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Canadian Pacific and Illinois officials face off in property battle NEWSWIRE

By Richard Wronski | March 13, 2017

State officials seek to use eminent domain powers for highway work

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Canadian Pacific’s Bensenville Yard as seen from the window of a commercial flight that just took off from Chicago’s O’Hare International Airport in September 2015.
Chris Guss
CHICAGO — Canadian Pacific is embroiled in a high-stakes battle with Illinois officials over use of the railroad’s vitally important yard next to Chicago’s O’Hare International Airport to build a multi-billion-dollar highway project.

After a preliminary round ended with a CP loss in U.S. District Court in Chicago, the fight is now being waged in Washington before the Surface Transportation Board. There, the Illinois State Toll Highway Authority is seeking the green light to condemn property in order to build a new toll road over CP rights-of-way and, ultimately, through CP’s Bensenville Yard.

CP contends, however, that these “irreplaceable” properties must remain intact because they are crucial to maintaining the fluidity and efficiency of CP itself and the nation’s other railroads.

“The proposed (condemnation) would indisputably interfere with current rail operations and that interference could prove disastrous to CP, its customers, and to the national rail network as a whole,” CP officials wrote in a lengthy filing in February with the STB.

Illinois Tollway officials, meanwhile, contend that CP’s intransigence is jeopardizing a $3.4-billion toll road designed to open up much-needed western access to the world’s second-busiest airport.

The Tollway has recruited some heavy political support. Both Illinois’ U.S. senators and a bipartisan group of 16 representatives have signed a letter to STB Chairwoman Ann Begeman urging the board to support the Tollway’s request and move quickly to proceed with the highway project.

But experts say the issue before the STB could easily drag out for an extended period. Meanwhile, the Tollway says it faces the loss of millions of dollars in additional construction costs — at least $200,000 for each month the project is delayed.

U.S. Rep. Dan Lipinski, D-Ill., is one of the supporters of the Tollway’s position, but as a member of the House Transportation and Infrastructure Committee, said he understands the STB’s role as overseer of the nation’s railroads.

“What this (dispute) really comes down to is, does CP have a case that there would be disruption to its operations if the tollway was able to put its road through CP property?” Lipinski says. “The Tollway has convinced me that it would not have an impact, but they have to convince the STB of that also.”

Both sides had been negotiating for years over the Tollway’s need to access the Bensenville Yard and CP right-of-way just north of the yard. The Bensenville Yard and tracks are operated by CP’s subsidiary, Soo Line Railroad Co.

CP reportedly asked for $114 million for land acquisition and improvements to the Bensenville Yard in March 2014. The Tollway’s offer wasn’t disclosed, but CP ultimately broke off talks, and Tollway Chairman Robert Schillerstrom called the move “mystifying and unbelievably irresponsible.”

A reduced image of an Illinois Tollway project that would cross a portion of Canadian Pacific’s Bensenville Yard to the west of O’Hare International Airport.
Illinois Tollway website
The immediate issue before the STB is the Tollway’s desire for permanent and temporary easements in order to construct five highway bridges over CP tracks running along the western edge of O’Hare. Union Pacific also runs track parallel to CP.

The Tollway’s massive program is known as the Elgin-O’Hare Western Access project. The $3.4-billion program involves construction of two new toll roads leading to and skirting O’Hare’s western edge. The interchange where the two toll roads will meet is the site where the Tollway wants to build its bridges. That interchange is also where the Tollway plans to access airport property for a proposed new terminal that some critics scoff is unlikely to be built any time soon.

Tollway officials call the interchange the “keystone” of their project; without it, the program “does not work.”

Each of the five bridges will only require one support pier on railroad property. The piers would be placed on a shared property line between CP and UP rights-of-way “and will leave ample room for future expansion of the railroads’ operations,” Tollway officials write in their STB filing.

Illinois officials say they’ve been negotiating a purchase price for acquisition of easements to cross UP’s tracks, and do not anticipate they will need to assert eminent domain authority to acquire property rights from UP.

