Business

July 23, 2014

Carolina Southern settlement provides path to restore rail service

Carolina Southern Railroad has agreed to begin the process of abandoning all but seven miles of its track in Horry, Marion and Columbus, N.C., counties in an agreement that officials hope will result in a boost to economic development.

Carolina Southern Railroad has agreed to begin the process of abandoning all but seven miles of its track in Horry, Marion and Columbus, N.C., counties in an agreement that officials hope will result in a boost to economic development.

Rail service, said Horry County Council Chairman Mark Lazarus, would give economic development efforts another tool to use in recruiting industry.

The agreement, announced Wednesday, comes two years after the last train served customers in Horry and Columbus counties, and businesses on both sides of the state line have had to spend extra money to ship raw materials in and finished products out.

Once Carolina Southern begins the abandonment process, the three counties and municipalities within them will withdraw a petition to the federal Surface Transportation Board to declare that the railroad failed in its responsibility to provide service.

The two sides then will try to agree on a sales price for the railroad and to find a buyer. If the search lags too long, the parties will ask that the STB declare the line abandoned and set a price for which it must be sold.

The agreement leaves Carolina Southern with seven miles of track that connect the rest of the line to the CSX mainline west of Mullins. It does provide that Carolina Southern will lease access at standard railroad industry prices to that part of the line to whoever buys the track going toward the coast.

Neither Carolina Southern owner Ken Pippin nor Doug Wendel, co-chairman of a two-state rail committee that engineered the action with the STB as well as the settlement agreement, could be reached for comment Wednesday afternoon.

But Pippin said in a statement that accompanied a news release about the settlement that the withdrawal of the complaint opens the door for talks about selling the railroad.

“After the sale, a fresh infusion of capital to the railroad will enable it to be a strong partner in the economic growth of two great states and the creation of new jobs,” he was quoted in the statement.

Carolina Southern ceased operations in August 2012 after federal bridge inspectors declared some of its bridges to be unsafe for operations. Pippin has said repeatedly that the railroad did not have the millions of dollars estimated to make the repairs.

The relationship between Pippin and the committee was cool from the beginning and sometimes frosty as they bickered over the future of the railroad.

Wendel and committee co-chairman Dennis Worley of Tabor City, N.C., thanked the Pippins for agreeing to move the process forward.

“We hope that this process will allow the railroad to get back operating again soon,” they said in a joint statement that also accompanied the news release.

Fred Richardson, board chairman of the Myrtle Beach Regional Economic Development Corp., said rail service is one of those things, like natural gas, that is a necessity to attract large manufacturers that pay wages considerably above the Horry County average, which is between $14 an hour and $15 an hour.

“We have found out that you have to have something comparable to what other places have,” he said.

Gary Lanier, director of the Columbus County Economic Development Commission, said the return of rail service could mean the reopening of a Georgia Pacific plant that at one time employed about 400 people.

He said that Georgia Pacific had not committed to opening the plant with the return of rail service, but added, “No railroad, no GP.”

Lanier said that the Atlantic Corp., a large paper conversion company that makes frames for HVAC filters and boxes for the military’s Meals Ready to Eat among other things, is considering an expansion and would find the reemergence of rail service a plus in that effort.

Additionally, he said that Columbus County employer Idaho Timber has lost out on some large contracts for wood products from businesses such as Lowes and Home Depot because of the lack of rail service.

“On our side of the line,” Lanier said, “(rail service) would definitely be a big thing.”

The agreement between the committee and the railroad says that it does not affect any tax liability the railroad might have. Also, it states that the railroad and Horry County will negotiate on back rent Carolina Southern owes the county for lease of county-owned track between Conway and Myrtle Beach.

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