statute, at 49 U.S.C. 10904(b), requires the railroad to provide promptly to a party considering an OFA all pertinent information about the value of the line, not simply information that the party specifically requests. In addition, 49 CFR 1152.27(a)(3) requires the railroad in exemption proceedings to provide, upon a request for information by a party considering an OFA, “. . . at a minimum[,] the carrier’s estimate of the net liquidation value of the line, with supporting data reflecting available real estate appraisals, [and] assessments of the quality and quantity of track materials in a line . . . ” (emphasis added). The phrase “at a minimum” clearly indicates that all this information must be given to a party considering an OFA. The “request” referred to in 49 CFR 1152.27(a) simply refers to a party’s notification to the railroad that it is interested in purchasing the line and does not connote that the party must ask specifically for each type of information the railroad must provide. Moreover, the Town’s failure to specifically request this information is understandable because it reasonably believed that it was in agreement with CSXT regarding the NSV. Once CSXT intended to raise its estimate of the NSV, it should have provided the information to the Town.

Moreover, the Board is generally reluctant to take action that might encourage parties continually to file new evidence as economic conditions change. Here, however, notwithstanding CSXT’s failure to properly follow the OFA procedures, the Board is bound by 49 U.S.C. 10904(f)(1)(B) to set a purchase price no lower than the fair market value of the property, which is the constitutional minimum value. See 49 CFR 1152.27(h)(6). Therefore, in the unique circumstances of this case, the Board finds that it would be improper to reject the new evidence on scrap steel prices, as doing so could lead to the establishment of a purchase price that is inaccurate and below the constitutional minimum. Consideration of this evidence will not prejudice or disadvantage the Town, as it was permitted to file additional evidence, which will also be considered, to support its own assessment of the value of track materials.

Finally, on April 28, 2004, CSXT also filed a motion to strike the letter of Mr. Mark J. Belfiore, submitted as Appendix 1 to the Town’s April 21, 2004 supplemental filing on the ground that the quotes therein were not based on fair market value. The Town responded on April 29, 2004. The motion to strike goes to the weight the Board should accord the Town’s appendix rather than to its admissibility. Therefore, the Board will not strike the challenged letter or any references thereto.

TERMS AND CONDITIONS

Valuation and Evidentiary Standards. Proceedings to set conditions and compensation are governed by the provisions of 49 U.S.C. 10904(d)-(f). Under section 10904(f)(1)(B), the Board may not set a price that is below the fair market value of the line. In Chicago and North Western Transp. Co.—Abandonment, 363 I.C.C. 956, 958 (1981) (Lake Geneva Line), aff’d sub nom. Chicago and North Western Transp. Co. v. U.S., 678 F.2d 665 (7th Cir. 1982), it was determined that, in the absence of a higher going concern value for continued rail use, the proper valuation standard in proceedings for offers to purchase under section 10904 is the net liquidation value (NLV) of the rail properties for their highest and best nonrail use. NLV includes the value of the underlying real estate plus the NSV of track and materials.

In these proceedings, the burden of proof is on the offeror, as the proponent of the requested relief. See Lake Geneva Line, 363 I.C.C. at 961. Placing the burden of proof on the offeror is particularly appropriate in these proceedings because the offeror may withdraw its offer at any time prior to its acceptance of terms and conditions that the Board establishes pursuant to a party’s request. The rail carrier, on the other hand, is required to sell its line to the offeror at the price the Board sets, even if the railroad views the price as too low.

Because the burden of proof is on the offeror, absent probative evidence supporting the offeror’s estimates, the rail carrier’s evidence is accepted. In areas of disagreement, the offeror must present more specific evidence or analysis or provide more reliable and verifiable documentation than that which is submitted by the carrier. If the offeror does not present such evidence and/or documentation, then given the burden of proof, the Board must accept the carrier’s estimates in these forced sales proceedings. See Burlington Northern Railroad Company — Abandonment Exemption — In Sedgwick, Harvey and Reno Counties, KS, Docket No. AB-6 (Sub-No. 358X) (ICC served June 30, 1994), and cases cited therein. The Board addresses below the value of the track and materials, and the land.

