The Village of Peoria Heights recently sent a threatening letter to Pioneer Industrial Railway Co. (PIRY) demanding that they fulfill all their obligations under their 1984 contract. PIRY has sent its official response to Village officials. They are happy to comply with the contract — in fact, they’ve sent along their lease payment and reports of railcar movements, and they’ve agreed to fix up problems identified along the roadbed as the contract dictates.
However, since the Village is acknowledging that the contract is still in force, PIRY is also demanding that they be the sole rail operator of the Kellar Branch as stipulated in the contract. They have asked the Village to remove Central Illinois Railroad Company (CIRY) from operating on the line, and they want the Village to compensate PIRY for lost revenue because of CIRY operating on the line.
PIRY is also threatening to remove its “offers of compromise,” which is apparently a reference to its offer to assist with the building of a trail next to the rail line within the railroad right-of-way. They say that the Heights is acting in bad faith, and mention that they offered to meet with the Village back in December to discuss their concerns, but were rebuffed. It certainly appears that the Village has no interest in cooperating with PIRY, opting instead for an adversarial stance. That’s unfortunate. It means that the Village will end up spending a lot of money and getting nothing in return, just like the City has been doing for over a decade. I guess the old saying is true: we learn from history that we never learn anything from history.
Here’s the text of the letter:
Dear Mr. [M. Michael] Waters [of Vonachen, Lawless, Trager & Slevin]:
Thank you for your letter to Mr. Carr, dated March 31, 2008. Pioneer Industrial Railway Co. (“PIRY”) is encouraged by the fact that the Village has finally acknowledged that the 1984 Agreement is still in force. We are, however, disappointed by the fact that nobody from the Village contacted us about any of these concerns prior to your sending the letter. Had anyone done so, you might have avoided the numerous inaccuracies and false assumptions said letter makes. Not to mention the perception that the Village is continuing to act in bad faith, despite Pioneer’s many efforts to proceed in a spirit of cooperation. If the Village is only interested in confrontation, as it appears from this letter, then Pioneer will withdraw its offers of compromise.
As for the specifics of your letter, let me start by pointing out, once again, that Pioneer Railcorp has no interest in the Kellar Branch, and never has. Your continued insistence on referring to Pioneer Industrial Railway Co. by the name of another corporation is vexatious at best.
Your allegation that Pioneer failed to pay the agreed rental is incorrect. Section 6 requires payment to the City (of Peoria), which PIRY did. Attached is a receipt for payment of 6 years rental in 1998 (covering 1998-2004); a check for $20.00, for the next twenty years from 2004; and letter from the City Attorney refusing said check and directing that no more checks be sent. The 1998 receipt references both Peoria and Peoria Heights. If the City did not give the Village its share, I suggest you take it up with the City. At no time was PIRY advised that the rental was divided and we should make separate payments.
I am, pursuant to your demand, enclosing a check for $20.00, make payable to the Village. I trust you will forward the City’s portion to them.
Your next point is the monthly reports. Once again, you are incorrect. Reports were supplied to the City (of Peoria), per the Agreement, including the Railroad Commission, on which the Village had a representative. Enclosed is a report covering the months since operations resumed, pursuant to the Surface Transportation Board’s order. If, after a diligent search, you cannot locate your copies from 1998-2006, we will endeavor to obtain copies from our records.
Your statement that the railroad (PIRY) is “contractually bound to maintain drainage and correct drainage issues and problems along the tracks within the corporate limits of the Village of Peoria Heights” is also patently inaccurate. Section 4(e) of the Agreement provides that the City (now, presumably, the Village, as successor to the City within its corporate limits”) is responsible “for performance of weed and brush control not on the roadbed which does not affect rail operations or safety.” PIRY is responsible only for the maintenance of tracks, crossing protection and roadbed”. Roadbed is defined in Section 1(b) as “all that property and appurtenances located within ten (10) feet of the center line of the track”. To the very limited extent that your report deals with roadbed drainage issues, our maintenance forces will correct the very minor washouts you point out. The weeds, brush and other issues in the ditches and beyond the roadbed are entirely the responsibility of the Village.
PIRY also categorically rejects the suggestion that it has to comply with the dictates of any third party engineering firm hired by the Village. There is nothing in the Agreement that provides for that. In addition your “report” provides photographic evidence that three individuals trespassed upon the railroad tracks, without notice to PIRY.
