(The following story by George Ledbetter appeared on The Chadron Record website on July 6, 2010.)
CHADRON, Neb. — Nearly two decades after the Chicago Northwestern Railroad (CNW) closed up shop in Chadron, a new railroad company is bringing the Chadron rail-yards, and the railroad roundhouse back to life.
And principals in the new company say they see tremendous potential for niche railroad services in the community, based on the community’s location near a main Burlington Northern Santa Fe (BNSF) rail line, and the presence of a roundhouse that can handle repair and refurbishing of large railroad equipment.
“The railroad will never, ever, be what it was (in Chadron) but we have experienced people here and we recognize there are niches out there that we could service,” Terry Doyle, a former Chadron resident who worked for the CNW until shortly before it left Chadron and then became an official with the federal railroad administration, said in an interview Friday.
Doyle’s title is vice president of operations for the newly created Nebraska Northwestern Railroad, which recently acquired the Chadron yard and the track to Dakota Junction, where the line joins the Canadian Pacific (formerly Dakota Minnesota and Eastern) line between Crawford and Rapid City, S.D. In the same deal, NNR signed a lease agreement for the line from Dakota Junction to Crawford, as part of its plans to bring various kinds of rail equipment to Chadron for servicing and repair.
“There is significant potential,” NNR president Jack Nielsen said in the office that the company recently took over from West Plains Grain, owner of the Nebkota Railroad that had been operating in the yard under lease from DME/CP. “We are sitting on top of the Powder River Basin and we have the track.”
Coal trains from the Powder River basin pass through Crawford daily, the men point out. Most of the locomotives and much of the other equipment used by BNSF and other large rail companies is actually leased, not owned, Nielsen noted. That equipment, including locomotives and other items, has periodic servicing and repair needs, and at the end of its life cycle is often put up for sale to firms that refurbish and resell the useable pieces.
Nielsen, who is also a principal of Diamond Hill Farms in Alliance and once worked as a train-master, said he has a strong affinity for railroads, and believes that the nation was shortsighted in shifting so much of its shipping to trucks while letting rail lines be abandoned.
“My feeling has been and continues to be that steel wheels on steel rail is by far the most efficient way to move produce, and it was a serious mistake for the farmers to abandon railroads,” he said.
Nielsen also said that he is “not a philanthropist” regarding railroads, and that he saw several years back, when the Farmers Coop in Gordon decided to sell its stake in the Nebkota Railroad, that there was money to be made. “I made a serious attempt to buy it,” he said. “I saw what the elevators were making in shipping and I felt some of that could go to the farmers.”
A few years later, in the spring of 2007, Nielsen said he learned that Nebkota, which by that time was owned by West Plains Grain, was planning to abandon the line from Gordon to the west, and again made efforts to keep the line intact, but without success.
About the same time Doyle said he learned of the coming line abandonment from Roy Fitzgibbon, general manager of the Nebkota, and that the two hatched the idea of buying the line from Chadron to the west.
Doyle said he went looking for venture capitalists, but soon learned of Nielsen’s interest and got in contact with him.
“When we first met, in the fall of 07, we saw the potential,” Nielsen said.
The next step was to contact the DME and negotiate the purchase. The deal was nearly complete in fall of 2008, the men said, when DME was purchased by CP, which set the process back to square one.
The renewed negotiations had just been successfully concluded, according to the men, when the West Plains elevator in Chadron burned. Not long after, they learned for the first time of West Plains’ plan to build a high speed loading facility for grain cars on its remaining four miles of track, east of Chadron.
That chronology is important, said Nielsen, because the close connection in time between the West Plains announcement and the NNR deal to purchase the yard and track has given some the idea that NNR was formed simply to capitalize on the grain shipments. “We didn’t build our plans on the expectation of hauling grain for West Plains,” he said.
In any case, as part of its contract with CP, NNR has to honor the ‘trackage’ agreement that Nebkota/West Plains has, and that agreement specifies how much it can charge for the train cars that pass over the lines, Nielsen said.