Land. In its petition for exemption, CSXT included an exhibit in which the land was originally estimated at $719,400, while the Town, in its OFA, initially valued the land at $149,450. After inspection of the land and an analysis of rail corridor sales by its witness, however, the Town reduced its valuation to $25,700 in its request to set terms and conditions.

The Town’s analysis of the land was based on a comparison of two sales of rail corridors in the same counties as the rail line being assessed in this proceeding, one of which was on a line abandoned in 1980, the other in 1987. This approach, the Town claims, was accepted by the Board’s predecessor, the Interstate Commerce Commission (ICC), in Illinois Central Gulf R. Co.—Abandonment, 363 I.C.C. 866 (1981) (Illinois Central Gulf). Based on the experiences in 1980 and 1987, the Town asserted that CSXT would be able to sell only 5% of the right-of-way (ROW) involved here, specifically only 17.3 acres of land at a total value of $39,088. The Town then reduced this figure to reflect the timing of the sales, to account for the costs of real estate commissions and closing expenses, and to add a separate, unexplained 5% discount. After these reductions and rounding, the Town calculated that the NLV of the land is $25,700.

In its presentation, CSXT used an across-the-fence (ATF) methodology to value the fee simple portions of the ROW. (All other parcels of land were not included in the appraisal and thus were valued at zero.) Under the ATF methodology, the NLV of the land is determined by comparing the values of adjacent or nearby parcels of land (based on recent sales) to parcels on the ROW, then adjusting the amount to account for characteristics specific to this ROW. CSXT calculated the total value of the fee simple parcels at $1,161,815, then reduced this figure to account for timing (delays in sales), real estate commissions, and closing costs. CSXT then performed a discounted cash flow analysis, using an 18% discount rate (based on the risk seen in residential land development), to yield, after rounding, a final NLV estimate for land of $479,000.

Each party attacks the methodology and calculations of the other. The Town claims that CSXT’s ATF methodology is flawed because there are physical differences between parcels that make up a railroad’s ROW and the adjacent parcels. The ROW is graded and has a 3-foot high embankment, which would result in additional sale preparation costs. The Town also argues that cinders used to make the embankment on which the line sits taint the soil, preventing efficient crop growth and thus lowering the land value further. CSXT responds that, although it did not include the cost of clearing and removing the embankment, it also did not include in its estimate of the NSV the amount of compensation it would receive by selling the ballast ($3,000 per mile), which would offset the cost of removing the embankment to prepare the property for sale (and the Board agrees with this approach). CSXT also argues that the Town’s claim that cinders have irreparably damaged the soil is unsupported by any evidence and that this argument should be given no weight because the Town’s witness is not a qualified expert in the areas of chemistry or agronomy.

CSXT argues that the Town’s methodology of comparing the sale of previously abandoned rail corridors to this transaction is inaccurate. Those sales occurred 23 and 17 years ago, and there is no evidence that the land in those corridors has the same characteristics as the ROW in this case. CSXT also challenges the Town’s claim that only 5% of the property that makes up this ROW would be marketable. According to CSXT, the reason so few parcels from its former ROWs were sold is that it did not own most of the land there in fee simple, and thus, most of the land reverted to the adjacent landowners. Here, however, CSXT owns a large portion of the ROW in fee simple. CSXT also argues that the Town’s reliance on Illinois Central Gulf is misleading because the agency actually rejected the rail corridor comparison approach in the decision and, instead, relied on an appraisal that used a methodology similar to ATF.

Conclusions as to Land Valuation. Having carefully reviewed the parties’ evidence of the value of the ROW, the Board finds that CSXT’s evidence is the more accurate and reliable, and thus uses its valuation of $479,000. CSXT has properly employed and supported the ATF methodology, making appropriate adjustments to account for those parcels that were unlikely to be sold in a reasonable time and for the expense of real estate commissions and closing costs. The only unsupported aspect of CSXT’s appraisal—its assumption that 85% of the fee-owned land would be sold in a reasonable time—has been accepted by the Town and used in its analysis, and therefore, the Board will accept this figure as well.

