LINDA LIPP, Greater Fort Wayne Business Weekly
lindal@fwbusiness.com
The Regional Port Authority of Northwest Ohio is seeking $95.8 million in federal stimulus funds to acquire and rehabilitate a 51-mile stretch of railroad that runs between Liberty Center, just east of Napoleon, Ohio, across the Indiana state line to Woodburn.
The port authority, headquartered in Defiance, was created by Defiance, Fulton, Henry and Paulding counties in 2008 "to be a tool for economic development, not the tool for economic development," said Jerry Arkebauer, its executive director. But because the railroad in question, the Maumee & Western, runs through three of the four counties in the port authority's jurisdiction - Defiance, Henry and Paulding - the port authority was the logical body to undertake the project.
The counties that founded the authority "gave it no particular mandate other than whatever it could do to promote economic development," Arkebauer said, "but it always was presumed that (the railroad rehabilitation) was one of the things we could do."
The authority had no revenue source for such an ambitious project, however, "and we didn't even know if we had a willing seller," Arkebauer said.
Enter the federal Transportation Investment Generating Economic Recovery program, which was designed to create jobs and stimulate the economic recovery through just this type of project.
Currently, the short M&W railroad, owned by RMW Ventures LLC, is in such poor shape that it is only usable from each end in. The middle section is unusable, making through trips impossible.
Nevertheless, the M&W serves more than a dozen clients, including Campbell's Soup in Napoleon, which employs 1,500 people. There are another two dozen potential users, including the General Motors plant in Defiance. Rehabilitation of the rail line would allow the GM powertrain foundry in Defiance to receive direct rail deliveries of molten aluminum from Fort Wayne, giving it a competitive boost, the port authority' application for federal funds noted.
The port authority's proposal for the rail line goes beyond its rehabilitation for freight use, however. It would like to upgrade the line, which is in a suggested corridor for high-speed rail, to meet the more stringent requirements - such as new, continuously welded 115-pound rail - for that passenger service.
"We think as long as we're rebuilding it, we can do it the right way the first time, Arkebauer said.
The M&W connects on the west with the single-track Norfolk & Southern Railroad that continues to the main Norfolk & Southern line in Fort Wayne. The second connection is with CSX's double-track main line in Defiance, Ohio. Just west of Liberty Center, Ohio, the M&W crosses, but does not connect with, the Indiana & Ohio Railway.
Port authorities in Ohio "have authorized purposes that are very broad," Arkebauer said. They are permitted involvement in transportation, housing, education and a range of other economic-development projects. Port authorities in other Ohio cities have developed stadiums, airport hubs and, perhaps most famously, the Rock and Roll Hall of Fame in Cleveland.
Two other port authorities in Ohio were created to own short-line railroads. In both cases, the port authorities entered into agreements with independent operators to provide freight service on the lines.
The TIGER application anticipates that the northwest Ohio port authority would take ownership of the rail line, but M&W would act as the port authority's agent in the reconstruction of the 51 miles of track and other improvements.
The project would be considered a "public project" due to the authority's ownership, and would be subject to public bidding and construction wage levels set under Ohio's prevailing-wage law.
The $15,000 cost of the application for TIGER funds was picked up by the northwest Ohio port authority, M&W, Henry and Defiance counties, the Community Improvement Corps. in Henry and Defiance counties, the cities of Napoleon and Defiance and three private companies in Paulding County.
"We believe the port authority acquiring the railroad brings a new regional perspective toward improving freight service along the line. Other political entities see the value of the port authority being involved and are willing to participate financially in the preparation of the application," said John Rosebrock, chairman of the authority's board of directors, in a written statement.
Arkebauer said he doesn't know how the port authority's request for federal funds will stack up against other proposals, although he expects there will be more applications than there are funds to go around. But unlike some other proposals the Department of Transportation will receive, "This project is ready to go. We can start next spring," he said.
The application estimates the cost of acquiring the railroad at $9.6 million; with the lion's share of the funding request, more than $80 million, going toward construction.
Awards of TIGER funds must be made no later than mid-February, but a decision on the port authority's proposal could come any time before that, Arkebauer said.