The Tollway reportedly offered CP as much as $3.3 million for the easements. But it said CP broke off four years’ worth of negotiations in April 2016, and claimed that CP has “no intention of selling any interest in this property.”

CP’s representative declined comment to Trains News Wire regarding the dispute, but provided a copy of a letter CP’s Keith Creel sent Monday to the Illinois Congressional delegation.

Creel writes that there has never been an agreement to sell railroad property to the Tollway, and that negotiating away “irreplaceable rail capacity is not an option.”

“If the Tollway proceeds with construction of the interchange as planned, either it will waste hundreds of millions, if not billions, of dollars more in building a project that cannot be completed, or it will harm CP’s rail operations and the national rail network and jeopardize the billions of dollars in public and private dollars that have been spent to address rail issues in the Chicago Terminal,” Creel writes.

CP believes the Tollway has other options that would not burden the rail network, Creel stated. The letter also rejected the “outrageous claim” that it was CP’s idea to route the toll road through “its most important rail yard in the country.”

With talks broken down, Tollway officials say they must now exercise eminent domain to acquire the bridge easements, and has petitioned the STB for a ruling that condemnation power “will not unreasonably interfere with railroad operations, and therefore is not preempted by federal law, namely the Interstate Commerce Commission Termination Act of 1995.

The Tollway’s petition only focuses on the bridges needed for the interchange; it does not seek access yet to the Bensenville Yard and describes its plans for the yard as only preliminary. CP takes issue with this.

Just to the south lies Bensenville Yard. Tollway documents, including two voluminous environmental impact studies, have always depicted the south O’Hare “bypass” toll road cutting through Bensenville Yard.

In its petition to the STB, the Tollway officials write that during the past 11 years of highway project development, CP “never indicated it would completely refuse to allow access” to the west side of O’Hare or that it objected to the location of the interchange. Indeed, CP “remained silent” while multiple public agencies conducted hearings and studies.

The Tollway called an “eleventh hour suggestion” by the CP that it develop another route for the roadway “simply unreasonable.”

Tollway’s filing doesn’t paint this simply as a rail versus highway issue, however. A good deal of the agency’s filing describes the importance of O’Hare and its place in the national air transportation system. The airport is in the midst of a $13.3-billion modernization program, launched in 2005, that calls for reconfigured runways and upgraded terminal and support facilities, in a strategy to reduce delays and improve efficiency.

By the same token, CP says the bigger issue is interstate commerce. Its filing emphasizes Chicago’s crucial role as the heart of the North American rail network, with 500 freight trains and 800 passenger trains operating into and out of the city each day.

Six of the seven Class I freight railroads and three intermediate switch carriers operate in Chicago, handling 25 percent of all U.S. rail freight. CP said roughly 20 percent all CP traffic and 48 percent of all interchange traffic touched Chicago in 2016.

Nevertheless, Tollway officials say that Bensenville Yard is not at issue before the STB, and that its present concern is only with the bridge easements. However, CP contends it is “inevitable” that the interchange will lead to the Tollway’s need to cross the yard.

Tollway officials request that the STB rule before the end of March, so that bridge contracts can be awarded in July with the start of construction to begin this fall.

Transportation experts such as De Paul University’s Joseph Schwieterman says the STB will be cautious and quick decision is unlikely.

“There’s a lot at stake here,” Schwieterman says. “There’s good chance a precedent will be set that can affect future projects.”

In its 142-page filing last month, CP argues the Tollway “ignores a deep and wide well of authority holding” that takings of rail property for conflicting use are preempted.

The railroad’s filing says the property at issue, Bensenville Yard and the right-of-way, are two of the most important rail operating properties in CP’s entire system, and are the “fragile and already congested heart of the national rail network.”

The railroad says the bridge construction would require shutting down CP’s mainline track repeatedly for up to 14 hours at a time over an extended period, “which would be enormously disruptive to interstate rail operations and would jeopardize the fluidity of an already congested Chicago rail network.”

The takings would also prevent CP from adding capacity in the right of way to meet demand for rail service during the five-year construction period and would permanently limit CP’s ability to add capacity after construction ends, according to the filing.