CSXT is correct that the Board has relied on the ATF methodology in most OFA proceedings where it has been asked to set the terms and conditions, typically over methodologies that compare sales of former rail corridors. In these cases, the Board held that the highest and best non-rail use of the land was to sell it to adjacent landowners, a process that the ATF methodology tries to replicate. In any event, the Town’s attempt to use previous rail corridor sales as the basis for its valuation is unavailing, as the previous sales do not involve comparable properties. As CSXT has explained, there were few willing purchasers for the parcels that made up its previously abandoned lines because CSXT did not own many of these parcels in fee simple, and thus the adjacent landowners were able to reclaim the various parcels without having to repurchase them. Here, by contrast, CSXT does own many of the parcels in fee simple and therefore would be able to resell the land. As the Town has not shown that there would be a lack of willing purchasers for this line, its reliance on previous sales is inapt.

Finally, the Town has not provided any evidence to support its assertion that the particular parcels that could be sold here would be less productive agriculturally. Even assuming, however, that this land would be less valuable due to damage to the soil, the Town has not provided any evidence of the extent to which the value of this land should be reduced. Without such evidence, the Board must accept the rail carrier’s valuation.

Based on the evidence of record, the Board sets the value of the land at $479,000.

Track Materials. In its petition for exemption, CSXT stated that the NSV for track materials was $1,050,550. Subsequently, the Town filed its OFA, in which it agreed to that price. In its response to the Town’s request to set terms and conditions, however, CSXT revealed for the first time that it now values the NSV of the track materials at $1,952,288, an 86% increase over its original valuation. CSXT claims that the cause for this increase is a sharp increase in the price of scrap steel that has occurred since 2002. While CSXT filed its petition for exemption in November 2003, it now claims that it had relied on scrap steel cost data from 2002 to develop its NSV figure.

CSXT submitted evidence, both in its response to the Town’s request to set terms and conditions and in its supplemental filing, in order to demonstrate that the price of scrap and reusable (or relay) steel has increased. Specifically, it claims that the price per ton of scrap steel has increased from $85 in 2002 to $235 in 2004. For relay steel, CSXT claims the value has reached anywhere from $397 (up from its original value of $366) to $225 (up from its original value of $180) per net ton, depending on the classification of the rail. Thus, CSXT now argues that the NSV for track materials should be set at $1,952,288.

Although it initially agreed to the NSV figure of $1,050,550 contained in CSXT’s petition for exemption, in its supplemental evidence, the Town now argues that the NSV should be reduced to zero, or, at most, to $715,613. The Town states that it obtained an estimate of $1,532,911 for track materials from A&K Railroad Materials, Inc. (A&K). It also obtained an estimate, from a salvage company, C&R Construction, of what it would cost to remove the track materials. The Town arrived at a calculation of a zero NSV because its estimated removal costs would exceed its estimated value of the track materials. The Town argues that, even if these removal costs were rejected in favor of CSXT’s own proposed removal costs ($817,298), the NSV of track materials would be reduced to $715,613.

Discussion of Value of Track Materials. As discussed below, on the basis of the supplemental evidence, the Board finds that CSXT has adequately shown that there has been an increase in the price of scrap steel. However, CSXT’s claim for an increase in the value of relay rail is unsupported. Therefore, the Board will use CSXT’s increased values for scrap steel, but not relay rail.

a. Scrap Steel

In its response, CSXT’s witness, William R. Pemberton values scrap steel at $235 per ton, an increase from the $85 per ton that CSXT used to develop its figure of $1,050,550 in its petition for exemption. In its supplemental evidence, CSXT submits a verified statement from its witness, Leonard Whitehead, who supports CSXT’s proposed increase. Mr. Whitehead provides three workpapers in support of his position. He provides two CSXT sales orders, submitted under seal, for the sale of scrap rail materials, one dated February 25, 2004, and the other dated March 4, 2004, but neither is probative. The February 25, 2004 order is for the sale of a certain amount of track feet of rail, but it is unclear whether the sale was for one rail or two. If the latter, the actual amount of rail sold would be double the amount of track feet stated in the order. The order also does not itemize the removal and transportation costs, thus making it impossible to tell how much of the sales price was actually for scrap steel. The March 4, 2004 sales order is also unreliable in that it states the price per gross ton but does not state the net weight of the steel being sold, making it impossible to convert the price into a value per net ton.

