(The following story by Shannon Fiecke appeared on the Shakopee Valley News website on August 25, 2009.)
JORDAN, Minn. — The door has shut on Scott and Carver counties’ attempt to purchase a 5.6-mile soon-to-be-abandoned rail line that crosses the Minnesota River.
The counties and Union Pacific Railroad couldn’t agree on a price, so the line will proceed through the abandonment process, with the land likely to revert to or be sold to adjacent property owners.
Union Pacific was required by a federal agency to try to sell the line to local governments so the corridor could be preserved in case there’s a chance for rail again in the future. The counties, along with the Metropolitan Council and cities of Carver and Chaska, wanted to use the corridor for now as a regional trail and also as a path for a sewage discharge outlet needed for a future wastewater treatment plant.
“It’s a significant lost opportunity for residents, but also for the railroad,” said Scott County Parks Manager Mark Themig.
The counties had offered the railroad company $1.4 million for the line, minus the cost of removing the main bridge over the Minnesota River, which is structurally deficient and causes log jams. Removal was expected to cost between $500,000 and $1 million.
Originally, the counties asked Union Pacific to donate the land outright as a tax write-off. They then offered $1.4 million, based on an appraisal done by the Metropolitan Council. The counteroffer came in at $3.9 million with no reduction for bridge removal, and Union Pacific wouldn’t budge, Themig said.
“The $3.9 million [offer] in our opinion was not a reasonable price,” Themig said.
Themig doesn’t understand why Union Pacific won’t lower its price, especially given that the railroad’s own appraiser estimated the land to be worth $1.75 million in an application for abandonment filed with the federal Surface Transportation Board.
“It seems to me like Union Pacific Railroad could have walked away with cash in their pocket, so to speak,” Themig said. “Instead, it appears to me, they’re walking away with a financial obligation for removal of that bridge.”
Mark Schulte, with Union Pacific’s real estate division, said the $1.75 million appraisal was for land only and didn’t include physical assets, like bridges and railroad ties.
Union Pacific opted to abandon the rail corridor between the Minnesota Renaissance Festival grounds in Louisville Township and United Sugars in Chaska after a trestle collapsed upstream of downtown Carver in March 2007, sending railcars with sugar into the Minnesota River. The railroad has removed the downed trestle.
Although United Sugars relied on the line, the railroad estimated it would take up to $8 million to fix bridges and tracks on the line and determined freight revenue wouldn’t justify the costs. In the year before the collapse, the line carried 764 carloads at a profit of $23,823.
Union Pacific didn’t foresee prospects for increased traffic or revenues on the line. Since the collapse, United Sugars has received bulk sugar at its Chaska plant via truck, which has substantially increased its costs.
INTEREST
There are multiple reasons local governments were interested in buying the line. Not only could it be made into a trail to connect with a trail that reaches Minneapolis, but it could serve as a corridor for a sewer interceptor and other utilities.
Chaska was also interested in redevelopment opportunities and Carver saw flood-protection benefits.
The counties and cities could attempt to purchase individual segments of the line once it is abandoned. With 120 parcels, however, it would be a huge undertaking to try to re-assemble the entire corridor.
The railroad owns about 90 percent of the total 75 acres of railroad corridor — 69 of the 120 parcels. The remaining land consists of “revisionary parcels” — easements on private property or street right-of-way. These parcels must revert back to property owners once the line is abandoned.
When Union Pacific relinquishes a rail line, it typically salvages rail ties and other components, Schulte said, and then sells or reverts ownership of the land to adjacent property owners. The railroad traces the history of the parcels to learn how they were first acquired and determine how segments should be disposed.
The process for abandonment is governed by the federal Surface Transportation Board. The railroad will have to fulfill obligations set by the board before the line can be abandoned.
“Once that happens, the corridor is lost forever, unless some agency tries to go back to reassemble [it],” Themig said.
Purchase of the rail corridor would have been contingent on the counties receiving a bulk of the funding from the Metropolitan Council.
There were seven bridges associated with the rail line that might have needed replacing or retrofitting for a trail to be laid. The counties planned to go after federal or state funding to cover most of the costs.
Converting the rail bed in Scott County for a trail and upgrading four bridges on its side of the river would have cost an estimated $3.2 million ($2.2 million of this would be for a new bridge over the Minnesota River.)
If the counties had bought the line, 75 percent of the purchase might have been covered with a grant from the Metropolitan Council. Easements for sewage pipes could also have been sold to help fund the purchase.
The railroad still must determine what it will do with its main bridge over the Minnesota River, which a federal agency could require to be removed.
The Army Corps of Engineers is still discussing the bridge, which has been deemed “structurally deficient” and is said to create log jams on the river and prevent anglers from traversing upstream or downstream.
This spring, the corps sent a letter to Union Pacific, notifying the company that it must rehabilitate and maintain the bridge in working condition, or remove it entirely from the river.