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Railroad on Virginia's Eastern Shore: next steps include sale of yard
Railroad operators on Virginia's Eastern Shore are moving forward with plans for a much different future after filing a petition with the federal government to abandon 49 miles of tracks.
Canonie Atlantic, the company that owns the Bay Coast Railroad, is advertising for a general manager and is putting up for sale the 40-acre rail yard property in Cape Charles, among other actions.
The duties of general manager since January 2018 have been carried out largely by board of directors vice-chairman Spencer Murray and Janice Williams, a Northampton County employee, according to Murray.
Murray's term on the railroad board and as a Northampton County supervisor ends in December.
The position will pay $50,000 to $60,000 a year.
Additionally, the board of directors at its August meeting authorized Murray to explore listing the rail yard for sale with a commercial broker, after negotiations with the town of Cape Charles to purchase or control the property broke down.
The Canonie board is recommending the town make zoning changes to enhance the property's value for development, according to Murray, who said the property's assessed value is $4 million.
In other action, lights and gates at railroad crossings have been disabled, "so there will be no additional delays from gates coming down or that kind of thing" on the unused tracks, Murray said.
Extend rail service to Parksley?
The Canonie board also heard a request from a Parksley businessman to extend rail service from Hallwood south to Parksley — a distance of around seven miles — in order to accommodate around 250 cars per year of grain.
Richard Lewis of Associated Grain, Inc. asked the railroad operators to consider extending service from Hallwood to Parksley, saying the company could guarantee 750 cars over a three-year period.
Canonie Atlantic has a 20-year lease with Delmarva Central Railroad for nearly 15 miles of track from Pocomoke City to Hallwood.
It also has a 20-year lease with the Buckingham Branch Railroad for the railroad's holdings across the Chesapeake Bay in Little Creek.
Both railroads are investing in the track and are seeking new customers, according to Murray.
Still, a Delmarva Central Railroad official said it would be "cost-prohibitive" to fulfill Lewis' request, which would necessitate upgrading nearly 7 miles of track.
It would cost around $3.4 million to bring the track between Hallwood and Parksley to standard, in order to allow trains to travel at speeds of up to 25 miles per hour, according to Cliff Grunstra, chief marketing officer for Carload Express and Delmarva Central Railroad.
The company already is spending more than $4.5 million to upgrade around 15 miles of tracks from Pocomoke to Hallwood, Gunstra said.
An alternative would be to expand operations in Hallwood to accommodate Associated Grains, Grunstra said.
"We would love to work with him to set up a trans-load in Hallwood," he said, adding, "We own and control property there in Hallwood, which is currently unused ... There's some opportunity there to develop that into a productive facility."
Associated Grain under the scenario would truck grain from Parksley to Hallwood, where it would be transferred to railroad cars.
"I think that makes the most economic sense," Gunstra said.
Still, Lewis in is not giving up on the idea of extending rail service to Parksley.
He said trucking grain to Hallwood and transferring it to rail cars there "would not be economically feasible" nor as environmentally friendly for the company.
He thinks the $3.4 million figure Gunstra gave to upgrade the tracks could be high.
Lewis' company since has hired a certified track analyst from Pennsylvania, who will spend two days walking the track in order to produce a report on its condition — and an estimate of the cost to bring it up to standard.
Lewis will present the report to the Canonie board, he said.
"Associated Grain ... for many years loaded many rail cars with grain going to different parts of the East Coast," Lewis said, adding, "I'm going to fight the good fight here."
Gunstra said installing upgrades in Hallwood to accommodate the business could take as little as under six months.
"We have most of the things you need for a trans-load — we've got the track, we've got the property, so it would really just be putting up a fence or putting in some lighting, getting the conveyor, shoring up the track to make sure it's in nice condition — really, that's all you need. It's not very complicated," Gunstra said.
"We are interested in developing business down there. That's why we are here — we want to grow the carload traffic on the Delmarva Peninsula overall — and we just have to make sure that we are doing it in a fiscally responsible manner, so we don't overextend ourselves and get ourselves in a position where we can't provide that service to everybody else," Gunstra said.
"If it's economically viable for us to extend the line further ... we would have loved to do that," he said, adding that the rail line, unfortunately, "had fallen into such a horrible state of repair ... It's a sad thing, but it's the reality we are facing now."
Canonie on July 15 filed a petition with the Surface Transportation Board to abandon just over 49 miles of the railroad, from Hallwood to Cape Charles, while it also explores the possibility of partnering with some as yet undetermined entity to transition the railroad line to a Rails to Trails program, in which it ultimately would become a multi-use trail.
The company likely will hear by around Nov. 1 about approval to abandon the tracks, Murray said.
The Canonie Atlantic board voted in May to pursue abandonment of the 49-mile stretch "as the first legal step toward 'rail-banking,'" Murray said then.
Repurposing the rail line as a trail would allow preservation of existing easements, including for broadband, and potential ones, such as for a sewer line and a natural gas line, according to Murray.
"The easements have economic value — and we recognize that," he said in July, adding that Canonie is continuing to work with the Virginia Department of Rails and Public Transportation, the Virginia Tourism Commission, the USDA and the U.S. Department of Transportation "in exploring any efforts to partner with a rails-to-trails partner." Carol Vaughn, Salisbury Daily Times, August. 22, 2019