Yes - two abandonments. The STB approved abandonment of the entire NA Jct-Towner line in 1996 in the UP-SP merger (Docket No. AB-3, Sub-No. 130). But UP never “consummated” it. Abandonment authority is “permissive” - a railroad doesn’t have to exercise it. In this case, UP didn’t exercise the 1996 authority - it sold the line to the state of Colorado instead, The state then arranged for an operator, and ultimately sold the line to recover its investment. Since the line was never actually abandoned , the current owner has to file for it
Falcon48, thank you for that direct answer - esp. the “permissive” part. [tup] It mirrors exactly what I’ve understood the doctrine to be in these scenarios.
Next, let’s engage in the theoretical exercise of: When was did the 1st abandonment lapse, the line come back into service, and thus necessitating the 2nd abandonment ?
Without knowing the details, it seems to me that the sale to Colorado could have been a mere “Net Liquidation Value” asset sale (unless the line remained in operation through that transaction). If it wasn’t in operation then and was later scrapped, that would seem to be the consummation of the abandonment.
But when Colorado arranged for an operator and the line was restored to service, then that negated the first abandonment, and necessitated a second abandonment to legally cease that service.
The tricky issue would be presented if the line had remained in service continuously. At what point would the first abandonment have been negated ? A sale to Colorado could be viewed as a mere change in post-abandonment ownership - would that even require STB approval ? On the other hand, if it was a Net Liquidation Value sale, that’s the last resort before abandonment, but it does allow the line to continue to operate. So was the first abandonment permission even necessary if a NLV sale was to take place ?
I view hiring an operator for sure is a step that restores the line to service and necessitates the second abandonment.
If you’re so inclined, I welcome your response to these queries, even if it’s only to tell me that I’m all wrong about it. [swg]
Thanks again,
- Paul North.
[quote user=“Paul_D_North_Jr”]
Falcon48, thank you for that direct answer - esp. the “permissive” part. It mirrors exactly what I’ve understood the doctrine to be in these scenarios.
Next, let’s engage in the theoretical exercise of: When was did the 1st abandonment lapse, the line come back into service, and thus necessitating the 2nd abandonment ?
Without knowing the details, it seems to me that the sale to Colorado could have been a mere “Net Liquidation Value” asset sale (unless the line remained in operation through that transaction). If it wasn’t in operation then and was later scrapped, that would seem to be the consummation of the abandonment.
But when Colorado arranged for an operator and the line was restored to service, then that negated the first abandonment, and necessitated a second abandonment to legally cease that service.
The tricky issue would be presented if the line had remained in service continuously. At what point would the first abandonment have been negated ? A sale to Colorado could be viewed as a mere change in post-abandonment ownership - would that even require STB approval ? On the other hand, if it was a Net Liquidation Value sale, that’s the last resort before abandonment, but it does allow the line to continue to operate. So was the first abandonment permission even necessary if a NLV sale was to take place ?
I view hiring an operator for sure is a step that restores the line to service and necessitates the second abandonment.
If you’re so inclined, I welcome your response to these queries, even if it’s only to tell me that I’m all wrong about it.
Thanks agai
Thanks again for those explanations. An interesting discussion.
- Paul North.
Who was the original operator after Colorado acquired the line. Was it independant of A&K.
First of all, a caveat (excuse). I don’t have access to the underlying files, so I am speaking solely from memory (which, given the time that has passed and my declining years, may not be entirely accurate).
That said, the original operator was an outfit called the Colorado, Kansas & Pacific Ry. I’m pretty sure it had no affiliation with A&K. CK&P had previously made an completely unrealistic proposal to acquire both the Towner line, the Tennessee Pass line and intervening trackage which wasn’t proposed for abandonment, but was rebuffed both by the state and by UP (in large part, because of lack of funding). If A&K had been behind CK&P, it would certainly have come out at the time, as it would have been relevant to CK&P’s financial wherewithal (or lack thereof).
I did some quick research on the STB website. You’ll find quite a bit of information on the post UP abandonment history of the Towner line in an STB decision served November 13, 2012 in Finance Docket 35664. It’s available at the following web address:
Based on this decision, my recollection of what happened was essentially correct. The state acquired the line from UP in 1998. CK&P acquired the right to operate the line from the state. In 2004, the state sold the line to V&S (the A&K affiliate), which then took over operation of the line from CK&P. In other words, A&K didn’t come into the picture until 2004.
It sounds like the serious shortline companies (like the one who tool over the ex-MP line in Kansas, east of Towner) took a pass on the Colorado segment. It reminds me of the ex-RI Colorado line. A large shortline company took over the line east of Limon, while the Limon-Colorado Springs segment was taken over by the hardluck C&LC. That segment is now an empty grade.
Interim operator of the Towner Line was Court Hammond’s Colorado Kansas & Pacific. They defaulted on their purchase option, largely because of the drought that pretty much wiped out agriculture in SE Colorado and the thing went back to CDOT/Colorado ownership protected under a state statute. (Unfortunately, CDOT can’t railroad, but they were the funding operation within the state beauracracy.)
