On Tuesday, May 27, 1997, the City of Peoria made an official shift in its policy toward the Kellar Branch rail line. It decided to lease the corridor to the Peoria Park District so they could replace the rails with a recreational trail. Believe it or not, as long as this post is, I’ve left out a number of details to try to make it as summed up as possible.

JUMPING THE GUN

Once the decision was made by the City to turn the Kellar Branch into a trail, the Peoria Park District started writing the government for money to fund the project and secured over $3 million in state and federal grants. The plan was simple: the city would build a 1,800-foot section of track that would connect the north end of the Kellar Branch with a Union Pacific rail spur to the west of Pioneer Park. That would provide alternate rail service to Carver Lumber and Gateway Milling, so they could then tear up the tracks on the Kellar Branch.

But it’s not that simple. Not factored into the City’s plan was the role of the Surface Transportation Board (STB). By not getting STB approval first, the Park District jumped the gun in securing grant money.

THE SURFACE TRANSPORTATION BOARD’S ROLE

The Surface Transportation Board is a federal regulatory agency established by Congress. It was established because railroads “have the characteristics of a natural monopoly, with significant barriers to entry into and exit from the industry…. Thus, [STB] approval is required for entry into or exit from a rail market, and for railroad mergers or acquisitions” to protect shippers (rail customers) from an abuse of market power. (Atkins 4)

In short, the City has to get permission from the STB to tear out the Kellar Branch. Some, like the Journal Star, see this as interference by a federal agency in local affairs. But the only reason it looks that way is because the owner of the rail line in this particular case is the City of Peoria. More commonly, rail lines are owned by “carriers”; that is, actual railroad companies like Union Pacific or BNSF. The City is a “non-carrier.” But the STB doesn’t care whether the owner of the line is a private company or a municipality; their only interest is protecting shippers, such as Carver Lumber and O’Brien Steel.

SETTING THE STAGE FOR A FIGHT

On February 3, 1998, Peoria & Pekin Union Railroad (P&PU), which had been hired by the city to be the carrier on the Kellar Branch, experienced two derailments in one day and immediately ceased service on the line. The city then hired Pioneer Railcorp to assume P&PU’s 20-year contract to be the carrier on the line. They started operating the line on February 20, and by April they were known as Pioneer Industrial Railway (PIRY).

David Jordan explains:

Unlike P&PU, which neglected to perform any maintenance, [PIRY] poured large sums of money to install new crossties, pour ballast, fix a bridge, construct a runaround track to facilitate efficient operation, and replace a turnout damaged in the aforementioned P&PU derailment. Later in the year, Peoria Plastics came on-line as a fourth customer, and in 1999 [PIRY] began storing covered hoppers for the plastics industry.

Well, PIRY wanted to own and operate the line from the start. However, as part of their deal to take over for P&PU, they “agreed to cooperate with the city’s plans for turning the line into a trail,” according to Jordan. Once they were in, however, they started working against the city’s plan and have been working against it ever since.

It didn’t help that the founder and president of Pioneer Railcorp was Guy Brenkman, a very unlikeable fellow who sued Peoria County over their denial of a license for him to open and operate a strip club on Farmington Road called Fantasyland. He won the suit, but cemented his reputation as a most surly individual. Brenkman still has an interest in Pioneer Railcorp, but is no longer actively involved in running the business.

LET THE GAMES BEGIN

Since PIRY wasn’t being especially cooperative with the City’s plans, the City decided to switch carriers, and picked Central Illinois Railroad Company (“CIRY,” subsidiary of DOT Rail in Granville, Ill.) in 2001. Thus began fight number one. The 20-year contract PIRY took over from P&PU didn’t expire until 2004 and PIRY wasn’t going to release the City from it. So the City had no choice but to let PIRY finish out the contract. PIRY won that fight, but during this time, the Kellar Branch lost Gateway Milling (its largest customer), leaving Peoria Plastics and Carver Lumber the only two remaining shippers at the north end of the line in Pioneer Industrial Park.

Fight number two started in July 2004 when PIRY continued operating the line after the expiration of the contract. They argued that the contract had no set expiration date and was binding indefinitely. They filed suit against the City in that matter, and the case is still pending in state court.

Since Pioneer refused to vacate the tracks, the City began an “adverse discontinuance” proceeding with the STB on November 15, 2004. “Adverse discontinuance” simply means forcing a carrier off a rail line against their will. The City won their battle nine months later on August 10, 2005, when the STB ordered PIRY off the tracks, allowing CIRY to take over.

The very next month, on September 12, 2005, the City (technically, CIRY) filed papers with the STB requesting permission to discontinue service on the Kellar Branch so it could be converted to a recreational trail.