The third workpaper provided by Mr. Whitehead, however, appears to provide sufficient support for CSXT’s increase in the price of scrap steel. It is a table of scrap iron and steel prices published by the American Metal Market on March 15, 2004. This table supports CSXT’s calculation of $235 per ton (Pittsburgh No. 1 Heavy Melt steel is valued from $263 to $265 per net ton; Mr. Whitehead reduced this amount by $30 based on his experience with the scrap steel market).

The Town, in response, has provided a quote from one scrap dealer, A&K, as its only source of the price of steel, both scrap and relay. According to the Town, A&K would offer to purchase the steel rails, which it would use as scrap, for $1,532,911, or $85 per net ton.

CSXT has shown that the price of scrap steel has increased. The table from the American Metal Market is independent, reliable, and verifiable. In contrast, the Town provided only one source (A&K) in support of its $85 per ton valuation. Moreover, another reliable, independent source—Engineering News-Record (ENR) magazine—shows, in a March 22, 2004 published index, that the price of scrap steel ($220/ton) is much closer to CSXT’s valuation than that of the Town. Therefore, the Board will increase the NSV of the line to incorporate CSXT’s proposed increase for the price of scrap steel.

Reusable (Relay) Steel

Mr. Whitehead states that his valuations of the reusable steel are based on quotes received from three secondhand railroad materials dealers: Progress Rail, L.B. Foster, and Unitrac Rail Products. Mr. Whitehead then averaged together the three quotes to obtain his values. However, in CSXT’s April 5, 2004 response, Mr. Pemberton states that he derived his track materials value based on the average of quotes from four dealers (the three listed by Mr. Whitehead, as well as A&K). Despite this disparity, Mr. Whitehead and Mr. Pemberton arrive at the same average. CSXT provides no explanation as to why Mr. Whitehead relied on the three estimates while Mr. Pemberton had earlier relied on four, nor does it explain how its two witnesses arrive at exactly the same averages despite this discrepancy.

CSXT’s valuation of relay steel is also problematic in that the three quotes Mr. Whitehead used are retail prices (that is, the price at which these dealers sell the steel to third parties). However, the Board’s regulations and precedent require that it rely on wholesale (selling) prices to determine the NSV in OFA proceedings, not retail (purchase) prices. The Board has made exceptions in the past to allow the use of retail prices in cases where the railroad has clearly demonstrated that it will reuse the salvageable materials on its own line in the future. However, Mr. Whitehead states (at 10 of CSXT’s supplemental evidence) that he “used these quotes as the price that CSXT would sell the reusable material for in the open market,” indicating that CSXT does not intend to reuse these materials. Because CSXT has not based its evidence on wholesale prices for relay steel, the Board cannot rely on this evidence.

Because CSXT has not provided any reliable evidence supporting its claim of an increase in the value of reusable steel, the Board rejects it. However, the Town’s supplemental evidence regarding the value of relay rail is equally unreliable. As noted, the Town only submitted a quote from one scrap dealer, A&K, which cannot be considered a reliable source here, as it has also provided apparently different quotes to CSXT in this proceeding. Therefore, the Board will instead rely on the NSV originally stated by CSXT in its petition for exemption, and used by the Town in its OFA and request to set terms and conditions, as the best evidence of record.

Summary. The Board increases the NSV figure of $1,050,550 provided in CSXT’s petition for exemption by a total of $444,491 (the increase for the 14.6-mile segment is $33,927 and for the 18.37-mile segment is $410,564). CSXT has shown that the price of scrap steel has increased from $85 per net ton to $235 per net ton. The Board finds the NSV for all track materials to be $1,495,041. Adding the value of the land ($479,000), the total NLV of the line is determined to be $1,974,041. This amount shall be the purchase price.