Your references as to anything pertaining to the P&PU are also totally without basis. I enclose a copy of the Consent to Assignment signed by the Village that specifically states “Village does hereby release P&PU from its obligation to continue rail service under the Agreement dated July 10, 1984, and agrees that P&PU has performed all of its duties and obligations under said Agreement to the Village’s satisfaction. The Village expressly releases P&PU, its agents, employees, and assigns from any and all claims or demands arising out of occurrences on or after the effective date of this Assignment.”
Your threat that Pioneer may be “removed from using the Kellar Branch Rail Line for any reason” if your alleged defaults are not corrected to the satisfaction of Randolph & Associates, is, as you well know, a threat to interfere with interstate commerce in direct violation of the Interstate Commerce Act, and in open defiance of the Order of the Surface Transportation Board. There is case law that provides recovery of attorney fees should PIRY be required to file an action in Federal Court to enforce the Board’s Order.
Finally, as you know, the Agreement provides, at Section 4(c), that PIRY shall have “sole control” over the operation of the Kellar Branch, and gives PIRY the right to serve all industries on the track (Section 3(b)). As you also know, the Village has been a party to the admission of Central Illinois Railroad Company (“CIRY”), which currently operates on the Kellar Branch, without a contract. Please advise immediately what steps the Village intends to take to remove CIRY from the Kellar Branch, and what the Village intends to do to compensate PIRY for the loss of business it has suffered due to CIRY’s operations.
In my letter of December 4, 2007, to Mr. Trager of your firm, we offered to meet with the Village and discuss its concerns, as an alternative to litigating this matter. That offer was ignored.
Too many taxpayer dollars have already been wasted in this misguided effort to force an unneeded trail upon our railroad line. I ask that the Village cease and desist from this transparent attempt to disparage PIRY, and renew its commitment to resolving this matter in good faith, in the interest of all parties, and in accordance with the law.
Sincerely yours,
Daniel A. LaKemper,
General Counsel
Pay no heed here; games are being played by both sides which will end up hurting all. The Heights is trying to force the Rail out and the Rail is trying to do the same to the Heights.
Why does Mayor Allen not support good paying jobs? Sure the jobs would most likely be in Peoria but some of those incomes would be spent in the heights and the employees might live in the heights.
suppose he is drinking AK koolaid
Will someone please call me when the “good paying jobs” arrive? Phone numbers might be up to 9 or 11 digits by then, so be sure to check back.
Wacko — au contraire, the rail carrier has consistently offered to cooperate with efforts to build a trail alongside the rail line on the railroad right of way. It’s only the trail advocates that want all or nothing. Why is it PIRY’s attempts to compromise are unacknowledged or treated with contempt? Why do trail advocates insist on this being a win-lose proposition?
Prego Man — the good paying jobs may never materialize as long as the City and Heights keep pulling these kinds of shenanigans.
Well Prego, pushing for minimum wage jobs in a strip sure isn’t a very sound plan for long term economic growth.
*strip mall
C.J., I’m thinking the “good paying jobs” might not ever appear cause no one really gives a damn about having rail service any longer in Peoria. Ya think? They’ve had a half year to line up all of the “new” panting-to-get-on-the-rail customers, and VOILA! none yet. Even Carr says the pickings are not even slim, they’re virtually not there.
So, I guess it’s on to 2027, huh? Hopefully a railroad tie or two might still be intact then.
And, Mahnko, at this time, I’d say it was a success if the rail line brought even a “minimum wage” JOB. Just one. Still searching… still searching…
Oddly, Bloomington has rail service that has only seen increased usage. People here aren’t going to line up to use a service that isn’t available here. The people who use rail transportation will have to continue traveling elsewhere to use rail service while the Heights and Pioneer argue this into the ground.
Prego Man,
I’m getting to think you enjoy being a devil’s advocate/clown, and really do understand and agree with the pro-rail arguments. But I’ll educate you anyway…
It takes sometimes 1-2 years for many rail related economic development projects to materialize. Since for years the Cities have been trying to destroy the Kellar Branch and replace it with a sole connection to Union Pacific, I’m sure several opportunities have been lost – namely Amerhart, which relocated to Pekin instead, not wanting to deal with the idiocy started by RTA and the Peoria Park District and then only magnified by the JSEB and Peoria City Council.
The truth of the matter is there are existing businesses that will use rail service if there are guarantees it will be available for at least 10 years out (why make the investment when it will be worthless in a few years?); some existing businesses will save money on transportation costs leading to increased sales and employment. In Globe Energy’s case, a couple of properties are being re-developed and 600 jobs will be created over the next several years.