PROMISES, PROMISES

Key to getting the STB’s blessing on the City’s rail-to-trail request was cooperation from the shippers on the line. Since the STB’s role is to protect shippers from an abuse of market power, the shippers’ feelings carry a lot of weight with the STB. So the City started courting the shippers back in 2004, when they were trying to get PIRY kicked off the line. It was no secret that eliminating PIRY was the first step toward converting the Kellar Branch to a trail.

In 2004, there were three remaining shippers on the line total. O’Brien Steel was at the southeast end of the line and would be unaffected by the conversion of the line to a recreational trail. Not surprisingly, O’Brien had no problem with replacing PIRY or the conversion. Peoria Plastics said in a letter to the City, “if we can receive the same level of service at a reasonable cost, we have no problem in being served by the west.” Unfortunately, they went out of business within the next year due to foreign competition.

That leaves Carver Lumber as the only shipper at the northwest end of the line. They expressed several concerns to the City in their letter, including their desire for comparable service and “rates that are at, or hopefully below what we are currently paying.” They also asked for assurance that “the City will not allow any interruption of rail service to occur during the planned construction of the Western connection” and that service over the Kellar Branch would not be discontinued until the western connection was “fully operational.”

Public Works Director Steve Van Winkle responded to Carver’s concerns in a letter dated November 10, 2004:

This letter is, in part, to tell you that the City has no intention of discontinuing service over the Kellar Line until the western connection is fully operational. These two projects are currently timed to coincide well. In the event that either is delayed, the City assures you that it will make an adjustment in the timeframe so that there is no interruption of your rail service. We will not discontinue service over the Kellar Line until the westem connection is fully operational.

As for the ability of the City to intercede on your behalf should issues of service andlor cost arise in the future, we call to your attention that we have contracted with DOT for service from the West. Article 14 of that contract specifically provides that DOT shall pick up and deliver cars within 24 hours after being notified by the UP that the cars have been placed on the Peoria Pioneer Spur. The City stands ready and willing to enforce all aspects of its contract with DOT and with the Union Pacific Railroad. The City has the ability, under its agreement with DOT, for all legal remedies up to and including termination which would allow the City to replace their service with another company. I would point out that these are the same assurances that you have under your current working arrangement.

The City has not lived up to those promises.

DERAILMENT, DELAYS

On Saturday, August 27, 2005, the city’s new carrier, CIRY, attempted to take a load of lumber up the Kellar Branch to Carver Lumber using a Trackmobile. The Trackmobile was unable to haul heavily-loaded cars up the steep Kellar Branch grade. The vehicle lost traction and ended up sending the two cars backwards down the line at approximately 30 mph, dragging the Trackmobile with it.

Miraculously, they didn’t hit anyone when they sped across Abington, Madison, Jefferson, and Adams. None of the cars tipped over, nor did the lumber load come loose or fall off. However, the runaway cars did hit the remaining cars that were parked close to the switch where the Kellar Branch connects to the Tazewell & Peoria line (TZPR), derailing them and mangling the track.

CIRY never again attempted a run up the Kellar Branch, even though the western connection was months away from being completed. As a result, Carver had to transload their lumber to trucks to haul it up to their business. Remember Van Winkle’s promise? This interruption was due to gross negligence on the part of CIRY, yet the City never once took any action against them, nor has it agreed to pay back Carver for the additional expense of transloading materials for the months it went without rail service.

BROKEN PROMISES HAVE CONSEQUENCES

The STB approved the City’s request to end service on the Kellar Branch on December 23, 2005. Part of the reasoning for their decision was, “Regulation is not necessary to protect shippers from the abuse of market power. The shippers served by CIRY are aware of the relocation project, do not object, and will continue to be served from the north or from the south.”

Carver Lumber pointed out to the STB in January 2006 that the western spur was not done yet, which prompted the STB to temporarily stay their decision until construction was complete. Carver then pleaded for time to test the new spur to make sure service was comparable before the Kellar Branch was torn out — just like they had requested in their Nov. 2004 letter to the City. The STB granted that request as well.

Then Carver found out what had been predicted by rail experts (including the City’s own railroad commission) all along: service over the western spur was not comparable. Not by a long shot. Service was slower and significantly more expensive. They petitioned the STB to deny the City’s request to discontinue service over the Kellar Branch.

And that’s where we stand today — waiting for the STB to make a final ruling. I’ll try to tie up any loose ends in a postscript to this long summary.

I’ve been covering the ongoing Kellar Branch dispute for some time now, and I occasionally run into people who tell me they just don’t understand what’s going on — that it all seems very complicated. So, today, since there are not one, but two editorials about the Kellar Branch in the Journal Star, I thought it would be a good time to go back to the beginning and provide a quick summary. (I’ve borrowed heavily from David Jordan’s excellent and thorough history.)

WHAT IS THE “KELLAR BRANCH”?