Furthermore, the railroad argues, once the interchange is completed, the Tollway would be locked into a route through the yard for the southern leg of the western bypass, connecting the interchange to Interstate 294 south of the yard.

Completing the bypass would require that the Tollway acquire 35 to 40 acres of Bensenville yard, “which would disrupt CP’s operations at this critical yard,” railroad officials say.

The railroad disputes the Tollway’s contention that it has no other alternatives, saying other options that would not burden interstate rail transportation do exist, but that the Tollway refuses to consider them, “evidently due to local politics.”

“Thus, while the Tollway seeks to portray CP as standing in the way of construction of a project of regional and national significance,” according to the railroad filing, “the reality is that this dispute is a matter of the Tollway placing local interests over national interests in a sound rail system.”

15 thoughts on “Canadian Pacific and Illinois officials face off in property battle NEWSWIRE

  1. Why doesn’t CP just close Bensenville and do classification at Milwaukee, then run trains directly through Chicago (via IHB/BRC) to connections? Doesn’t NS basically do that with trains out of Elkhart, and BNSF from Galesburg?

  2. This presents ample opportunity for head-scratching. The Milwaukee built Ben’ville pretty much from scratch with two humps back in the 1950’s when traffic warranted. The joint CNW-Milw.Techney cutoff was rerouted when O’Hare expanded.Later on CP removed the humps and bowl, only to restore the latter later as yard usage increased. Someone with better updated knowledge?

  3. I have to wonder looking thru news reporting on this if E Hunter Harrison’s departure from CP had an impact on this. If Harrison was trying to squeeze as much money as he could. 140million would help make for better a quarterly profit.

  4. It’s about the money. The only serious incursion onto CP’s property is for the ramp to Irving Park Road. All of the main right of way runs across industrial property or through the old engine servicing area, which CP barely uses these days and is not integral to operations. Everything else will be bridge columns. Arguably, if the construction will disrupt mainline operations with periodic shutdowns, CP does have a case. That said, the proposed tollroad is likely a benefit to CP in that they will get direct access to the tollway system on Green Street / Franklin Ave., which will benefit CP’s intermodal operations in Bensenville. Both CP and UP have new infrastructure around the west side of O’Hare, which was built as part of the overall master plan, accounting for the tollway alignment.

    I would take issue with CP’s claim that Bensenville is that critical to operations. It rarely looks as full as Proviso does and the west classification tracks (which are possibly most impacted by the proposed tollway) are rarely used. Perhaps CP has its own master plan in play, but this feels like a money grab.

    Either way, this project has not been a secret and the routing has been well known for a very long time.

  5. My understanding is the only hump yard left on the entire CP system is St Paul, which recently had the southeast leads extended to add to capacity in what’s really the most system vital class yard on CP.

    There is indeed some carload freight flat switching and block swapping that happens there that could be moved elsewhere. My understanding is that most CP true interchange or through train Chicago classification happens at BRC Clearing. Bensenville sits on valuable real estate (as airport proximate real estate always is), so it makes economic sense to shift as much of the carload function elsewhere (IHB Blue Island?).

    But Bensenville is where all the Chicago intermodal ramping for CP happens (after Schiller Park was closed for this purpose and the Bensenville ramp expanded). I don’t know anyplace CP could easily and cost-effectively move this function.

    Finally the Techny cutoff hosting native UP and trackage rights CP freight trains is somewhat limited in capacity with two busy interlockings, with Metra and CN at Deval and at Techny itself where CP shifts to Metra owned trackage busy with commuter trains and Amtrak Hiawatha Service. That likely means staging trains in Bensenville (or somewhere, but where?) during the “dinky rush”.

    All this adds up to the need for some but a potentially smaller continued CP footprint at Bensenville, and gives some but not total credence to Creel’s statement that there may be a need to add a track to stage long outbound freights along the west side of the airport.

    All in all, and being somewhat familiar with the bipartisan style of Illinois political corruption (democrats get Cook County including the airport, republicans get the collar counties including Du Page where much of the disputed land is located as well as including the tollway authority itself), I smell an artificially cheap eminent domain land deal brokered by the connected that gets spun off at a much larger yet still potentially below market parceled price after the highway is built.

