For no less than a fifth time in a dozen years, the railroad currently called the Youngstown and Southeastern, is reportedly up for sale. Five miles of the railway stretches through Boardman Township, along Southern Blvd. The short-line railway operates between Youngstown and Darlington, Pa., a distance of some 35 miles and has been beset by financial problems for a decade.
In the past decade, the Columbiana County Port Authority (CCPA) has ruled over the rail line, spending millions of dollars in subsidized funds along the way for legal feees, and at one point obtaining a $2.1 million loan from the Ohio Rail Development Commission to rehabilitate the line.
According to a letter of intent sent to Tracy Drake, chief executive officer of the CCPA, Aqua Infrastructure LLC (affiliated with Aqua Ohio) is prepared to buy the rail line for $3 million, subject to approval by the Surface Transportation Board (STB).
Given such a tiny customer base, it remains to be seen if Aqua wants to continue to operate the railroad, as much as it might consider placing water lines along the railway’s right-of-way. The water line could bring water to oil and gas wells in Columbiana County.
Aqua Ohio is said to now truck water to drilling sites in Columbiana County.
The rail line first began in 1904 as the Youngstown and Southern Railway. At its peak, some 7000 cars annually moved along the line.
In the late 1990s, the Youngsown and Southern faced a declining customer base and decling revenues and sold the line to Railroad Ventures, of Boardman, a firm comprised of three Boardman-based businessmen, David Handel, Atty. Michael Morley and Charles Bishara. Railroad Ventures acquired the line on Nov 8, 1996 for $730,000.
Railroad Ventures conducted extensive reviews of the rail line and found it served very few customers (including an almost vacant industrial park in Columbaian County).
In partnership with Boardman Township and Boardman Park, attempts were made to abandon the line and develop a bike trail (while Railroad Ventures held certain easements across the rail line).
However, the Columbiana County Port Authority opposed the abandonment and after a lengthy case before the STB, the port authority forced the sale of the line to itself at a price of $1.118 million on Oct. 4, 2000.
Last major customer along the line was hauling construction debries from a site in Youngstown to a dump site in Negley, Oh. That business has trailed-off.
Most recently, a few cars carrying piping for oil and gas drilling move along the line.
Estimates indicate annual traffic along the line has shrunk to no more than 700 cars a year.
The CCPA most recently said a Canadian firm called Tervita wanted to buy the line for $2.9 million. In Apr., 2012, the CCPA approved a letter-of-intent from Tervita.
At that time, the CCPA lauded the proposed sale, saying it would use $1.7 million of the purchase price to payoff its loans on the railroad that hardly serves any customers.
Tervita wanted to buy the line to service the shale industry, but then backed out over concerns of some reported environmental and legal issues.
With Tervita indicating it would buy the rail line, the CCPA Director, Tracy Drake, said that by 2014, there would again be 7000 cars running on the line.
Desipte the ‘no sale,’ last October the CCPA reportedly paid-off its loan to the Ohio Rail Development Commission settling the bill for just $900,000.
Payments on the loan were few and far between, and the CCPA was consistently cited for three years in state audits for not making payments on the loan.
The CCPA has also been cited for giving pay raises out to its staff, without a formal vote of its board.
Aqua has indicated if it purchases the rail line, extensive rehabilitation work may have to be undertaken.
One Aqua official stated the rail line is in a state of “deferred maintenance.”
In the meantime, according to the mandates of the STB, out of safety concerns, railroad cars can travel no faster than 10-miles-per-hour along the line.