There are 2-3 warehouses available for lease/sale at Pioneer Park which are rail-served. These can be used by new business as-is or re-developed for manufacturing, as Globe Energy has done with the Gateway Milling building. And if the City ever gets its act together on infrastructure, Growth Cell 2 has prime greenfield for development. I envision logistics and light manufacturing firms could be attracted to this area, creating hundreds if not thousands of jobs. Pekin’s Riverway Business Park has been successful at this, why not Peoria’s Growth Cell 2?
Maybe Mayor Allen needs to get a developer that doesn’t see a railroad track as a stumbling block to development. Only then will anything happen.
We’re talking about rail freight and not passenger service but Bloomington-Normal is a perfect example of why Growth Cell 2 won’t work if the shortline operator’s sole connection is with Union Pacific. B-N is served by two freight railroads – Norfolk Southern and Union Pacific. The only brand new, rail-served industry to come to town since Mitsubishi (1988) is a grain elevator jointly served by both railroads. A lumber warehouse has been converted to wastepaper recycling and is now under its second owner. The building is served by NS.
Despite the prominence of interstates, B-N simply does not attract new rail users like the Peoria-Pekin area, which during this same 20-year period has attracted a number of them – Hanna Steel, Reed Minerals, AniPro Feeds, Peoria River Terminal, Seneca Petroleum, Carri Scharf, PMP Fermentation, McFarland Cascade, Midwest Building Supply, expansion of ADM barge facilities and a second Aventine ethanol plant. B-N is sered solely by Class 1 RR’s while Peoria has the benefit of shortlines, a terminal railroad and a navigable river.
It’s time local pols realized the mutual benefit of multiple railroads and the river to our town’s economic development.
David, I’m beginning to think that you fully understand that there is no rail future along the Kellar Branch, but like to play “Pioneer’s Advocate” for some deep-seeded (seated?) desire to fire up a Lionel train set 24/7.
Your “arguments” are really growing tiresome. You talk a mean game, but the facts will never back you up. It is a dying rail line. I don’t care what they do with it- just don’t say that it’s an economic boon waiting to happen. The sooner we Peorians accept the facts of what the present and future really entail, the sooner we can leave the mid-70s. And, David, it’s really time to leave.
Prego man,
If the Kellar Branch were a dying rail line, two railroads wouldn’t be fighting over it, and Carri Scharf and Globe Energy wouldn’t be planning major rail-served facilities to join the existing users – O’Brien Steel and Carver Lumber.
I am thinking Prego just doesn’t want good jobs to come to Peoria. Minimum wage jobs that are just shuffled around town are not a positive boon to the wealth of the city. They suck money from the overall economy in the form of benefits accrued to the working poor, lack of health care, increased deterioration of neighborhoods forcing increased costs for police and fire departments. Yeah real win win. More minimum wage jobs = higher taxes.
DPI….I would hardly characterize the situation as two carriers fighting over it. You continue to blindly support anything that is pro-rail and anti-trail. Your view of the economic benefit of the Kellar line must be from those “rose colored” glasses you have on. It’s easy to say it’ll take years to develop the business and require a ten-year guarantee of service – it provides great cover for the lack of business. Peoria and the Hdights never experienced a rail boom during the 80s and early 90s before any discussion of the trail started. It’s a line that will never be more than a grain of sand in a desert and that’s ok as long as we realize that isxwhat we get with a continued Kellar line.
Best solution is sell it off (getting local government out of the situation).
Let the free market forces dictate it’s use. My guess is there is no financially feasible way for a rail company to run the line if they have to incur the purchase and maintenance costs. But more power to them if they can.
Peo Proud Wrote: I would hardly characterize the situation as two carriers fighting over it.
CIRY and PIRY fought before the STB for sole operating rights. Now both have these rights and will compete for business.
You continue to blindly support anything that is pro-rail and anti-trail.
I support the railroads as a tool for economic development. Trail proponents could never make a serious case that a bicycle trail would serve as an economic engine. When the trail proponents realized their dreams were endangered, developers came out as those behind the City’s stubborn fight to destroy a railroad. But these developers, though they claim a bike trail is vital to their redevelopment plans, still propose condos and strip malls with parking lots for cars.
Your view of the economic benefit of the Kellar line must be from those “rose colored” glasses you have on.