  6. For CP, it is a long slow run from Bensenville to NS, CSX, or CP’s trackage rights to Detroit. While Bensenville may be a great spot to terminate intermodal trains from the northwest, there may be a better route from St. Paul to points east of Chicago. Negotiate a trackage rights deal with Iowa Interstate, CSX, and Metra from Davenport to Blue Island and through traffic can bypass much of Chicago’s congestion.

  7. This just shows local gov non-interest in promoting infrastructure that makes the country strong…i.e. freight rail. The roads could be placed around. I am sure there are some neighborhoods in the area that need condemning. As in most of Chicago.

  8. It’s absolutely incredible how the Tollway Authority always seems able to come up with the huge $$$ amounts for expansion along with the political back-benching to support it. Been that way for decades. I-355 was I think their last blot upon the west suburban landscape. But when transit-minded officials and Metra pitched the so-called “Star Line” circumferential it went nowhere for lack of funding. That of course, gave CN the time and opening to grab the EJ&E ROW central to the Star Line initiative.

    Cong. Lipinski has fancied himself a transit supporter during his entire career but when the big $$$ highway interests come knocking, he shows his true colors. Supporting yet another massive suburban highway project that will vastly increase traffic congestion in that already congested region but a short time after completion. But Cong. Lipinski can be relied upon, I’m sure, to prattle on and on if asked about the perils of climate change and global warming caused largely by carbon emissions.

    Not stated in this article is the impact construction will have on Metra Milwaukee District West Line service. Of course, the Tollway supporters and builders don’t give a rat’s ass about that. Commuter trains? No one rides them. We’ll shut ‘me down whenever we want and the local pols will like it or lump it. They can always make a show of fighting us to show their constituents they are looking after them but in the end they”ll shut up. Because in their hearts they know we are where the REAL patriotic Americans are, out on our “freeways” and toll roads unencumbered by pesky train schedules.

    Sic Transit Gloria even in the land of the third largest commuter rail system in the nation.

  9. It would appear that the tollway seeks to have the roadway completely elevated above Bensenville Yard, thus, only support columns need be carefully placed between specific pairs of tracks, or, perhaps, in place of one or more tracks directly under the roadway.

    But, as usual, the PhD types that come up with these cockamamie schemes never ask ‘the workers’ about how their jobs would be affected. Case in point…construction crew access including heavy machinery to a functioning, active railroad yard…crossing and working between active tracks. All I see is trouble on that account. Whether it’s the construction crew being oblivious to railroad operations or fouling an active track without knowledge and consent of the yardmaster, I have strong concerns for the safety of both the construction crews as well as railroad workers.

    And one of the ‘usually forgotten about’ items is snow. Too many times the ‘whiz kids’ from somewhere down south come up with great ideas and implement them, only to fail miserably when snows. In this case, WHERE would the snow plowed from the elevated roadways go? And how would THAT affect the safety of railroad employees working in the yard below? From having a massive pile of snow dropping down on them completely by surprise to having to trudge through a potentially substantial added depth of snow to accomplish their jobs, the safety of the railroad employees is seriously impacted, in my opinion. Oh…and what about a ‘snow dump’ (or rock salt) right down the exhaust stack of a locomotive, or into the radiators?

  10. Mr. Atkinson’s comments about snow removal issues and construction safety issues seem quit valid. Wonder if the Tollway thought of this. Meanwhile, look how long lived CREATE is ……

  11. They should just build their danged airport underground! Maybe that won’t work so well, but it will spend lots of money and grease many palms.
    Then build another airport somewhere else, connect it with fast electric trains. The underground facility will make for great parking.
    Problem solved!

  12. CP should sell the land for the tollway with the with the proviso that appropriate off ramps are built to facilitate development of the rest of the property. CP could use IHB Norpaul yard which is currently hardly used and is better connected to both CP lines since the improvements at B-12 a few years ago. The connections in Davenport to Iowa Interstate would require back up and run around moves for trains to and from the old Milwaukee to the old Rock Island for traffic from St. Paul.

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