In addition to the compensation specified herein, the Board imposes the following OFA terms: (1) payment is to be made by cash or certified check; (2) closing is to occur within 90 days of the service date of this decision; (3) CSXT shall convey all property by quitclaim deed; and (4) CSXT shall deliver all releases from any mortgage within 90 days of closing. The parties may alter any of these terms by mutual agreement.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

It is ordered:

1. The Town’s motion to strike is denied.

2. The purchase price for the line is set at $1,974,041, and the parties must comply with the terms of sale discussed above.

3. To accept the terms and conditions established here, the Town must notify the Board and CSXT in writing, on or before May 10, 2004.

4. If the Town accepts the terms and conditions established by this decision, the Town and CSXT will be bound by this decision.

5. If the Town withdraws its offer or does not accept the terms and conditions with a timely notification, the Board will serve a decision by May 20, 2004, vacating the prior decision that postponed the effective date of the decision and notice authorizing abandonment.

6. This decision is effective on the date of service.

By the Board, Chairman Nober.

Vernon A. Williams

Secretary


Excerpts from HVRM April Newsletter
CSX Line Project


HVRM submitted, on January 30 a Transportation Enhancement Program application with the Indiana Department of Transportation. The program uses federal highway funds and reimburses up to 80% of an approved project. The application was submitted for corridor preservation of the 33-mile CSX railroad line, known locally as the C&O line or Wabash Subdivision.

Recently updated, the application seeks $1,250,000.00 in INDOT Enhancement funds for the purchase of the CSX line, plus a local share of $750,000. It’s a complex project involving entities of business, government and non-profits. Each entity playing a role where and when it best fits the project.

Locally, the LaPorte County Farm Bureau Co-op with 2 facilities on the line, has been the financier of the process. The North Judson Town Board agreed to file an OFA “offer to purchase” the line with the Surface Transportation Board on March 1. Funds to pay the purchase price from a combination of sources. Negotiations with CSX are ongoing, and the process will go before the STB to set terms and final purchase price by the end of April. Financial support from LaPorte, Porter and Starke counties is being solicited as well as INDOT.


-UPDATE- April 22, 2004
Town of North Judson Response


Latest Filing with STB -CLICK HERE- (PDF required to view)
(-LARGE FILE-)


-UPDATE- April 8, 2004

Latest Filing with STB -CLICK HERE- (PDF required to view)
(-LARGE FILE-)


March 31, 2004

Latest Filing with STB -CLICK HERE- (PDF required to view)
(-LARGE FILE-)


SERVICE DATE – MARCH 4, 2004

SURFACE TRANSPORTATION BOARD

DECISION

STB Docket No. AB-55 (Sub-No. 643X)

CSX TRANSPORTATION, INC.–ABANDONMENT EXEMPTION–IN LAPORTE, PORTER AND STARKE COUNTIES, IN

IN THE MATTER OF AN OFFER OF FINANCIAL ASSISTANCE

Decided: March 3, 2004

By decision and notice of interim trail use or abandonment served on February 20, 2004, the Board, under 49 U.S.C. 10502, exempted from the prior approval requirements of 49 U.S.C. 10903, the abandonment by CSX Transportation, Inc. (CSXT), of its 32.97-mile line of railroad in the Western Region, Chicago Division, Wabash Subdivision, extending from milepost CF 0.63, at LaCrosse, to milepost CF 15.23, at Wellsboro, and from milepost CI 212.55, at North Judson, to milepost CI 230.92, at Malden, in LaPorte, Porter and Starke Counties, IN, subject to trail use, public use, historic preservation, and standard employee protective conditions. The abandonment authorization was scheduled to become effective on March 22, 2004, unless an offer of financial assistance (OFA) was filed on or before March 1, 2004.

On March 1, 2004, the Incorporated Town of North Judson (the Town) timely filed an OFA under 49 U.S.C. 10904 and 49 CFR 1152.27 to purchase the entire line for $1,200,000.

