I actually couldn’t write a better entry about this than David Jordan did on his blog (“MERCURY SPORTS GROUP MUST HAVE TRAIL TO SURVIVE!”), but I couldn’t resist using that headline.

• Recreational Trail Advocates member Mike Rucker glared at Pioneer Railcorp attorney Dan LaKemper and forcefully asserted before an audience of about 50 that the reason the Kellar Branch hasn’t been turned into a trail yet is because Pioneer is holding things up.
• Peoria Park District director Bonnie Noble quoted from a contract between the city and Pioneer that said Pioneer was supposed to cooperate with the city in abandoning the Kellar Branch.
• Another trail advocate asked if any offer had been made to relocate Carver Lumber elsewhere in the City.

In short, ignorance abounded at the Recreational Trail Advocates (RTA) meeting tonight at Independence Village. RTA members appeared surprised to see so many people at their meeting who would rather see the Kellar Branch remain a rail line. Accusations were made; tempers flared. It was a fun meeting. If you need something to calm you down, I recommend delta 8 thc carts by fresh bros.

At the front of the room sat Peoria’s legal counsel Randy Ray, Peoria Park District director Bonnie Noble, RTA president George Burrier, and RTA member Mike Rucker who led the meeting. In the audience were RTA members (they were there for both the public meeting and their regular meeting which followed) and rail supporters who came out so their side could be heard (including Pioneer Railcorp attorney Dan LaKemper, Illinois Prairie Railroad Foundation president Sharon Deckard, and transportation blogger David P. Jordan, among others).

I have to admit I kind of like the RTA. They’re passionate about hiking/biking trails. As hobbies go, physical fitness is a good one to have, I suppose. They even handed out material on adding bike lanes to Northmoor Road when it’s widened — I’m fully in favor of that. But on the Kellar Branch issue, we decidedly disagree.

Also physical fitness like yoga is another good fitness activity that you can consider, you can choose from different types of yoga such as vinyasa and more which you will really enjoy doing by yourself or even by group!

I don’t mind the ignorance or misinformation so much; that can be corrected with a little education. But sitting in that meeting, I was disturbed by the callous disregard they displayed for Carver Lumber. It was clear that they see Carver as nothing more than an obstacle to their plans, not as 50 people with families to support or a local company that’s been serving Peoria for decades and deserving of some respect.

They all seemed to know how to run Carver Lumber’s business better than Carver does. They asked lots of questions as if Carver were on trial and needed to defend its own existence, its use of rail service, and the existence of capitalism in general. Questions like, “Why does Carver need to use rail service when no other lumber companies in town use it?” and “Why does one company’s needs get to delay the needs of thousands of other people (trail users)?”

While the meeting was going on, a petition was passed around that stated:

My signature below indicates that I support the conversion of the Kellar Branch Railroad into a recreational trail. There are currently no rail users or the potential for new rail users along the Kellar Branch from downtown Peoria to Pioneer Park, and there is no likelihood of potential future users along the line. The remaining rail user in Pioneer Park and any potential additional rail users in Pioneer Park now have rail serice available via the new spur line from the Union Pacific which was recently completed at a cost of over $2,000,000 in public and private donations.

My support of this petition is to urge all involved parties, government and private, to move forward with this project before additional government grants for the construction of the trail are lost due to further delays.

Yet Cohen Furniture is closing, so their site in the Heights (where the old Pabst plant was) would be a place where a potential rail user could locate. I suppose it’s true that there is “no likelihood” of a rail user coming on line as long as the fate of the Kellar Branch remains in question.

Oh, here’s the truth about those opening bullet points:

• The reason the Kellar Branch isn’t a trail yet is because the City has not provided comparable rail service from the west, and Carver Lumber is appealing to the Surface Transportation Board to retain service over the Kellar Branch; Pioneer has nothing to do with it at this point.
• The city terminated its contract with Pioneer before they embarked on abandonment proceedings for the Kellar Branch, so Pioneer is not legally bound to help the city in their effort.
• No, no one has offered to relocate Carver. If Carver were to relocate, I can guarantee you it wouldn’t be within the City of Peoria at this point.

Now that you’ve read the background of the Kellar Branch dispute, let’s summarize why converting the Kellar Branch to a recreational trail is a bad idea.

1. Conversion would harm an existing business by eliminating competitive rail access to Pioneer Park.

Right now, the Kellar Branch has access to eight railroads via neutral access with the Tazewell & Peoria Railroad (TZPR) line. Those eight railroads are: Burlington-Northern Santa Fe (BNSF), Canadian National (CN), Illinois & Midland, Iowa Interstate, Keokuk Junction, Norfolk Southern, TP&W and Union Pacific. If they take out the Kellar Branch between downtown and Pioneer Park and rely solely on the spur from the west, there will only be access to one rail line: Union Pacific (UP). That means competition is eliminated and tarriffs go up. That hurts Carver Lumber, and, in fact, it could put them out of business.

