The petition notes that Iowa Pacific ceased operations in June. According to the Santa Cruz Sentinel, Iowa Pacific defaulted on its contract with the Santa Cruz County Regional Transportation Commission, which owns the line that runs from Watsonville Junction to Davenport, Calif.
Iowa Pacific left with unpaid debts, and some 100 railcars in storage, the newspaper reported.
The commission board approved the contract with Progressive Rail amidst a rail-trail controversy, “one of the most contentious local public policy issues in recent history,” the newspaper said.
At issue is the future of the northern section of the line. The commission has a study under way to determine the viability of commuter rail operations. The study should be finished in December.
If the commission decides against commuter rail, it will tear up the northern portion of the line and convert it for trail use. In the meantime, Progressive Rail will provide service to shippers on seven miles on the southern end, with the option of walking away from the contract if the commission decides to abandon the northern section.
The newspaper reported that the commission used state funds to buy the rail line from Union Pacific in 2012 for $14.2 million. If commissioners decide against developing commuter rail, they will be obligated to repay some $11 million.
I wonder if the “poison pill” that was in the Hoosier State deal is what bled money from Iowa Pacific that has lead to these other business failures. IP backed out of the HS deal because as ridership and revenue improved (which did over almost the entire time of their operation, they got less money from Indiana and Amtrak got more, even though IP needed a revenue floor to stay solvent. Maybe the bleeding from the HS deal is what has caused these problems
It appears that due to a large winter storm in 2016, the track north of Watsonville suffered a large washout. It will cost about $3M to fix and Iowa Pacific says they cannot possibly get their money back in the life of the contract as they were on the hook for maintenance, therefore they chose to walk away.
The Santa Cruz Railroad Commission agreed to repair the washout as part of the Progressive Rail contract.
This isn’t the first washout on this branch line. UP had large washouts back in 2011 & 2014 that was eventually repaired. The span at La Selva Beach had to be replaced. The lines proximity to the ocean front and its great views, is also a liability when large winter storms bring high waves and torrential rains.
@THEODORE FELDMANN: Ed Ellis had a money maker with his rail operations in the Permian Basin. He sold out just before frac oil took a dive. He seems to want to be the next Genesee & Wyoming, but doesn’t have the capital to upgrade or enhance these properties, so he strings them out on car storage revenue.
His other ventures have been unique, (IND to CHI for Amtrak) and he has bid on various passenger deals. His Pullman deal is dead. Amtrak banning 3rd party passenger cars now.
But its clear, if he can’t make money, he lets it die a slow death and walks away. That debacle in Texas, where he laid off the entire staff when the tourism boom ended was odd. Because the next operator was more than happy to bring them all back on immediately to the payroll.
I really want to like Ed Ellis, really I do, but don’t we see a clear pattern in these various Iowa Pacific news items? I recently checked out his operation on the former Illinois Central from Granada toward Jackson, MS: Miles of stored cars to the South, operations to the North but with lots of weeds and looking rather rough. I hope this wonderful line is not next on the list of those lost.
Iowa Pacific subsidiary SC&MB RR owes the Santa Cruz Railroad Commission a total of around $80,000. $23,000 is owed from the last Christmas Train and the rest are fines for not maintaining the ROW per the contract.
Progressive Rail has agreed not to store any more un-related rail cars on the ROW. They will not be obligated to restore the Christmas Train until the rail commission completes the regional transit study. PR is free to pursue any new business along the line for the life of the contract (10 years). While they were empty tank cars, locals were upset any tank cars are being stored in their area.
They are not required nor were requested to pull or abandon any track.
As for local rail transit, they want to duplicate what the North SF Bay (Marin-Santa Rosa) has done with heavy rail to reduce N/S coastal driving congestion. There is also a study underway to connect SZ to the California HSR, either bus or by existing rail.
There was a heavy turnout from rail dependent employees saying if they close the line, their companies will close or move.
There were other demands by enviromental groups, like no maintenance of engine equipment on the ROW, closure of the Davenport line for a rail trail, no propane or oil tankers. Most of the complaints centered on the fact that federal rail law overrules local environmental laws.
Interesting observations, Mr. Rice, similar to my own.
Ok… Im a for commuter rail. But if the northern part of this is what I think it is (Santa Cruz to the old cement plant at Davenport, or at least the interchange with the Santa Cruz Big Trees and Western to Davenport) this is ludicrous. There’s no population in there. Could someone with a more current knowledge enlighten me? I moved out of the area in 2003
There are a bunch of tank cars in storage north of Watsonville along Gallaghan Slough. Easy to store there because it is surrounded by thick trees. The big customer in Watsonville is Martinelli’s (the apple juice maker). As you head farther north, the ROW has lots of vines and weeds creeping over the rails in places in Capitola.
San Lorenzo Lumber is the only online customer north of Mora Street. And the Cemex industrial lead in Davenport doesn’t have any cars on its sidings and they look pretty rusty.
The only commuter rail option I can see is connecting Santa Cruz with the new HSR station going in Gilroy. But not sure what the value is if people can just drive CA-17 to Los Gatos/San Jose in half the time.
The San Lorenzo branch is cut north of Olympia. No options there.
The line is surrounded by residential north and south of Santa Cruz.
I don’t see a bright future on this one.
The northern section of the line they’re talking about for commuter rail is not the portion from Santa Cruz to Davenport, but instead the portion from Capitola(maybe a little further south) to Santa Cruz which is heavily congested in the morning and afternoon commutes along State Route 1. There’s also the problem with the Santa Cruz & Big Trees, they could probably logically file an objection to the rail line being removed for a trail as it would cut them off from the national network(and they could run freight on that line as well, sand and the occasional lumber load).
Since the cement works in Davenport closed there are no major shippers on that line from Santa Cruz to Davenport. It’s a beautiful stretch of coast and railroad that would make a wonderful dinner train ride but as a freight line or commuter line is has no utility any longer. I seriously doubt the powers that be in Santa Cruz would be willing to spend the money that it would take to make that line a commuter rail line.
PGR is based in Lakeville MN, not Lakeview
The passenger discussion is focused on traffic from Westside Santa Cruz east and south to Watsonville and Pajaro (Watsonville Jct.)… not the line north of the city to the former cement plant. I’m sure shippers in Watsonville will appreciate resumption of freight service and we’ll have to see if Progressive Rail can make a business of that.
The political picture, when it comes to passenger service, is chaotic. The usual progressive coalitions that have ruled Santa Cruz city and county government since the 1970’s are fractured on this issue. Watsonville officials earnestly want workable freight service in order to maintain and expand economic development there, but beyond that, there’s nothing remotely like consensus on what to do with the line. Expect this to remain a live issue for a long time to come.
Commuter train would be good if the route to San Jose via WJ, Hollister and Gilroy wasn’t so circuitous. Because highway 17 “over the hill” is a congested nightmare. I’d go to Santa Cruz more often if it wasn’t, but since I live and work in the South Bay it’s just untenable on a weekday evening and not much better on the weekend.
I agree with Erasmus. Commuter rail–are you kidding? Now this would make a nice line for a dinner train. Lots of beautiful ocean views with your surf and turf.