PDN: The scenario is very much like the CRIP Peoria Heights case for the reason that interests you. (It also was bought out of abandonment.)
The parts missed on the Rock Island/Kyle scenario was the Mid-States Port Authority (MSPA) and The Colorado & Eastern (Gary Flanders/Northern Railcar) debacle with all of its financial shennanigans which sucked-in hard luck C&LC. The line was abandoned by a 4-County agency, not C&LC and has unwittingly become a court case waiting to happen if folks discover what that multi-county agency failed* to follow through on. There is a small piece of the Colorado Springs end owned by UP (DRGW purchase) west of Constitution Ave in the Springs that survives.
*It continues to amaze me how badly local agencies mis-read or choose to ignore federal abandonment statutes (and guess their way through a mess) and then blunder themselves into a crisis.
How much traffic did the SP-D&RGW-MP route actually get during the D&RGW ownership of SP? Did not SP have a long-standing obligation to solicit traffic for the Ogden gateway and the UP? What about the costs of operating over Tennessee Pass?
From the cited decision:
"Digest:1 This decision addresses unusual circumstances in which V and S Railway, LLC (V&S) bought a line of railroad, obtained lease and operating authority, but failed to obtain acquisition authority. V&S now seeks to abandon a portion of the line that has been out of service for over two years. In this decision, the Board grants acquisition authority, but denies the request that the authorization be made retroactive to the time of purchase. To facilitate the abandonment process, however, the Board waives the requirement that the carrier have Board-authorized ownership of the line for at least two years in order to use the expedited procedures for terminating operations on out-of-service lines."
Footnote 7 describes a similar situation, but where the petitions would have been in reverse order.&nb
In response to Dave Klepper’s post, there is an excellent discussion of SP’s traffic, competitive position and economics on its “Central Corridor” route (including the Towner Line and the Tennessee Pass line) in UP’s 5th Oversight filing in the UP/SP merger. See the verified statement of John Gray, SP’s former Vice President, Network & Corporate Design, in STB Finance Docket 32760 (Sub-N0. 21), UP/SP 284, July 2, 2001. Unfortunately, this statement is no longer available on the STB website. I have an electronic copy, but I don’t have the computer skills to attach it to a post (if that’s even possible). The main UP-SP merger application (if you can get a copy of it) should also have carload information on the various SP system line segments which would lose traffic as a result of the merger, showing pre merger traffic and post merger projected traffic. It would be in the Operating Plan. I don’t have a copy of this document.
With respect to the Ogden gateway solicitation condition, I believe there was such a condition dating back to the SP-Central Pacific merger. There were also “solicitation” conditions in many other mergers before the mid 1980’s. The ICC vacated almost all of these conditions from the mid 1980’s on, finding them to be generally anticompetitive. I’m not sure when the Ogden gateway conditions were vacated, but I’m pretty sure they were. I believe there was also litigation involving claims that SP was obligated to preferentially route traffic via Ogden by the 1860’s vintage Pacific Railroad Act, which SP won.
There was to be a “new” revised filing today (#239637 re-start the procedings?) on the STB website, but it was never totally posted. If the title bears any resemblence to the document, then the V&S people still don’t understand the Otero County issue. Hopefully by now they also understand that 95+ % of the line is federal grant right of way and they won’t try to play dumb on that issue either. (They originally claimed none of it was, hoping nobody was watching.)
http://www.stb.dot.gov/FILINGS/all.nsf/WEBUNID/5A1B210DAF1B401A85257F0D00750B81?OpenDocument
The latest newsletter from the Rocky Mountain Railroad Club has a picture of TTX double stack well cars that are being stored on the Towner line by BNSF. The caption mentions that V&S is still pursuing abandonment of the line.
There was to be a “new” revised filing today (#239637 re-start the procedings?) on the STB website, but it was never totally posted. If the title bears any resemblence to the document, then the V&S people still don’t understand the Otero County issue. Hopefully by now they also understand that 95+ % of the line is federal grant right of way and they won’t try to play dumb on that issue either. (They originally claimed none of it was, hoping nobody was watching.)
http://www.stb.dot.gov/FILINGS/all.nsf/WEBUNID/5A1B210DAF1B401A85257F0D00750B81?OpenDocument
REPLY
STB often posts the title of a filing when it receives it and then posts the entire document a day or so later. The entire document is now on the STB website and can be viewed there.
The “Otero County” issue relates to a requirement in STB’s current abandonment rules that a railroad list in its abadonment filing counties and zip codes traversed by a line proposed for abandonment. V&S apparently missed Otero County and its associated zip code in its earlier filing. A minor point.
Of more interest is that this filing changes the relief V&S is seeking from an abandonment to a discontinuance (i.e., a termination of any obligation to provide service, but no a full abandonment). The reason given is that V&S now has a “singificant car storage opportunity”. Presumably this refers to the TTX cars mentioned in another post.