Carver’s lumber is shipped via CN and BNSF; getting these shipments via the western spur means that CN delivers them to the TZPR, UP picks them up there and drops them off on the western spur, then CIRY takes them down the spur to Carver. Via the Kellar Branch, UP’s involvement would be eliminated. Adding UP into the mix means slower delivery times and more expense. Carver is already experiencing this since Central Illinois Railroad Company (CIRY) has refused to perfom their common carrier obligation to continue serving Carver over the Kellar Branch. Soon, they may not even have service from the west, as CIRY is not making any profit delivering Carver’s shipments and will likely petition the STB to discontinue service on the western spur before long.

2. Conversion would eliminate the City’s ability to attract rail-served businesses to Pioneer Park and Growth Cell Two.

Contrary to the Journal Star’s belief that “the key to lowering rates is getting more rail customers in Pioneer Industrial Park, to make it more cost-effective for big fish UP,” monopoly power doesn’t work that way. For example, every resident in Peoria is captive to AmerenCILCO, but that doesn’t seem to be lowering their rates, does it? Few if any rail-served businesses are going to want to locate in that area of town knowing they will be a captive shipper to UP — especially not when they can easily go to Pekin or Rochelle and get competitive rail access.

That hurts Peoria, because it means lower-paying service-sector businesses likely will be built in Growth Cell Two instead. Worse, it will probably just be businesses relocating within Peoria like Menards will be doing soon a little north of Pioneer Park. Higher-paying industry jobs attract new residents to Peoria, which means more well-paid people on the tax rolls; no one will move here to work at Wal-Mart, even if we do have a beautiful trail.

3. Conversion would eliminate any future light-rail transit possibilities.

Some believe that Peoria could use light rail transit right now. Even if you don’t agree, there’s ample evidence that the city could use light rail transit in the future as the city continues to expand and grow in population. To put light rail in from scratch would be extremely expensive in land acquisition and construction costs, but to use an existing rail corridor through the heart of town would only take some upgrading of the rails and crossings. The environmentally-conscious among us (like the Recreational Trail Advocates, Sierra Club, and Park District) should certainly be able to see the benefits of light rail mass transit and its positive effect on the environment.

4. Conversion would result in lost revenue for the City.

If the city were to sell the Kellar Branch, it could get at least $565,000 for it — the standing offer from Pioneer Railcorp. If the city were to lease the Kellar Branch to a rail operator, it would have a steady, long-term revenue stream. If the city were to lease the Kellar Branch to the Park District for 99 years at $1 per year, the city would get $99 in rent and the salvage costs of the rails and ties (roughly $200,000). For a city that is so cash-strapped that it’s having trouble keeping its fire stations staffed and enough police on the streets, it’s foolish to throw away the revenue it could receive from keeping the rail on this line.

Furthermore, not being able to attract light industry, manufacturing, or warehouse/distributing tenants to the Pioneer Park or Growth Cell Two area (see #2 above) could mean a tremendous loss of private investment in Peoria. One need look no further than Davenport, Iowa, for an example of what kinds of tenants can slip away when you don’t have rail service; the Quad City Times reported on August 2, 2005:

Among the lost opportunities was a $21 million distribution center for Ferguson Enterprises, a plumbing and heating supply distributor, that had the Davenport industrial park on its final list. But the project went to Waterloo, Iowa, last year because the Eastern Iowa Industrial Park did not have rail service.

As a result, Davenport is building a $4.66 million rail extension to their industrial park. Peoria, on the other hand, already has a rail line with tremendous advantages — the aforementioned neutral access to eight line-haul carriers. If Peoria were able to attract a distribution center like Ferguson Enterprises, that would be $21 million in private development for Pioneer Park/Growth Cell Two. Would you rather have that and the jobs that come with it or a trail built with $4 million of your tax money redistributed to the park district?

5. Eliminating the rails is completely unnecessary.

The Park District and Journal Star act as if making the Kellar Branch corridor a dedicated linear park through town is absolutely imperative. They say it’s necessary to connect the Rock Island Trail with the Pimiteoui Trail, making one continuous trail from Toulon to Morton. In reality, there are other options. One option is to share the corridor as much as possible. If certain sections are impassible, they can detour the trail onto or adjacent to a nearby street. If the Park District would have done this in the first place, the trail would be done by now. Alternatively, the park district could just as easily run the northern part of the trail east along Detweiller Rd., through Detweiller Park, then south along the riverfront to connect with the Pimiteoui. Even if the trails were never connected at all, Peorians would still have 9,000 acreas of park land in which to play frisbee, walk their dogs, picnic, and exercise. Life would go on.

