Short Line & Regional Railroads
Stimulate Local Economies

By Zanetta Doyle, Digest Editor

According to the American Short Line and Regional Railroad Association (ASLRRA), short line and regional railroads operate and maintain 29 percent of the American railroad industry’s route mileage, and account for nine percent of the rail industry’s freight revenue and 11 percent of railroad employment. A 2003 report by the American Association of State Highway and Transportation Officials (AASHTO), Transportation: Invest in America – Freight-Rail Bottom Line, revealed that 551 regional and short line railroads that operate 30,000 miles of track, originate 16 percent of traffic, and generate nine percent of railroad revenue.

However, the study also reported that railroad revenues have continued to drop. The industry’s return on investment has improved from only four percent in 1980 to eight percent in 2000. The consolidations of major rail companies, and the drive for profits have resulted in the abandonment or neglect of many lines during recent decades. Rural areas are particularly hard hit because those lines provided an essential connection for local industries, such as those involved in bulk commodities. Despite the challenges, some regional organizations are revitalizing rail lines to take advantage of opportunities.

New York Rail Brings Economic Boost

The Southern Tier West (STW) Regional Planning and Development Board in Salamanca, New York, prevented the abandonment of a 145-mile rail stretch connecting four southwestern New York counties with two Pennsylvania counties. The regional development organization, an economic development administration funded district, in the mid-1980s, with approval from the state and four affected counties, began working to save the rail line.

Southern Tier West conducted engineering and market analyses to determine the future redevelopment potential of the line. They also became a formal interested party in the federal Surface Transportation Board’s merger decision in the mid-1990s, allowing them to start negotiating with the Class I railroad purchaser. After years of effort, Southern Tier West executed an agreement with the railroad and New York State in 1998, resulting in the creation of a four county railroad authority. The state legislature formally created the authority in 2000.

With the authority’s approval, the new Class I owner has subleased the line for 30 years to a regional railroad. Southern Tier West provides staffing and administrative services to the authority, overseeing operations, securing line rehabilitation funding and pursuing support for business development along the line.

Tom Barnes, Senior Regional Economic Development Coordinator for Southern Tier West explained that the Southern Tier Extension Rehabilitation Project is a multi- state, multi-regional public/private partnership between several counties and municipalities, two states, a public authority, two economic development districts, the Economic Development Administration, the New York State Department of Transportation, local economic development organizations and agencies, and two private sector railroad companies. “One primary component of our overall regional economic development is to improve our rail and highway transportation infrastructure, and encourage private investment along our rail and highway infrastructure spine corridor systems,” Barnes said.

Investment in the railroad to date is $24.935 million. This includes funding from state, federal and local entities as well as the short line rail operator. In addition, 805 jobs have been created and three of the shipping firms that use the railroad have invested more than $4 million in the rail line. There are currently $15 million worth of rehabilitation projects in development over the next three to five years. “As a rural region, our region’s economy is dramatically impacted by the condition of its transportation infrastructure. Access to larger metropolitan and global markets is only available through our transportation infrastructure. Within our region, because of the distances separating our constituent businesses, we rely on our transportation infrastructure for our economic health and well being,” Barnes commented.

Utah Short Line in the Works

The Six County Economic Development District (SCEDD), an Economic Development Administration funded district, comprising Juab, Millard, Piute, Sanpete, Sevier and Wayne counties in Central Utah is currently involved in the development of the 47-mile Central Utah Short Line Railroad. The proposed railroad will begin in Sevier County, traveling through three counties, and will transport four to six million tons of coal and other products to the Union Pacific main line in Juab county.

The project has been in development for four years, and is being directed by the local officials of the six county region. According to Russell Cowley, Executive Director of the SCEDD, “Two of the six counties in the region already have rail service. Sevier, Sanpete, Piute and Wayne counties do not. The proposed railroad will provide a transportation alternative to these counties.”

The railroad project began as an effort to protect the coal industry of the Central Utah area by providing a cheaper means of transportation. Currently, the only means to get coal to the main line and essential markets is by truck. The amount of coal being shipped makes the Central Utah Rail Project feasible. In addition to coal, other products and potential shippers have been identified. According to Malcolm Nash, Director of Sevier County Economic Development, “Many business opportunities bypass us because we don’t have rail service. Visionaries of the project feel that the development of a short line rail carries with it a tremendous opportunity for new jobs through new and expanding business.”

In the early 1980s a major flood destroyed the rail line that serviced the central part of Utah. The coal industry continued to grow and soon became a base industry for Sevier and surrounding counties employing over 350. However, the competition of getting the coal to market was increasing and raised concern of mine officials. They realized that to remain competitive, an alternative means of transportation would need to be developed. They approached the Six County region with a request to determine the feasibility and oversee the development of a short line railroad.

Phase One of the project included organizing a Railroad Technical Advisory Committee, getting political support and securing funding to conduct a preliminary feasibility study of the impact the rail would have. The study was funded through a grant from USDA Rural Development and was matched by private industry. A private landowner’s sub- committee was also formed to provide input on the proposed rail alignment. An industrial users’ subcommittee was organized to determine potential freight and usage. Throughout this phase, public information meetings were conducted to keep the public informed of new information and data. Phase One was completed in January 2003 showing a positive feasibility and continued local elected official support for Phase Two.

Phase Two is now underway. This phase includes conducting an environmental impact study (EIS), determining engineering feasibility, and developing a railroad operation plan. Preliminary funding for this phase includes $1 million from Congress via the Surface Transportation Board (STB), $200,000 from the Community Impact Board, a state run entity, and a $100,000 match from private industry.

Once Phase Two is complete and feasibility is determined, the project will enter Phase Three, the actual building of the railroad. SCEDD is hopeful that this phase can begin in 2004 with railroad operations beginning in 2006.

Cowley added that among some of the other long-term opportunities that exist include the development of an industrial park that will have a spur to the railroad and the efficient shipment of coal to several power plants in the area. In addition, several businesses have shown considerable interest in the shipping of raw materials once the short line rail is complete.

For more information contact:

Tom Barnes of Southern Tier West RP & EDD at 716/945-5301 or email tbarnes@southerntierwest.org;

Russell Cowley of the Six County EDD at 435/896-9222 or email rcowley@ext.usu.edu;

Visit the American Association of State Highway and Transportation Officials Web site at www.aashto.org;

Visit the American Short Line and Regional Railroad Association Web site at www.aslrra.org.

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