In an April 23 letter to Rob Harvey of West Plains Grain, Nielsen calculated the cost of moving NR grain cars to Crawford at about 7 cents per bushel, which he said would be less than the cost of trucking the grain that distance.
While grain hauling would be a welcome income, NNW is building its business plan on the idea of utilizing the existing Chadron infrastructure, particularly the roundhouse, to service the railroad industry’s need for mechanical services.
The first part of that plan is already underway, said Nielsen, with a signed contract from Railway Equipment Services of Oil City, La., for servicing of track laying equipment. RES has a contract to purchase all of the track equipment going off lease or being sold by BNSF, Nielsen said, and needs additional help in refurbishing the pieces for sale. “Our role is to clean them, tear them down, and rebuild them and paint them,” said Nielsen.
The first part of the contract involves work on 11 ‘Speed Swings,’ a specialized machine similar to a front end loader but designed to work on rails. More work on other equipment is likely to follow shortly, said Nielsen.
A test run last week also gave the men confidence about another part of their plans-repair to the electric motors that drive the huge locomotives which pull (or push) trains down the tracks. About a week ago, one of the largest locomotives in the BNSF fleet was brought into the Chadron roundhouse, to make sure that it would fit inside.
“These are relatively new. That’s a $2.5 million piece of equipment…We wanted to make sure (it would fit),” Nielsen said, displaying a photo of the locomotive inside the roundhouse. “To walk in the roundhouse and see it sitting here after 25 years of nothing does get your blood flowing.”
A key part of the locomotive repair contract currently under negotiation with EMD, one of two firms that make the huge machines, is the existence of two ‘drop pits,’ in the roundhouse, said Doyle. That allows workers to remove the engine’s huge wheels and axles and lower the motors onto a track so they can be moved to another bay and lifted up to working height by a large winch.
Chadron’s wooden roundhouse, which was built after a fire in the early 1900s, is one of only a few still standing in the region, said Nielsen. “You go from Huron to Denver and there are only two, here and Cheyenne,” he said.
And having the drop pits makes it particularly useful. “We can get into some serious upgrades as we go along,” said Nielsen
With work in hand and plenty of opportunities on the horizon, NNW has formed an management team and is beginning to hire workers, said Doyle.
Among the management employees are several with long ties to railroading in Chadron. Roy Fitzgibbon is general manager, George LaPray, a former general manager of Nebkota, is vice president of administration, and Chadron city council member John Chizek is chief mechanical officer.
Hiring of people to work on the railroad equipment is also underway, said Doyle. “We have, as of today, put on six jobs… good jobs, technical jobs,” he said.
The region’s existing labor pool, which includes many former or laid off railroad employees, should be able to provide the workers needed, said Nielsen. ‘One of the things that Chadron needs is jobs,” he said.
A railroad wouldn’t be complete without a locomotive, and NNW already has one, newly painted, sitting in the roundhouse. “That’s our flagship,” said Nielsen, “It’s a SD 18. that’s a 1,750 horsepower engine that came off the Duluth Mesabi and Iron Range.”
Nielsen said he actually purchased that engine himself more than a year ago, before the NNW was operational.
Delivery of a similar locomotive, with a slightly different configuration that will allow it to better negotiate the poorly maintained switches in the Chadron yard, is expected in about ten days, said Doyle.
“We need two engines because of the tonnage we will haul and for reliability,” said Nielsen.
With new possibilities presenting at a fast pace, the two men said they are trying to concentrate on the existing agreements before taking on too many new ones. “We are recognizing more things now than we could get to,” said Doyle.
Safety is the company’s first priority, said Nielsen, who noted that even a small scale railroad like NNW must meet the same standards as the largest operators. Doyle said his career with the federal government will help the firm stay in full compliance with the myriad regulations governing railroads.
Although NNW has only recently taken over the Chadron yards, Doyle said he thinks people will notice of the efforts that are underway on the property. “In 90 days, we have breathed new life into this,” he said. We are trying to preserve the past and focus on the future.”
Tours of the roundhouse and yards will be offered Thursday, July 8 from 4 p.m. to 5:30 p.m. as part of the 125th anniversary celebration and the CNW reunion.