City of Cincinnati intends to sell Southern RR for $1.6 billion
The City of Cincinnati has entered into an agreement to sell the 337-mile railroad it built in the 1870s to Norfolk-Southern for $1.6 billion:
https://www.wsj.com/articles/norfolk...=hp_lista_pos3 This is a crazy moment in U.S. history as one of the great anomalies in municipal and railroad history is about to vanish. It would be like if the Green Bay Packers were sold by their namesake city to typical scumbag owners and the team up and moved to Milwaukee. The railroad's lease didn't pay the City of Cincinnati very well for its first 100 years. Everything changed around 1987 when the City was awarded a large payout and much higher annual payments. Currently the City is earning about $25 million annually. The sale would place $1.6 billion in a trust fund. The sale is contingent on a public vote. Already, the who's-who of local agitators have taken shots, and lawsuits are imminent. Opponents are already suspicious of the issue being placed on a special ballot or at least the spring 2023 primary ballot, which nobody pays attention to. |
Lots of details in this article - unfortunately it will be behind a paywall for most of you.
It's interesting to see that when and if the sale fails, resolution of the matter will move to an arbitration process. The sale is still dependent upon passage of an Act by the Ohio General Assembly, plus approval of the Cincinnati electorate. https://www.bizjournals.com/cincinna...n-railway.html The Business Courier has obtained letters between Norfolk Southern and the railway board and its representatives over an 18-month period detailing their offers and counteroffers, a process that resulted in the trustees agreeing to sell the railroad for $1.6 billion. [...] While the city and Norfolk Southern were able to agree on a sale price, the correspondence show a wide gap between them on the starting lease price – $65 million for the city, $35.16 million for the railroad. If the sale fails, the negotiation is likely headed for arbitrators and a convoluted process to determine what the final lease price would be. In order for the sale to go through, the Ohio General Assembly must approve legislation, city voters must agree to the sale and federal regulators must give their OK. The deal has faced early turbulence in the General Assembly. The city completed the 337-mile railroad, which runs to Chattanooga, Tenn., in 1880 as an economic development tool and way to provide a key north-south rail line. It is used to ship freight today. The railroad is operated under a lease agreement with Norfolk Southern, which leases the railroad from the city. |
Keep us in the loop please.
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Please let the sale fail so that Amtrak can get a lease to run trains between Cincinnati and Chattanooga
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So interesting.
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For context, here is a map of the railroad soon after its completion: https://hosting.photobucket.com/imag...080&fit=bounds What's interesting about the strategy back in the 1860s and 70s is that they choose to build directly between Lexington, KY and Chattanooga, through the rough topography of the heavily forested Cumberland Plateau. The alternative was to build a shorter railroad from Lexington to the completed railroads in Knoxville, through similarly difficult terrain, but that would have added significant overall distance to reach southern farmland and a port on the Gulf of Mexico. FFWD to the 1960s, and I-75 was built between Lexington and Knoxville, not Lexington and Chattanooga. Incredibly, modern machinery made it possible to deflect to Knoxville with a distance penalty of just 15 additional miles. If you are familiar with I-75 in Kentucky, it blasts straight through the rolling terrain. Obviously, the climb up Jellico Mountain is a big, old-fashioned climb, but aside from that, the expressway is pretty tame. For the Cincinnati Southern RR to serve as a modern passenger line connecting Ohio and Atlanta, they'd need to build a new passenger railroad bypass in the windiest 20~ mile stretch south of Danville, KY. This would avoid conflicts with freight trains and enable passenger trains to maintain a much higher speed than what's possible on the hilliest part of the line. |
Wow - read that diss of Louisville, halfway down:
https://hosting.photobucket.com/imag...080&fit=bounds |
I wish that I could copy & past this entire article, since it's quite interesting. How do you value something with no comparable sales? It turns out that N-S and an outside consultant used two alternate routes owned by Norfolk Southern to help value the Cincinnati-owned railroad. The curious detail is that one of them has been unused since the mid-1990s (Cincinnati to Portsmouth, OH). This means that Norfolk-Southern has kept this railroad around but unused for nearly 30 years in anticipation of these negotiations!