More than a minor point if you read the preceding filings. The “rubber-stamp” abandonment of the line that A&K old boys club expected blew up in their faces. By holding this up, A&K’s inventory of available track material took a hit as did their usual scorched earth business plan which ignored the public well being. (They had the rail sold and lined up for delivery twice until things were questioned.)
Colorado now has time to take issue with some of A&K’s past failings in Colorado, including PUC obligations on the Towner line that it has failed to live up to, plus two other abandonment failings in CO by A&K that have left a bad taste with other county fathers. The push-back is coming.
"Of more interest is that this filing changes the relief V&S is seeking from an abandonment to a discontinuance (i.e., a termination of any obligation to provide service, but no a full abandonment). The reason given is that V&S now has a “significant car storage opportunity”. "Expect that to be challenged by KVCN and others now that the 11 year SE Colorado drought is finally over and there were two OFA’s in the wings that think the line can be made viable. This may get even more interesting when regulating agencies deal with rationalized plant by A&K that may be needed again and was at one point (still?) under contractual agreement or governed by state statute. A&K is trying a tactic that can cover their past blunders and make it unattractive to a new buyer/ easier to force into abandonment. The chess game rolls on.
That “significant car storage issue” extends to tank cars now without a purpose and idled coal hopper sets that are all over the place out here.
With the “abandonment” converted to a "discontinuance&q
Some folks need a dose of reality. This line is dead and should have been torn up long ago, it ain’t commin back. In the late days of the SP it handled a fair amount of traffic but it was basically a bridge from Tenessee pass to points east, very little online industry from Pueblo to the Kansas line and far less today. UP and BN have zero reason to utilize Towner as they can move their traffic on their own lines and Towner has no one else to bridge to. There is no longer any connection to K&O in Kansas.
I know the marketing folks at the K&O, previously CKRY and a decade ago there were only about 2 elevators on the entire segment that did occasional seasonal business of a handful of cars here and there. That isn’t enough to justify a business and doesn’t nearly justify costs of fuel, crews, track maintanance, taxes etc. There is no silver bullet on the horizon, no mining prospects or gas or oil near there (I was curious and asked some who would know) and although Colorado is not now in the drought conditions it had been in, it is easily and quickly cyclical so few want to invest in growing in that region. All across Eastern Colorado, small towns are drying up, as the older generations die off and the younger family members want nothing to do with farming. These familys, farms and communities are not coming back, a temporary repreive from the drought is not going to reverse this trend. This line runs mostly through Kiowa County which is quite large but total population is about 1500 and shrinking, there is no opportunity there and railraods are not going to create it for them.
For what volume of grain that is grown there it makes far more sense that instead of trucking over to Eads Colorado on the Towner line, to truck it maybe 40 miles more to the BN east west line in Southern Colorado. There just is no where near, nor is there anything forseeable that will create the kind of online traffic enough to economically justify the line. And forget tourist trains, the li
Heating up:
http://www.stb.dot.gov/FILINGS/all.nsf/WEBUNID/4E274F1AD1F1AA6E85257F150052D0AC?OpenDocument
This is an initial part of what slot racer and falcon48 were not seeing. There is a whole lot of related “baggage” that has a good chance of being acted upon in addition to this. While A&K is a bad actor, they aren’t the only ones abusing the abandonment process,… but adding their arrogant disregard for what happens after they gut a railroad corridor and leave a wide trail of destruction/ bad agreements/confusion in their wake, makes them persona-non-grata in this state. Wouldn’t be surprised at all if some of them (A&K’s employees, agents and proxies) find themselves threatened with civil fines and/or jail for their 3 past failures here.
They’ve already been called “scoundrels” in other dockets by the STB and others, which should have been a clear warning.
A few comments in response to mudchicken’s latest post:
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The “abandonment” V&S previously filed is completely voluntary. It is under no obligation to continue to pursue it. Further, even if the authority becomes effective, V&S is under no obligation to exercise it.
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It’s alway a little dicey predicting what a regulatory agency like STB might do. But I’ll stick my neck out. The most STB is likely to do is to decide that this abandonment/discontinuance is too controversial for its expedited “notice of exemption” procedure, dismiss both the “abandonment” and revised “discontinuance” notices and direct V&S to file either a petition for exemption or an application for whatever regulatory authority they want. Another reason the might take this approach is because of the complaint the Colorado Wheat group filed against V&S. While this was not a “shipper” complaint, and doesn’t automatically make a notice of exemption procedure unavailable, STB might use use this as justification for not allowing the notice of exemption to go forward. Note that neither of these options would force V&S to continue pursuing an abandonment. STB is very unlikely to require V&S to continue pursuing an abandonment that it now says it doesn’t want.
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More likely, the Board will deny the opponents’ petition and allow the discontinuance to become effective. In the process of denying it, STB will note that the opponents’ main interest seems to be in forcing V&S to sell the line to them. They will then note that the opponents have the ability to force a sale of the line that doesn’t depend on an “abandonment” or an OFA (“offer of financial assistance”, a forced sale procedure only available in abandonments). That avenue is a forced “feeder line” sale under 49 USC 10907 (the sa