An OFA to acquire a line for continued rail service need not be detailed, but an offeror must show that it is financially responsible and that the offer is reasonable. See Conrail Abandonments Under NERSA, 365 I.C.C. 472 (1981). As a government entity, the Town is presumed to be financially responsible. See 49 CFR 1152.27(c)(1)(ii)(B). The Town is thus found to be financially responsible.

The Town’s offer is less than CSXT’s estimated valuation of $1,769,950 ($1,050,550 for the track materials and $719,400 for the land). The Town states that its offer is based on $1,050,550 for track materials and $149,450 for the market value of the land. According to the Town, CSXT did not provide adequate support for its land value because it did not submit the original acquisition documents to verify the land it owns in fee and the land for which it has only a railroad easement, and did not provide any appraisal of the land. The Town has estimated that the land for which CSXT has marketable title has a value of $149,450. Consistent with 49 U.S.C. 10904(c) and 49 CFR 1152.27(c)(1)(ii)(C), the Town has explained the basis for the disparity between its offer and the carrier’s estimate of the purchase or acquisition price.

Because the Town, a financially responsible entity, has offered financial assistance, the effective date of the decision and notice authorizing the abandonment will be postponed.

Any person filing a request to set terms and conditions must pay the requisite filing fee, set forth at 49 CFR 1002.2(f)(26), which currently is $16,800. An original and 10 copies of the request should be submitted along with the fee, in an envelope bearing the docket number of this proceeding, along with the words “Attention: Office of Proceedings, Request to Set Terms and Conditions” in the lower left hand corner.

Appeals to this decision are governed by 49 CFR 1011.2(a)(7). Any appeal must be filed within 10 days of the service date of this decision and will be heard by the entire Board.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

It is ordered:

1. The effective date of the decision and notice authorizing the abandonment is postponed to permit the OFA process under 49 U.S.C. 10904 and 49 CFR 1152.27 to proceed.
2. If CSXT and the Town cannot agree on the purchase price, either party may request the Board to establish the terms and conditions of the purchase price on or before March 31, 2004. If no agreement is reached and no request is submitted by that date, the Board will serve a decision vacating this decision and allowing the abandonment authorization to become effective.
3. This decision is effective on its service date.

By the Board, David M. Konschnik, Director, Office of Proceedings.

Vernon A. Williams
Secretary




February 16, 2004
Position Statement to Indiana Department of Transportation – Rail Section


Hoosier Valley Railroad Museum is an advocate for the preservation of the railroad corridor. HVRM hopes that its efforts will bring people and agencies together to help preserve, maintain, foster and promote economic benefits through the sustentation of this railroad corridor. Most importantly, HVRM is an advocate for a viable mainline rail connection, to be maintained. Whether that is a connection at Wellsboro or a new connection at Thomaston with NS or even Hanna with CSX, all possibilities should be explored. To continue current rail service, to the current on line customers, the connection at Wellsboro must be maintained. Once the corridor is preserved from abandonment, additional options could be explored for connections at other locations; opening up additional routings, market opportunities, and possible “corridor” cost reductions.


February 11, 2004
Local Meeting


Representatives from HVRM, the Starke County Development Foundation and District 17 State Representative Steven Heim got together on December 23 to discuss the potential abandonment of the CSX line into North Judson. This meeting led to another meeting held on January 16, at the LaPorte County Farm Bureau Co-op facility at Malden. Representatives of the co-op and other interested parties were brought up to speed on the subject and it was decided to move forward and work towards preserving the 32.97 mile railroad corridor.




January 6, 2004
Rail Map


  csx_abandonment_map1-gif.gif
Above map shows the affected trackage, with the highlighted lines showing route miles to other connecting roads. NS at Thomaston and NS/CSX (former PRR line) at Hanna.




