Abandonment move strikes heart of Carolina Southern negotiations
04/28/2014 11:02 PM
10/08/2014 11:15 AM
Negotiations between Carolina Southern Railroad and a two-state railroad committee to sell the line have been nonexistent, according to one side, and surprising in a bad way by the other.
Now, Carolina Southern has filed with the U.S. Surface Transportation Board to abandon its line between Tabor City, N.C., and Conway, according to Doug Wendel, the committee’s co-chairman.
The petition has not been filed yet, according to railroad owner Ken Pippin, but it has begun in that his attorney has sent letters to those on the other side that it plans to file for abandonment.
There was no indication Monday on the STB website that a request to abandon had been filed.
Carolina Southern ceased operations in late 2012 when it was ordered by federal railroad inspectors to stop running until structural problems on some of its bridges were fixed. Pippin has said he does not have the money to make the repairs, and an application for federal funds to do so was not successful.
Businesses in Horry and Columbus County, N.C., have had to resort to more expensive ways to transport goods since the shutdown.
The lack of movement caused Marion, Horry and Columbus counties along with some municipalities and businesses formerly served by the railroad to formally ask the STB to force a sale of the railroad.
The process has seemed frustrating to some members of the committee, some of whom no longer attend meetings because they’ve said that nothing is accomplished by them.
“If we’re just going to say no we don’t want that,” Horry County Councilman Gary Loftus said of a called committee meeting scheduled for Wednesday, “we can say no we don’t want to do that without going to the meeting.”
The committee apparently felt good about the pace of the negotiations in late March, when it filed a petition with the STB asking that actions on the matter be put on hold to allow the negotiations to run their course.
“In the unlikely event that negotiations for a settlement are not successful,” the petition reads, “Complainants can request that the Board reinstate the Complaint as an active matter ...”
At about the same time, Wendel said he was optimistic that the matter was near resolution. More recently, though, he has said he is no longer as optimistic.
On Monday, he called the railroad’s move toward abandoning part of the line “troubling and upsetting” because he thought the two sides had agreed to try to sell the whole line to one buyer.
Pippin said he thought the move toward abandonment was what the committee was seeking in its original filing with the STB.
He said that if an abandonment is approved, the process will require him to sell the railroad in pieces.
Wendel said that abandonment would allow a potential buyer to file a request for financial assistance and that the STB would set a price for sale of the abandoned line as a railroad.
Mark Lazarus, chairman of the Horry County Council, said one of the problems with the negotiations is that Pippin will not put a price on a sale of the railroad.
“I’ve been asking them what do you want for it,” Lazarus said. “They won’t answer.”
But Pippin said an appraisal was done by Palmetto Railways, the state-owned line that serves the Charleston port. He said he’s willing to work from that figure in negotiating a sale.
Wendel said he hasn’t seen the appraisal and Pippin said he’s bound to silence by an nondisclosure agreement with the state.
Pippin agreed that the two sides have exchanged settlement agreements, but he said there have been no sit-down negotiations.
He at first said Monday that nothing’s happened since a February meeting of the railroad committee, and later said there’s been no movement in more than a week.
“They have a price,” Pippin said. “They have an appraisal they did.”
Wendel said he believes the state of South Carolina has been the main suitor of the railroad recently. He said there have been intermittent conversations about a sale with a variety of people. He’s hopeful that a dialogue can continue between the committee and the railroad.
He said Wednesday’s meeting is to update committee members on the latest developments and to discuss how it will continue to negotiate.
But like Lazarus, Wendel said Pippin has refused to give the committee an amount he would accept for the railroad.
“They have thrown out figures,” he said, “but they have put nothing in writing and won’t say what they’ll take for it.”
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