The deal is off for a Canadian company to purchase the 36-mile Youngstown and Southern rail line from the Columbiana County Port Authority.
A memorandum of understanding was signed in April for Tervita, an environmental and energy-services company, to purchase the line for $2.9 million.
The purchase was set to be finalized in mid-July but was postponed to early this month — and then Tervita announced its decision four days before the deal was to closed, said Tracy Drake, port authority executive director.
“Under the memorandum, [Tervita] could walk away if there were environmental issues,” he said.
Drake said Tervita believes there is contamination near the car barn in Negley.
“Our understanding is that it was created in the 1990s, maybe three owners ago, by an off-site oil spill that was not on railroad property but encroached on it. It had been our understanding that it had been remediated,” Drake said.
Now the port authority will receive Tervita’s report and turn it over to its environmental firm.
“If there are issues, we’ll clean them up,” Drake said.
Tervita had given the port authority a $150,000 “good faith payment,” said Julianne Kaercher, public- information officer for the Ohio Rail Development Commission.
“If the environmental claims are valid, it would go back to the company. If there is no environmental issue, then the port authority can keep it,” she said.
The port authority owes the rail commission $1.1 million in loans, Kaercher said.
“With $1.1 million left to be paid off, part of the deal was that we would forgive late fees and the penalties and take no less than $1 million with the sale,” she said.
Kaercher said the commission expects to discuss loan repayment at its next meeting.
The line runs through Boardman, whose public officials opposed the sale.
“I am familiar with the situation, and the township is keeping its ear close to the rail line to hear exactly what happens with the future potential of that track,” said township Administrator Jason Loree.
Drake said other entities had expressed interest in the line, and he expects that to continue because of the growth of the oil-and-natural-gas industry in the region.
“It was a disappointment that they didn’t go forward, but we can’t control other people’s actions,” he said.