I’ve been consistent in my assertions and predictions since the late 1990’s (and before I started submitting letters to the PJS) that the Kellar Branch could be made profitable by Pioneer and new business and past users could be attracted to the line. I was proven correct in 1998 and am again.
It’s easy to say it’ll take years to develop the business and require a ten-year guarantee of service – it provides great cover for the lack of business.
I didn’t say “years”, I said 1-2 years because that is the timeline for Globe Energy’s 165,000 sq. ft. Pioneer Parkway plant and for Carri Scharf’s plans to use the old ready mix facility on Van Buren St.
Peoria and the Heights never experienced a rail boom during the 80s and early 90s before any discussion of the trail started.
The user surcharges deterred new business at a critical time (1984-86); the elimination of these charges resulted in three new users between 1986 and 1989 – Gateway Milling, O’Brien Steel and Cohen’s Furniture. A national recession in 1990-1992 deterred new development. From 1993, the Park District and trail groups made their plans known. In 1994, the City Council clouded the line’s future after 1997.
Best solution is sell it off (getting local government out of the situation).
Yes. I agree.
Peo Proud, that is exactly what Pioneer has tried to get the owners of the line to do. They have offered to buy it completely and take over the maintenance and upkeep. Evidently Pioneer sees a future on the line or they wouldn’t offer to buy it. This is a successful company that runs at least 14 other shortlines and knows what it is talking about.
Sixteen posts and counting… Wait, I’ve said that before. De je vu all over again. Can I ask a question? Why is nobody talking about the feasibility of both rail and trail. From the last set of postings on this issue, I learned (and I do mean learned) that this is at least a possibility. Yet, here is the same old thing – my way or the railway (sorry, couldn’t resist). Why can’t we have both? Nobody seems to be discussing this. Once again, am I missing something?
To the RAIL pushers – just drop it and accept the Rail/Trail side by side configuration.
Glad to know that “being positive about Peoria” only had to last one day. Whew..
deebie47, “Rail/Trail side by side” is what we all want. You might want to send that message along to the TRAIL pushers. Good luck with that one!
We rail supporters will accept a side-by-side option, however, should this scenario be deemed too costly, then you all know where I stand.
God, such an important issue which so very few have interest in and which will benefit so very, very, very few.
I disagree with Forty. I think that the ultimate solution, particularly if it is both rail and trail will benefit many, many people. After reading the pro-rail posts on this site, I see the value of expanding the use of this line for rail operations. With transportation costs an important factor in light manufacturing, it stands to reason that rail could be a cost effective means. On the other hand, a multi-use walking/biking trail would (at least theoretically) enhance the quality of life and business climate in the area. So I propose a third group in this debate: the pro rail/trail group. Wait a minute, not so fast. That should be the pro trail/rail group! As soon as we can agree on what to call ourselves, we’ll get back to you.
Rail and trail.There is more trail that will not work beside the rail than there is rail.More than half of the trail will have to be ran thru other areas.You can not run a trail over drainage ditches.Should homeowners along the rail be forced to move their property lines back and tear down the fences so people can walk thru their backyards?And why should a trail be allowed on an easement of a Railroad if it is against the law to treaspass on it?Screw the trail n rail idea,a train only brings stuff a trail brings litter,noise,crime and unwanted people in my backyard when I cook out.
I think that because of costs and the constant bickering between rail and trail folks a new solution is needed. If you really, really want a trail then forget the so-called Kellar Branch. Instead head the trail from where it ends at Pioneer Parkway (or at some point near there) run it directly over to Knoxville to Detweiller Park and towards High Point and to the upper reaches of Forest Park to Prospect and on to Grandview Park. Go down through the park (new switchbacks will be needed to lessen the grade) and work the path along where the plans are for the Water Street extension. The Water Street extension by what was in the PJS will come from where it ends now downtown to the McClugage Bridge – Lower Gradview Park entrance location. This would be a much more scenic, educational and safer route for our children to traverse. Who really wants our kids going down through the Averyville neighborhood or having to cross so many busy streets? I really believe that this route would be the best for the majority and would attract visitors to see the majestic beauty of our Illinois River valley.
And what is wrong with the Averyville neighborhood?There is fire works every weekend,and plenty of space for the kids to play if there was a playground.You can go to the building where the library once occupied.We have a recycling bussiness with hazardous chemicals in a building zoned residential.They store everything outside so you can rummage and go.Only half the houses on any given street is occupied.Excuse me but if the city spent some of the money they want to spend on a trail, to help some of the original neighborhoods, no one would say,who really wants their kids in the Averyville neighborhood or the bluff.But I do like your idea of the new route for a trail.
