East Texas

By BETTY WATERS
Staff Writer

HENDERSON -- Negotiators hoping to acquire a railroad track between Henderson and Overton for community use will make an offer early in the new year to Union Pacific Railroad, according to John Cloutier, president of Rusk County Rural Rail Transportation District board of directors.

District officials reached out to Union Pacific last September expressing an interest in the future of the 15.1-mile track, which the company intends to abandon.

Union Pacific maintained upfront that the track is worth $3.1 million if the company either tore up the tracks and salvaged the steel or used it somewhere else. The land would revert to adjacent landowners and the public railroad right of way would be gone. But the corridor remains intact as long as the rail is there.

Rail district representatives went back to Union Pacific asking the company to consider making the line a donation since the district is a fledgling organization with zero dedicated funding. They further stressed that they could help the company because the line would still feed into Union Pacific's main trunk if the district revitalized it.

"For us to succeed, we have to help you succeed," Cloutier said they told the company.

"We laid out our position and reached for the stars. They gave (the donation proposal) a good deal of consideration because they took a few weeks to get back to us," Cloutier said. "I feel like they are dealing with us in good faith, so we're proceeding."

Union Pacific replied it was not in the position to make that large a donation, but lowered its value of the steel to $1.6 million.

Cloutier believes not only the negotiations, but a drop in the cost of scrap the last few months with the price of oil influenced Union Pacific to change its value of the track.

"We responded that after the holidays, we're going to come back to them and make an offer," Cloutier said. "We're going to do as much as we can (in the negotiations) to drive the price down. If we do acquire it, they would retain the first mile where it comes off the main line because they have to have control of the intersection. The amount we would acquire would be 14.1 miles."

Prior to start of the talks, Union Pacific notified local officials, users of the line and authorities such as the surface transportation board and different administrations that manage railroads in Texas and other states, that the company was going to start a lengthy process to abandon the line, which connects with a main track running from Longview to Palestine.

Henderson and Rusk County leaders want to maintain rail service to benefit the local economy.

"Once we get a price that both sides agree on," Cloutier said, "our intent is to spend a small amount of time developing our business model to make sure that should we decide to acquire this line on behalf of taxpayers of Rusk County that we have a positive cash flow at the end of the deal � that not only do we save the line, but we can do it at break-even (basis)."

The rail district president sees the possibility of funding assistance since talk is increasing in Washington and Austin about investments by federal and state governments in infrastructure renewal as one way to address the ailing economy. The district will be ready to apply for grants that become available to help fund the project of acquiring and revitalizing the Henderson-Overton railroad track to keep it available for local business use, according to Cloutier.

"I think it's prudent to be upfront and prepared with all your projects written up come February and all the paperwork in telling what you need," Cloutier said.

The rural administration through the U.S. Department of Agriculture already has programs for small communities, such as the rural business enterprise grant, which provided more than $150,000 that helped with acquisition and start of operations of a short line in another part of Texas.

The district is asking Rusk County and the cities of Henderson and Overton to pitch in $29,000 to fund legal and secretarial needs to continue the acquisition process for the rail and to pay for a private appraisal. Currently, the only appraisals of the line are from Union Pacific.

The county has agreed to help, conditioned on the city of Henderson splitting the $29,000 cost. "We're waiting to hear back from the city. We anticipate it is going to do everything it can to fund our effort," Cloutier said. "There are 150 jobs at West Fraser Timber Co. right now that depend on saving that rail line � we know there are many businesses in town that will get back on that line as soon as we invigorate its business potential."

The rail district estimates the line needs a little over a million dollars in maintenance if acquired and expects to enter a financial agreement with a short line operator for the line. More than a dozen interested short line operators have contacted the district.

The state Legislature empowered communities by passing legislation allowing for creation of rail districts. The Rusk County Rail District, Cloutier said, "is local people appointed by the commissioners on the board, so we are really making a community-based decision. By solving some of our problems upfront, it has more value to the community and we have more control over it and it's a better long-term solution that way for us."

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