January 2, 2004 New Update


SERVICE DATE - JANUARY 2, 2004

SURFACE TRANSPORTATION BOARD

WASHINGTON, DC 20423

ENVIRONMENTAL ASSESSMENT

STB DOCKET NO. AB-55 (Sub-No. 643X)

CSX Transportation, Inc. – Abandonment Exemption –
in LaPorte, Porter, and Starke Counties, IN

(Selected Excerpts from report)

Traffic

CSX states in its application that a total of 797 carloads were moved on the line during the base year (calendar year 2002). This traffic included 24 carloads shipped by Bruder, 447 carloads received by LCFB, and 326 carloads shipped via the interchange by TPW. Using a rail-to-truck conversion factor of 4 trucks per railcar, SEA calculates that on a per day basis, if all the rail traffic is diverted to truck traffic, the abandonment could generate an estimated 3,188 new trucks per year (6,376 truck trips assuming an empty backhaul). This equates to approximately 27 trucks per day being added to area roads during a 240 workday year. This increase will not exceed the Board’s thresholds of an increase of more than 10 percent of the average daily traffic or 50 vehicles a day on any affected road segment [49 C.F.R. 1105.7(e)].

Other Comments

The National Geodetic Survey has advised us that two geodetic station markers have been identified that may be affected by the proposed abandonment.

Porter County submitted comments stating that the proposed abandonment would have an adverse effect on the economy, as well as the local quality of life. The County further stated that abandonment of the line could increase truck traffic on area highways, including SR 49.

The Hoosier Valley Railroad Museum, Inc. (Museum), a non-profit railroad museum located in North Judson, submitted comments stating that potential future benefits to the local economy and tourism would be lost if the line is abandoned. The Museum stated that it has the ability and desire to establish a tourist train operation and requested that consideration be given to alternatives that may allow the continued existence and potential use of the line.

Footnotes
(1. Because 2002 is the most recent complete year of data, SEA is using 2002 as the base year.

(2. The conversion factor is an estimate used to calculate the rail to truck conversion of varied commodities.

(3. 240 workdays result when weekends and holidays are subtracted from a 365 day year.



December 28, 2003

Porter County Highway Letter
PDF Version of Letter (Click Here)

COUNTY of PORTER

HIGHWAY ENGINEERING


ROADS BRIDGES DRAINAGE
1955 SOUTH STATE ROAD 2
VALPARAISO, INDIANA 46385

D. W. SCHELLING, PE. COUNTY ENGINEER
L. D. SIMPSON ASSISTANT COUNTY ENGINEER
R. D. RIDDELL FIELD OPERATIONS ENGINEER
C. F. ALBERTSON UTILITIES INSPECTOR

(219) 465-3574
FAX: (219) 465-3569




December 5, 2003

Natalie S. Rosenberg, Counsel

CSX Transportation, Law Department
500 Water Street, Speed Code J-150
Jacksonville,Fia 32202


Re: STB Docket No. AB-55 (Sub-No. 643X),
CSX Transportation, Inc.
Abandonment in LaPorte, Porter and Starke Counties, Indiana

Dear Ms. Rosenberg:

Porter County feels that it is unfortunate that CSX Transportation is looking at abandonment of the rail lines between LaCrosse to Wellsboro and between North Judson to Malden in the above mentioned Indiana Counties. The Malden location in Porter County is also the location of the LaPorte County Farm Bureau Co-Op. Farming is a very important part of Porter County economy and the closure of this railroad line would certainly have an adverse affect on the local quality of life. The transfer from railcars to motor carrier will greatly increase the heavy loads on the two lane highways in this area. I understand that each grain railcar is equal to 3 1/3 semitrucks and fertilizer and hydrous ammonia is equal to 4 trucks. This would likely result in an additional 1400 trucks on the highways in this area. This will definitely affect SR 49 and other roads. I have no personal knowledge of the Co-Op operation. The docket dated October 31,2003 indicates a decrease in railcars for 2003, but it should be noted that the year has not ended yet and the soy bean crop yield was very low this year.

It should be pointed out that there is the Hoosier Valley Railroad Museum, Inc. in North Judson. This organization purchased property in January 24, 1997 to have a connection to the outside world. This property evidently connects to the tracks that are proposed for abandonment. Enclosed is a newsletter ITom1997 that discusses that issue. Perhaps a local agency in Stark County could request STP Transportation Enhancement Federal funds to help this museum. It is out of our jurisdiction. Please consider keeping both tracks active.