And by the way, the trail if approved will not go thru the Averyville neighborhood. It will be the existing trail from the PJS thru Springdale cemetary to the lower Glen Oak Park to Abington, East to the marina park and connect to the river front trail.You can get a map and proposed costs from the PPD,just ask for the Trail next to rail alignment.Page 7 is the map and page 16 is the detailed cost breakdown.$29,096,101.03 is the total from the 7/28/2006 trail side by side w/rail line worksheet.Also with this alignment it invalidates all current grant monies.I don’t know what the new firm,if ever hired,will find differant from this study or the ones done since the late 80’s.The PPD has had 14 reports on this alignment by a very knowledgable individual with full credentials.That is alot of money to spend so a few, very few can go for a walk or bike ride.Who is going to pay for this ridiculos project?Walking or riding a bike beside a moving train,why not put the trail down the middle of the highway? What are you people thinking?GET YOUR PRIORITIES STRAIGHT.
There are 38 states across the country that currently have trails running along side of working rails and there are no problems with them. They have trains running from 10 mph to 179 mph successfully. As far as the grant monies that the PPD has currently they may be able to make them valid for this project. That is being looked into. There is even a trail in Astoria, OR., that has the trail running right down the middle of the track with a train every half an hour and not one incident. There are turnouts for the hikers and bikers to get off the track when a train is coming. It is working very well.
A trail down the middle of the rail? What brilliant goof came up with that one? Boy, does that ever sound safe. No incidents yet? Well, hell, it MUST be safe, right? All it takes is one incident, SD. How about a six year old that doesn’t hear the train around the bend? Geez… I can’t believe how ridiculous the “rail ramjets” can get.
Besides, putting a trail down the middle of a rail where there’s a TON of business to come… that’s a recipe for an incident sooner or later, don’t ya think?
What is up with all the Morton people thinking they know what is best for Peoria and it’s railroads?
Who is from Morton?Come on SD no problems,that is hard to believe.Even so I would not use it and certainly would not allow my grandchildren to use it.One mistake by a child and then we have a tragedy,whose fault would that be.No trail is worth that.And no-one can give a guarantee,accidents happen.I was born in Peoria and still live in the family home adjacent to the railroad tracks.I put that in, in case you thought I was from Morton.About the grant money I was just quoting the PPD’s own page on cost page 16,7.6 cost:.
I was not recommending putting the trail down the middle of the tracks, just commenting on the fact that another community has done this and it has worked for them. As for a six year old not hearing the train coming around the bend, what the heck is he doing out there by himself in the first place? Also as far as the PPD’s estimate on the rail/trail side by side the amount they quote is probably pretty close to being right. But the idea of hiring one of the two consultants offered up is that each of them has the ability to find more money to assist in the building of this rail/trail project. The current grant monies can possibly be used as per T Y Lin Company. The rest they would help to raise before any construction was begun. And as for Morton telling us how to do something I have no clue where that came from and since I don’t live in Morton its beyond me. One of the gentlemen from T Y Lin is on the ASSHTO Committee and thinks that the grant money can be used despite the complications of the design of the trail. This is good news for the trail side. Add this and the monies that the consultant can help raise and the offer from PIRY for assistance and you might get it built before we are all dead and gone.
In the letter PIRY sent to the Heights Mayor, PIRY withdrew it’s offer of compromise and said they have no interest in the Kellar Branch and never has.I don’t think you will be getting anything from PIRY in the form of assistance.This is all up to the STB and they said no.Why do the trail proponents keep this up?All they are doing is putting doubt in any Company wanting to do bussiness with the Rail.Costing money and probably jobs.Find a new dead horse to kick,this one stinks. $29,000,000.00 for a bike ride,just say it to yourself and maybe you will hear how ridiculous it really sounds.
PIRY only threatened to remove their offer of compromise; they haven’t removed the offer yet. Also, I think you may have misunderstood what they were saying about not having an interest in the line. They were making a distinction between the parent corporation (Pioneer Railcorp) and Pioneer Industrial Railway. The Heights’ letter kept erroneously referencing Pioneer Railcorp as having interest in the line; in fact, it was Pioneer Industrial Railway. A seemingly minor point, except that they’re separate entities legally, and this was a letter threatening legal action.