The “Kellar Branch” is a portion of railroad track that runs from the riverfront at the foot of Caroline street by Detweiller Marina up through town passing Springdale Cemetery on the east, bridging War Memorial by the Journal Star, crossing Prospect and Glen, then Knoxville by Junction City, then running northwesterly past Pioneer Parkway and into Pioneer Industrial Park, finally terminating at Route 6.

The Kellar Branch was originally part of the Chicago, Rock Island, & Pacific Railroad (CRI&P) and once ran all the way to Rock Island, Illinois. The portion of the line between Alta and Toulon was abandoned in 1963 and was later converted to a walking/hiking trail now known as the Rock Island Trail. The Kellar Branch gets its name from Kellar Station, a railroad station/depot that used to stand near the current intersection of Northmoor Road and Knoxville Avenue; it was the first stop outside of Peoria back when passenger trains used to run on the CRI&P prior to the early 1930s.

THE KELLAR BRANCH, 1960-1983

Although the Alta-Toulon portion was abandoned, the Kellar Branch experienced growth throughout the 1960s and ’70s thanks to Pabst Brewery in Peoria Heights and the development of Pioneer Industrial Park. By 1971, 18 companies were served via the Kellar Branch.

However, the CRI&P was not the best-managed railroad in the world, going bankrupt three times (1914, 1933, and 1975). The last bankruptcy led to an unsuccessful attempt to sell the railroad to Union Pacific, and ultimately ended in liquidation of its assets in 1980. A couple of railroad companies considered buying the Kellar Branch, including Burlington-Northern, but when Pabst Brewery closed in 1982, interest in purchasing the line dried up. During this time, many customers stopped using the rail line because of its uncertain future.

CITY PURCHASES LINE IN 1984

Enter: the City of Peoria. Peoria and Peoria Heights bought the Kellar Branch from the CRI&P’s trustee in July 1984 for $856,000, not to put in a walking trail, but to restore rail service. The Journal Star explained a few months before the purchase (3/10/84):

The city has stepped in since the demise of the Rock Island to try and restore rail service to industries that had been forced to convert to more expensive forms of transportation. The issue is being pushed ahead also for its potential to attract new business….

The Kellar Branch was given a new formal name: the “Peoria, Peoria Heights, & Western,” and the municipalities pumped an additional $400,000 (roughly) into repairing and upgrading the track. Peoria was hoping to attract business to Pioneer Industrial Park, and the Heights was hoping that having rail service past the old Pabst plant would make that property more marketable. The Peoria & Pekin Union Railroad (P&PU) was hired to be the rail carrier for the line.

However, the city was looking for a way to recoup their investment quickly and instituted a special service district for Pioneer Park, special assessments of properties on the rail line, and per-car fees on rail shipments to help pay back the $1.25 million they paid to acquire and repair the line. That succeeded in just about killing all business along the branch line. Almost all the businesses stopped using rail service in 1985.

In 1986, the city realized the failure of that policy, dropped the per-car fees, and tried to lure shippers into using the line again with tax abatement incentives. That worked, and over the next several years more customers signed on, including Gateway Milling, O’Brien Steel and Cohen’s Furniture. In fact, by 1993 even Steve Van Winkle admitted that traffic was picking up along the line.

TRAIL TALK AND CITY INDECISION DOOM RAIL GROWTH

The city had only owned the line nine years when talk of turning it into a walking trail first hit the papers. A Journal Star article from 11/21/93 stated:

Peoria soon might be getting out of the railroad business, calling it quits on the eight-mile leg of the former Rock Island line.

[…] Rails-to-trails advocates are pushing to convert the rail line into a recreational trail, linking the Rock Island Trail to Peoria’s riverfront trail.

The Peoria Park District plans next year to extend the Rock Island Trail from its current end point, Alta, to Pioneer Park, and envisions the city rail line as the next logical extension.

Mind you, Gateway Milling was still bringing in 250-275 cars each year over the Kellar Branch when trail advocates started eyeing this corridor. Nevertheless, the city’s railroad commission (which incidentally was recently abolished per the Ad Hoc Committee on Commissions’ recommendation) voted in early 1994 to extend rail service for only three years; i.e., they wanted to take a “wait and see” approach. The Journal Star had this to say: “Though Van Winkle did not rule out a continuation of service past 1997, he did not offer much hope. ‘We’re really not sinking any money into it for a longer-term stay,’ he said.”

To add further uncertainty, when Peoria and Peoria Heights purchased the line in 1984, their agreement with P&PU was that they would operate the line for 20 years (until 2004), with an escape clause after 13 years (1997). Thus, it was uncertain whether P&PU would continue operating the line past 1997.

Not surprisingly, no growth happened over the next three years, and in May 1997 the City Council decided to abandon rail service and pursue turning the Kellar Branch into a bike trail.

That’s all background to the current struggle, which I’ll review in Part 2 of the Kellar Branch Saga Summary.