If you have a subscription to Business Journals, you will be able to read this: https://www.bizjournals.com/cincinna...ue-varies.html Here is the article's most interesting passage: Quote:
https://railfandepot.com/product/nor...vine-volume-1/ |
This is indeed a fascinating look into the US railroad industry.
About the "Peavine Route" - I thought abandoned railroads are supposed to revert to the state (if fee-simple ROW) or adjacent landowners (if the ROW is an easement). In the Chicago area, several railroad segments are kept in private hands by running a short excursion train or hi-rail truck once per year. This lets them claim the railroad is still "active" and lets them vest their rights. |
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This quarry is the last customer on the line: https://www.google.com/maps/place/Pe...16zL20vMHlzZDI There used to be a pile of gravel dumped on the tracks a half mile east of teh quarry to mark the end of the functional part of the line. It used to be visible on Google Earth but now I'm not seeing it. Here is the physical severance of the east end of the line in Portsmouth, OH: https://www.google.com/maps/place/Pe...16zL20vMHlzZDI A recent wrinkle in the history of this semi-abandoned line was the 2022 announcement that Purina will be investing $500 million into a pair of pet food factories on this line. One of the two will be served by rail. So a small amount of new rail traffic is coming to the line, but not enough to motivate reactivation of the dead part of the line. https://www.bizjournals.com/cincinna...ood-plant.html |
The issue will be decided by voters in about five weeks.
In the meantime, there has been a full court press by various local politicians, including the current mayor, who is a sad yes-man: https://hosting.photobucket.com/imag...720&fit=bounds https://www.cincinnati.com/story/new...e/70968356007/ |
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Here is a good synopsis by the local NPR affiliate:
https://www.wvxu.org/local-news/2023...ale-ballot#one Unfortunately, The Cincinnati Enquirer has already been bought and paid for and are treating the city's ownership of this "old" railroad as a joke. Also, the synopsis misses the fact that the city moved to build the railroad in order to compete with the L&N (literally, the Louisville and Nashville, not the branches of the L&N), which was a fast and direct route between its namesake cities, and by extension, Chicago and Atlanta. It's no exaggeration to say that the entire history of the middle of the United States would be a bit different without this railroad, as Louisville would be somewhat larger and Cincinnati would be somewhat smaller. |
Significant organized opposition to the railroad sale has appeared in the last month.
The Cincinnati NAACP is urging its members to vote no: https://hosting.photobucket.com/imag...720&fit=bounds Another group is saying Vote No because the proceeds ought to pay reparations to the descendants of black residents who were displaced by the construction of the interstate highways. https://www.wcpo.com/news/local-news...ial-wealth-gap https://hosting.photobucket.com/imag...720&fit=bounds |
Norfolk-Southern is now getting desperate to motivate the sale by suggesting that there is a water quality issue that can only be resolved by citizens voting to sell their railroad to it...
https://hosting.photobucket.com/imag...720&fit=bounds You can't make this stuff up. |
Local communist party opposes the sale:
https://hosting.photobucket.com/imag...720&fit=bounds https://hosting.photobucket.com/imag...720&fit=bounds |
it should be kept, but isnt it better off with freight?
i dont see much of an amtrak ridership to make it worthwhile. as it stands for the foreseeable future, that is. if amtrak starts to expand routes greatly as is the hope and if the three Cs ohio route ever gets built, then it would be great. |
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-the biggest climb on the entire run between Michigan and Florida would be the Ohio River Bridge and 2+ mile climb immediately south of it. This section is double-tracked but the railroad often lets northbound trains idle for hours while awaiting slots in the very large yard immediately north of the bridge. This is also where the Amtrak station is, so there would be a big problem with keeping the downhill track clear for passenger rail. -there are several single-track tunnels in southern Kentucky. |
A youtuber with 200k followers made a video on this issue:
https://www.youtube.com/watch?v=SaBB0Qzb-Ik&t=1s https://hosting.photobucket.com/imag...720&fit=bounds Also, here are some signs around town: https://hosting.photobucket.com/imag...720&fit=bounds https://hosting.photobucket.com/imag...720&fit=bounds |
Sell it to Amtrak,
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