Sincerely,


David W. Schelling

cc: Commissioners, Vernon A. Williams, Tom Beck, file







December 18, 2003

The Leader


Heim Seeks Federal Help In Stopping NJ Abandonment

State Representative Steven Heim (R-Culver), is seeking U.S. Senator Richard Lugar and U.S. Representative Chris Chocola’s help in appealing CSX Corporation’s petition to the Surface Transportation Board (STB) to abandon the railroad line from North Judson in Starke County to Malden in Porter County and Wellsboro in LaPorte County.

In a letter Rep. Heim recently sent to both Congressmen, he explained the value of this line to rural northwest Indiana and the impact its abandonment would have on local economies.

"The North Judson industrial park is served by the railroad, and maintaining rail access for this area is vital economic development issue." Rep. Heim said. "Without access to a rail line, local officials will be at a great disadvantage in their attempts to attract new employers into the park. Federal law governing abandonment ‘specifically directs the Surface Transportation Board to consider whether the abandonment will have a serious, adverse impact on rural and community development.’ I believe that the proposed abandonment would have such an impact."

In addition, Rep. Heim wrote in his letter, North Judson is home to the Hoosier Valley Railroad Museum, a showcase dedicated to the rich cultural and economical history of the nations railroads. Abandonment of the CSX line would leave the museum isolated from the nations rail network, which would significantly limit or jeopardize the museums ability to preserve a unique part of American history.

"Rural Indiana has suffered economically during the recession," Rep. Heim said. "Losing access to America’s rail network would be a serious blow to North Judson’s efforts to create a healthy industrial climate.




December 10, 2003


Mr. Vernon A Williams, Secretary
Surface Transportation Board
Mercury Building
1925 K Street NW
Washington DC 20006



Re: STB Docket No. AB-55 (Sub-No. 643X)
CSX Transportation, Inc – Abandonment
32.97 mile Wabash Subdivision, Chicago Div.,
LaPorte, Porter and Starke Counties, Indiana


Dear Secretary Williams,


Hoosier Valley Railroad Museum Inc., a not-for-profit operating railroad museum located in North Judson, Indiana, (Starke County) wishes to weigh in on the above matter before your board. It is the position of HVRM that all due consideration be given to alternatives that may allow the continued existence and potential use of the railroad line in question.

Once the railroad line is removed, all future potential economic and tourism benefits of the railroad line will be forever gone. Hoosier Valley Railroad Museum and the rural North Judson community will lose a practicable and economic mode of transportation, isolating the area from any type of development and usage that the railroad line might afford. Many of our rural communities are forever doomed to achieve their full potential when the “railroad” option of transportation is forever removed.

No railroad traffic now originates out of North Judson, due to the discontinue of service and recent abandonment authority on the JK Line Inc., (Docket No. AB-847 Sub-No. 1X) (Docket No. AB-856 Sub-No. 1X) (Between North Judson and Monterey in Starke and Pulaski Counties, IN.) There is however, the establishment of a new industrial park in North Judson. Hoosier Valley Railroad Museum has the abilities and desire to establish a tourist train operation over a segment of the railroad line, but most important is the desire to see a “railroad” connection to the outside world remain a viable option.

North Judson being on the eastern leg of the railroad line, there are currently two customers on the western leg of the rail line, Bruder Fertilizer, Inc., at LaCrosse and the LaPorte County Co-op grain facility at Malden. The railroad line crosses two Class 1 railroads on its northern leg, one being Norfolk Southern at Thomaston, and one of CSX’s other lines at Hanna, before continuing northward another 6 miles to a CSX mainline connection at Wellsboro. There exist alternative potential connection-interchange points with other mainlines along the railroad line. The possibilities exist to operate a leaner, but yet viable railroad asset for the whole area in question.

Thank you,


Mark W. Knebel
Secretary, Board of Directors
Hoosier Valley Railroad Museum