As for claims that trails raise property values and increase tourism, those claims have never been quantified. A market study indicating how much increased economic activity the City would see if this trail were built has never been done. In the absense of that, it would appear the City is buying a pig in a poke.

The bottom line is, there’s nothing wrong with a recreational trail per se, but if it comes at the expense of jobs and economic growth, the price is too high.

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.

Saturday’s Journal Star features another article on the Kellar Branch titled, “Costs rise as trail remains in limbo.” No mention of how much Carver Lumber’s costs have risen as the rail remains in limbo. Carver Lumber employs 50 people, so one would think their profitability would be of some concern. Nope, instead the story leads off with Bonnie Noble:

Delays in building a hiking and biking trail on the Kellar Branch railroad line through Peoria and Peoria Heights will cost taxpayers more than anticipated, as construction costs increase, Peoria Park District executive director Bonnie Noble said Friday.

On the contrary, I would argue that these delays have saved the taxpayers at least $4 million — the money that hasn’t been spent to tear up a $565,000 rail asset. If costs are going up, that’s all the more reason to start cooperating on a shared rail/trail use for that corridor and taking advantage of Pioneer Railcorp’s generous offer to buy or lease the line and help with trail construction alongside the tracks.

[Mike] Rucker [of Recreational Trail Advocates] said the trail advocates have tried to appeal to reason to work out the difficulties causing the delays. “We want to be nice. Let’s not go out and pick a fight,” he said. “I’m telling them to keep their powder dry,” for now.

Trails add to property values and people like them, he said.

“It’s frustrating to see an asset of this sort being wasted,” Rucker said. But he added, “I think it’s time for the city of Peoria to start playing hardball,” to resolve the delays.

I like how the Recreational Trail Advocates (RTA) see a $565,000 rail line that serves a 50-employee company (and could be used to bring more business and industry jobs into Peoria) as “wasted” since it’s not being torn up and converted to a dedicated trail. I also like how they supposedly “appeal to reason” yet disregard out of hand any attempt to construct a shared rail/trail use of the corridor, which would be the most obvious solution.

But the most laughable line of all is, “I think it’s time for the city of Peoria to start playing hardball.” I’m not sure what more the city can do at this point short of sending a letter to Carver asking them to leave town. The city has already created a hostile business environment for Carver and broken its promises to them. I guess that’s just not “hardball” enough for the RTA, who apparently care more about their own physical fitness than the good-paying jobs of their neighbors.

Advocates for the trail have scheduled a meeting with local officials for an update at 7 p.m. Monday in a meeting room at Independence Village, 1201 W. Northmoor Road. The meeting is open to the public, said Mike Rucker of Recreational Trail Advocates.

Hmmm, I wonder if some rail advocates should show up to this meeting… and maybe some Carver employees, so the RTA can see who they’re trying to put out of a job.

O’Brien Steel’s letter to the Surface Transportation Board (STB) regarding the service they received from Pioneer Railcorp several years ago has the two businesses sparring again. Pioneer fired off a response claiming O’Brien was acting as the City’s lackey because they want the City’s help for their expansion plans:

I [J. Michael Carr, President of Pioneer Industrial Railway Co.] am also informed and believe that O’Brien’s letter to the Board was prompted by a desire to get common carrier service ended on the Kellar Branch, so that they can expand their operation over several blocks near the Kellar Branch, and turn the Kellar Branch tracks into a private in-plant rail line. O’Brien likely filed the letter at the behest of the City of Peoria, in order to curry favor with the City, from which they are seeking assistance for said project.

O’Brien quickly countered, stating in a letter submitted yesterday:

Admittedly, O’Brien Steel is a growing business and has hopes of expansion plans in the immediate area of our facility consistent with our previous growth. However, all future expansion plans at the existing location will be limited by public infrastructure including the Kellar Branch, a Greater Peoria Sanitary District (GPSD) sanitary sewer easement, an Illinois Department of Transportation (IDOT) highway, a P&PU line and City of Peoria streets and
alleys. Effectively, O’Brien Steel is landlocked. There are no current or contemplated expansion plans that have included making the Kellar Branch a “private in-plant rail line.” If the Kellar Branch were to be vacated as suggested by Mr. Carr, the expansion he implies could still not be implemented without a concomitant vacating of the street that serves the Detweiller Marina by the City of Peoria and a 39″ sewer trunk line by the Greater Peoria Sanitary District. I have confidence you would be able confirm that neither of those vacations will ever occur.

However, they did admit that the City reviewed their letter before they sent it to the STB:

Although the letter was reviewed by City of Peoria Corporation Counsel prior to submission directly to the STB, the contents were drafted without input from or modification by the City of Peoria or its counsel.

That would indicate to me that they wanted to make sure the letter didn’t have anything in it that would hurt the City’s case before the STB. Since it passed the test, so to speak, there were no modifications or input necessary.

