Horry County gives railroad notice of default

sjones@thesunnews.comMarch 20, 2013 

— Carolina Southern Railroad owner Ken Pippin said Wednesday that he wants to wait until after he talks with Horry County officials before he comments on the County Council giving his business formal notice of being in default of its lease for county-owned tracks between Conway and Myrtle Beach.

The $50,000-a-year lease was three years in arrears, said Gary Loftus, interim chairman of the Horry County Council.

Loftus said the county waited three years before acting at least partly because of a hope that the railroad would start generating enough revenue to make the lease payments.

“We thought if we gave them a chance to get going, they’d get caught up,” Loftus said.

But the Pippins didn’t even give the county a good faith effort to pay what the railroad owed, Loftus said.

Ken Pippin declined to comment Wednesday on the default.

County councilman Marion Foxworth said the county’s action gives Carolina Southern 60 days to correct the situation. If the Pippins are making substantial effort to pay what the railroad owes but still haven’t caught up, Foxworth said the Pippins could be granted a 180-day extension to settle the debt.

Another year’s lease is due to be paid by July 1, and if it is not, it will add another $50,000 to what the railroad owes Horry County.

Foxworth said Carolina Southern originally leased the county’s track in the mid to late 1990s. About 2005, it negotiated with the county over utility easement payments. Foxworth remembers the negotiations and said at least some were rancorous. Chad Prosser was council chairman at the time and he did not recall that the negotiations were ugly in any way, but said they took a long time.

Assistant county administrator Steve Gosnell, who was on staff at the time of the utility easement negotiations, said the issue was over how much would be charged for the easements and who would get the payments.

“The real value of a railroad is in the right of way,” Prosser said.

No agreement was reached, and Gosnell suspects that is part of the reason the railroad has been unable to make the lease payments.

The County Council wasn’t the only one giving the Pippins a hard time Tuesday night.

Exchanges between the Pippins and some members of a two-state railroad committee became heated as municipal officials in North Carolina wanted some consideration on easements they pay along that part of the line and movement on a desire by Columbus County, N.C., to possibly purchase the Whiteville train depot.

Columbus County manager Bill Clark said he had asked Jason Pippin, general manager of the railroad and Ken Pippin’s son, to get an appraiser for the building last year, but nothing was ever done.

Wednesday, he said that he followed the request with an email, but never heard anything.

Jason Pippin said he and his father contacted two railroad appraisers on their trip home Tuesday evening to Conway from the committee meeting in Loris.

Clark was glad to hear that Wednesday.

In an interview with the Pippins later Wednesday, Jason Pippin said he’d given Columbus County officials the name of a railroad appraiser last year as requested.

As he recalled the brief meeting in which the request was made, he remembered a more general request for an appraiser and said it was the group that wanted the information.

“The word ‘us’ meant the people in the room. The word ‘us’ does not mean me,” he said.

Ken Pippin wondered how serious Columbus officials were with their request because of the lack of follow-up.

“How serious could they be?” he asked.

Jason Pippin said that while he got the names of the appraisers, Columbus County will have to pay them to assess the depot’s worth.

Ken Pippin said he felt positive after the meeting in Loris because the attendees agreed to help the railroad apply for a federal grant to fix its bridges and get the trains running again.

‘The main thing we’re very happy about is that the group wanted to move forward with the grant,” he said.

Contact STEVE JONES at 444-1765.

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