CINCINNATI — Voters will have their say on the sale of the Cincinnati Southern Railway on Nov. 7.
WXIX-TV reports that Thursday, the railway board of trustees voted unanimously to place the proposed sale of the line from Cincinnati to Chattanooga, Tenn., on the ballot. If a majority of voters approve, the nation’s only municipally owned interstate rail line would be purchased by Norfolk Southern Railway for $1.62 billion. Money from the sale would be placed in a trust fund, which would provide annual payouts for city infrastructure projects.
Norfolk Southern’s agreement to purchase the railroad was announced last November [see “Norfolk Southern to buy CNO&TP line …,” Trains News Wire, Nov. 21, 2022]. NS and its predecessors have leased and operated the line through a subsidiary, the Cincinnati, New Orleans & Texas Pacific, since 1881. The 1869 law creating the railroad requires Cincinnati voters to approve any sale.
The trustees said in a statement that the sale and creation of a trust fund “will likely more than double” potential earnings compared to a continued lease. The statement said 2024 lease proceeds are projected at $26.5 million, while an estimated $56 million would would be available from the trust fund.
The statement also said the trustees voted to place the issue on the November ballot — the first available date — because they have “concluded that the sooner the voters consider the sale of CSR, the sooner the sale proceeds can be invested in a trust fund to begin generating earnings to improve existing infrastructure.”
While the agreement was announced last year, it took an act of the state legislature to allow money from the sale to be used for infrastructure projects instead of general debt repayment. That finally passed as part of the state’s transportation budget [see “Ohio legislature passes bill …,” News Wire, March 30, 2023].
But the proposed sale has faced headwinds over the negative views of Norfolk Southern in the wake of February’s derailment in East Palestine, Ohio. And WCPO-TV reports there are opponents who believe the city is not getting enough for the railroad.
What do the Kentucky and Tennessee state and local governments think of the sale? I presume that the CNO&TP real property (land, structures, etc.) would become taxable property and potential revenue for governments once NS assumes ownership.