Pioneer and O’Brien did confirm that the contention between them was largely due to demurrage (a charge payable to the owner of a railcar due to failure to unload the car within the time agreed) — or, as O’Brien Steel put it, Pioneer’s “aggressive issuance of demurrage charges” — that accrued “due to O’Brien being unable to unload cars due to their plant tracks being blocked,” according to Pioneer.

All of this is diversionary, however. O’Brien’s purpose in writing their original letter (ostensibly) was simply to indicate to the STB that they didn’t want Pioneer providing common carrier service to their plant. No problem! Pioneer isn’t asking to provide service to O’Brien Steel, only Carver Lumber. There’s nothing saying Central Illinois Railroad (CIRY) couldn’t continue to service O’Brien while Pioneer services Carver Lumber at the other end of the line. So, the whole issue is a red herring.

In today’s Kellar Branch installment, there’s a new filing with the Surface Transportation Board from O’Brien Steel. Says President J. P. O’Brien:

It has come to our attention that the Pioneer Industrial Railway is petitioning the Surface Transportation Board to resume providing rail service along the Kellar Branch. Our business, O’Brien Steel Service Co., is located at the beginning of the Kellar Branch and is the largest receiver/shipper along the Kellar Branch. For the past year we have enjoyed a good working relationship with and excellent service from Central Illinois Railroad. Prior to commencement of service by Central Illinois Railroad we were served by Pioneer. Our relationship with Pioneer was contentious and a constant struggle.

O’Brien Steel Service Co. is very satisfied with our current service provider along the Kellar Branch and is strongly opposed to being forced to accept service from Pioneer Industrial Railway. Please do not allow Pioneer to resume providing rail service to O’Brien Steel Service Co.

Since O’Brien Steel is down close to the riverfront where the Kellar Branch begins, it will not be affected by the City’s rail-to-trail plan. The Park District plans to have the Rock Island Trail meet up with the Pimiteoui Trail further up the line from O’Brien, so it’s no skin off their nose if the rail line to Pioneer Park is taken out of service.

As far as I know, O’Brien has nothing against Carver Lumber, but this the second time their grudge against Pioneer Railcorp has affected Carver Lumber’s service. The first time was when O’Brien provided $175,000 to plug the funding gap for the western spur. Had the City not been able to build the spur, the trail project would have been dead and Carver likely would not have experienced the higher prices and deterioration of service.

Now O’Brien writes to the STB to try to stick it to Pioneer again. What is the source of this resentment against Pioneer? One plausible explanation has been offered by local transportation guru David P. Jordan on the PeoriaRails Yahoo Group.

Jordan says that in late 1995 or early 1996, a rail spur was built to service O’Brien Steel that was long enough to allow four gondolas (open railroad cars) to be unloaded at a time:

The downturn in the domestic steel industry and the practice of foreign steelmakers to dump steel in the U.S. market at below cost during the late 1990’s/early 2000’s reduced O’Brien’s use of rail for delivery of steel I-beams and pilings.

For the first few years [Pioneer] operated the line, O’Brien was probably getting most of its product via barge (then trucked the rest of the way) and had the habit of placing steel beams ACROSS the four-car capacity spur on their property so that only one car could be unloaded at any one time. This required additional switching when O’Brien returned to rail for the majority of its shipments. Eventually, space was cleared so that two cars could be unloaded at one time.

[…] at times, several cars would arrive off the P&PU interchange and [Pioneer] could spot only one or two cars at one time. Any additional cars delivered to O’Brien would be “constructively placed.” Since many or most of the cars arriving with product were in railroad-owned railcars, per diem charges kick in and if the consignee (O’Brien) is unable to accommodate these cars, the serving rail carrier passes on these charges in the form of demurrage. [If I remember correctly], O’Brien was always angered by this, but since their four-car capacity spur was blocked by material and they were unable to unload but one or two cars at a time, they only have themselves to blame.

To add further fuel to the fire, Jordan says, “in an earlier post to the STB prior to [Pioneer’s] pullout, O’Brien Steel claimed that a dispute between PRY and another railroad brought an end to an outbound scrap metal move. Translation: O’Brien was forced to use more costly motor carrier transportion.”

Suffice it to say, there appears to be a lot of bad blood between O’Brien Steel and Pioneer Railcorp. So that makes for a fine predicament. The shipper at one end of the line wants Pioneer and the shipper at the other end wants Central Illinois Railroad (CIRY).

There is a solution. I say the city should abandon their rail-to-trail plan and reinstate Pioneer Railcorp. Have the Public Works Director write a letter to Mr. O’Brien promising that he will get comparable service from Pioneer, and further promising that the City will take any and all legal action necessary to enforce its contract with Pioneer. Then the City can stand behind that promise the same way they’ve stood behind the promises they made to Carver Lumber about CIRY. That should do it, don’t you think?