Aqua America’s decision not to buy rail line telling
How practical is it to oper- ate the controversy-ridden Youngstown & Southern Railroad? Three major companies — Aqua America, Tervita Corp. and Eastern States — have concluded that it isn’t practical at all.
Hence we believe it’s time for an independent evaluation of the 36-mile rail line that runs along Southern Boulevard in Boardman through Columbiana County to Darlington. Pa.
We would urge the Ohio Rail Development Commission, which is familiar with the railroad that’s owned by the Columbiana County Port Authority, to conduct a top-to-bottom review.
The commission provided a $2.2 million loan for the Y&S, which the port authority had hoped to pay off with money from Calgary-based Tervita Corp. That company had agreed last year to pay $2.9 million for the Y&S.
Tracy Drake, chief executive officer of the Columbiana County Port Authority, said at the time that $1.2 million would be used to repay the state rail development commission, while $500,000 would take care of a bank loan.
The state agency had agreed to forgive $1 million in penalties owed by the port authority for falling behind on payments to the agency after another potential buyer, Eastern States, failed to follow through with its purchase.
Given that Drake’s organization has shown itself to be incapable of maintaining the line in the condition that Boardman Township trustees expect, the future of the Y&S is iffy, at best.
The latest setback is the most disappointing because had the deal with a subsidiary of Aqua America gone though, it would have meant local ownership — in a manner of speaking. The subsidiary that signed a letter of intent with the port authority was Aqua Capital Services.
But another subsidiary of Aqua America has local roots: Aqua Ohio.
It provides drinking water to a large portion of Boardman Township, and company officials have a close working relationship with township government.
Boardman trustees have long complained about the port authority — and the owners of the Y&S Railroad before the authority — not cleaning up the tracks to meet zoning codes.
The prospect of an Aqua company owning the railroad gave Boardman officials and others in the Valley who have shared their concerns some encouragement.
Last month, however, Aqua, which had signed a letter of intent with the port authority, pulled out — two months after a public announcement of the impending purchase.
Drake has said the decision to shelve the agreement was made by both sides and that the port authority is working with other companies.
While the authority’s CEO contends that Aqua could still lease some right-of-way — it wants to provide water to hydraulic-fracturing operations in Columbiana County — the failure to conclude the sale is significant.
Condition of the rails
When Tervita, an environmental and energy-services company, pulled out, officials cited the condition of the rails and the cost to fix them as reasons the agreement wasn’t completed.
It also expressed concern about contamination it found near the car barn in Negley.
Drake said he believed the contamination occurred in the 1990s, “maybe three owners ago” by an off-site oil spill. The oil encroached on the Y&S property.
He said it was his understanding the contamination had been remediated, but Tervita disagreed.
Nothing is simple when it comes to the Y&S Railroad, but an independent evaluation should be a relatively easy undertaking for the Ohio Rail Development Commission.