Railroad group to talk sale

08/06/2014 11:28 PM

08/06/2014 11:57 PM

The co-chairmen of a two-state rail committee will meet next month to negotiate the purchase of Carolina Southern Railroad for the taxpayers.

The governments behind the effort so far include Horry County and the states of South Carolina and North Carolina, although just what each might pay has not yet been determined, said Mark Lazarus, Horry County Council chairman and a committee member.

The funds would include state and federal grants that would be channeled through Horry County, Lazarus said.

A government purchase of the line that runs from Mullins into Columbus County, N.C., near the town of Fair Bluff and then back into South Carolina at Tabor City would link public ownership with the 14 miles of track between Conway and Myrtle Beach already owned by Horry County.

It also likely would avoid the situation that has kept the line shut down for about two years. Carolina Southern ceased operations in August 2012 after federal rail inspectors found problems in some bridges. Owner Ken Pippin said repeatedly that the railroad does not have the money to make the repairs, estimated to be at least $2 million.

A new appraisal of the railroad paid for by North Carolina could be complete by Friday, Doug Wendel, the committee's co-chairman from Horry County, said at a rail committee meeting Wednesday afternoon. Columbus County attorney Dennis Worley is the other co-chairman.

Wendel said he hopes the negotiations will take no longer than a week, but added that extensions are possible if needed.

Should the two sides not reach an agreement on the price by Sept. 29, the federal Surface Transportation Board will set an amount for which the line must be sold.

Wendel said the committee will give a copy of the appraisal to Carolina Southern's negotiators as soon as it is ready so they will have time to study it before negotiations begin. The railroad's value as determined by that appraisal will form the basis of the co-chairmen's negotiation.

But another appraisal of the railroad has already been done by South Carolina. Pippin has said he is not allowed to say what it determined, but he would accept it for the purchase of the railroad.

Pippin will maintain ownership of several miles of the current railroad that connect it to the CSX main line, which would get goods into the national rail system. An agreement between him and the committee said he will charge the standard per-car rate for traffic using it.

The prospective buyer of the railroad must file a request with the STB by Sept. 9, one day after the negotiations are set to begin, for financial assistance available to buyers of distressed and abandoned rail lines.

Businesses and industries in Horry and Columbus counties that relied on rail transportation have had to find alternative, more expensive, ways to get raw materials in and finished goods out.

Reopening of the line could be an economic stimulus to Horry County, as it has identified some potential industrial sites along the route. Rail transportation would be essential to large manufacturers, particularly since there is no interstate highway serving Horry County.

Wendel said officials are now working to package the funding for the purchase and said they would welcome offers from others who want to join the effort.

He said that the deal should be consummated no later than the end of February, regardless of which path it takes.

Lazarus said the governments would have several options for operating the line once they have ownership.

One is that it could be run by departments of transportation from both states.

Another, he said, would be a resale to a short line owner. But he said that would be unlikely as the governments will not give up easement payments from utilities and others who encroach on the railroad's property. He said he doesn't know how much money that could bring, but was certain it would not be enough to pay for the purchase.

He said Horry County, so far, has identified at least $50,000 in yearly easement revenues.

The final option, Lazarus said, would be for the governments to lease the railroad to a private operator.

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