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Horry County railroad deal still pending, but officials, business leaders optimistic

jlee@thesunnews.com

A long-awaited deal to revive rail service in Horry County will take at least another week to complete, but all the parties involved insist negotiations are chugging along smoothly.

Kentucky-based R.J. Corman planned to purchase most of the Carolina Southern Railroad by Aug. 1 for $13.9 million. That didn’t happen.

Although the money and deed are in escrow, some final details are still being ironed out, said Bill Henderson, Corman’s vice president of sales and marketing.

“We’re very close,” he said. “There’s probably just a few unresolved issues. ... You just want to make sure everything is done properly.”

Henderson said none of the items being negotiated are deal-breakers, and he pointed out that the railroad’s owner, Ken Pippin, allowed Corman to begin clearing brush and debris off the tracks two weeks ago.

Aug. 11 The next possible closing date (The first was Aug. 1)

All parties expect the to deal close in the coming weeks.

“Then the real work begins,” Henderson said.

The railroad, which is headquartered in Conway, shut down most of its local operations four years ago because some of its bridges didn’t meet new federal regulations. The Carolina Southern’s owners lacked the resources to make the necessary improvements.

Corman, which operates 10 short line railroads, won’t have that problem. The company employs more than 1,600 people in 23 states and for 40 years has run its own rail construction service.

“This is what we do,” Handerson said. “It’s a real blessing to have our construction company here that can manage and complete all the necessary construction work.”

Henderson suspects the bridge repairs, rail line replacement and other projects will cost several million dollars, but the company’s goal is to have trains moving in Horry County by the end of the year.

As part of ramping up operations here, Henderson said Corman plans to hire 30 workers. Those positions would range from rail assistants to engineers. The company has already begun receiving applications.

“There’s a lot of interest,” Henderson said. “We’re thrilled about that.”

Final hold-ups

Among the last-minute issues being negotiated is the number of Carolina Southern workers who will join Corman’s team, said Pippin, who is selling the railroad.

There have also been discussions about which properties and track rights Pippin will retain. He plans to keep the Conway depot and he said the Carolina Southern will still exist as a railroad company, primarily to manage the rights and land that aren’t part of the sale.

“We’ve got to get these things worked out,” he said. “You can’t imagine how many lawyers are involved in this deal. But we’re about to get them out of the way so we can get something done.”

He’s planning to donate other depots to local municipalities if those governments approve the transaction.

It’s definitely moving forward. I’m ready to go, ‘Toot, toot!’

Horry County Council Chairman Mark Lazarus

An agreement for the sale, signed last year between Pippin and a two-state rail committee representing Horry County and Columbus County, N.C., allowed the counties to assign their collective rights and interests to a third party. The counties chose Corman to be the new owner/operator of the 80-mile line, which runs from Horry County to Whiteville, N.C.

Although local officials had hoped the sale would be finalized by Saturday, they remain confident the agreement will be reached soon.

“They were trying to move some legal documents on some deeds and stuff, but nothing substantial,” said Horry County Council Chairman Mark Lazarus, who last heard a proposed closing date of Aug. 11. “It’s definitely moving forward. I’m ready to go, ‘Toot, toot!’”

Ready for rail

Companies that used the Carolina Southern before the shutdown are eager to have rail service in the county again.

“There’s been a lot of strong interest,” Henderson said. “We want to help the community grow. We want to create jobs, and through that is working with the businesses to create value for them. The one thing that rail does a great job of is it opens up new opportunities for them.”

Henderson said Corman will provide businesses with a cheaper choice for shipping than truck transportation.

“It becomes cost prohibitive by truck,” he said. “Rail is a much more cost effective mode of transportation and it will allow you to transport your product further and into new markets.”

Corman also hopes to expand services to forestry businesses, which need to move boards, pellets and wood chips, and farms wanting to push soybeans, corn, peanuts, sweet potatoes or tobacco.

“They are all opportunities,” Henderson said, “and real strong opportunities.”

It would mean a lot to us. We used to do a lot with the railroad.

Eric Blanton, purchasing manager for Blanton Building Supplies in Loris

When the Carolina Southern was running, Blanton Building Supplies in Loris regularly used the railroad to move lumber and sheetrock.

Purchasing Manager Eric Blanton said he would like to have that option again.

“It would mean a lot to us,” he said. “We used to do a lot with the railroad.”

Metglas Inc., a Conway-based metals manufacturer, was one of the railroad’s biggest private sector customers.

After the Carolina Southern shuttered most of its service, Metglas searched for an alternate way to bring in steel from Canada and Mexico. They eventually reached an agreement with the port of Georgetown to meet their transportation needs.

Metglas President Dodd Smith said once the railroad is operating he would be interested in seeing what Corman could offer his company.

“If the business arrangement is right, we would use the railroad pretty extensively,” he said.

Smith also serves on the board of the Myrtle Beach Regional Economic Development Corp., an organization that has long sought to restore rail service in the area.

“We’ve been working with the county very closely for four years to get the railroad up and running,” he said. “From an economic development standpoint, I’m extremely excited about it because Horry County needs it.”

Earlier this year, Smith made a deal with Corman’s leaders: If the Kentucky company could get rail cars moving in Horry County by April 1, 2016, the Smith would buy them each a hamburger. If not, they owed him one.

“I figure I’m going to be buying them a burger in November,” Smith said. “That says something.”

Charles D. Perry: 843-626-0218, @TSN_CharlesPerr

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