Chicago petitions for abandonment

[skytop35]

The city of Chicago has filed for abandonment of two segments of trackage. See the below link:

http://www.stb.dot.gov/filings/all.nsf/6084f194b67ca1c4852567d9005751dc/be187ef0d9edf3d7852575d1006b6308/$FILE/225227.PDF


Bill Denton
The Kingsbury Branch

[raisin]

Ouch.  This could get ugly, I\'m afraid.

[chuck]

Well that is not good news.
And we all know that Daley, I mean the city, gets what they want!!

Is there any way for the CT to actually defend what the city is saying?

-=Chuck=-
Mail: chuckjanda(at)hotmail.com
Home: http://www.chucksphotospot.com

[Frank C.]

Oh Dear. Wait a Polar Express Train? That would be cool!

[TBurke]

I wonder if the parked gondolas by Belden caused enough neighbors to complain, moving the city to take action sooner than later?

Adverse abandonment cases bought before the STB are rarely approved as the STB is wary of creating a precedent.  

Chicago Terminal\'s best move here would be to identify potential rail customers quickly which might be easier done on the Kingsbury stretch than on the Lakewood line.

The Carbit paint/stain factory still has the semi-buried sidings and spurs going into it on Kingsbury so perhaps Chicago Terminal could lobby them harder to resume rail service.

On the other hand, perhaps Chicago Terminal will seek compensation from the City of Chicago for giving up rights to these tracks.  If there is no hope of future revenue from these segments in question then Chicago Terminal can focus on a tigher core from Clybourn down to Goose Island with less maintenance needed.

[Ian]

I\'m still amazed in this \"recession\" that CTM has not gone under (yet...)  If there would be a time for the last of the Milw Rd street running to cease it would be in 2009...sad to say....

[raisin]

I haven\'t seen any cars at Big Bay for a while, but I don\'t get there every day, so it\'s possible I\'ve missed some and traffic on this site would indicate they are still receiving shipments.  Still, it would seem clear the recession has affected Big Bay\'s business.  Every time I drive by, I\'m afraid I\'m going to see it all closed up.

[TBurke]

I too wonder how much longer Big Bay can hold out, especially with that Home Depot just a mile away and this brutal recession.  A recent Crains Chicago Business article mentioned General Iron Industries in the context of the scrap metal business being down also.

Chicago Terminal\'s operating costs are probably fairly low and variable I am guessing, with the bulk going to maintenance on that SW, fuel, and wages on an as-needed basis, plus rent to UP for use of the North Avenue Yard. The crew can work the Elk Grove industrial park on off-days.

I am guessing that they probably receive a flat switching fee from UP for handling cars on the \"last mile\" of around $200-$400 per car or so.  And they now have income from AOK for storing all of those gondolas.

At least ROW maintenance is nil for Chicago Terminal as most of its rails are set in concrete streets maintained by the city as is the Cherry Street bridge.  

I suppose in a worst-case scenario if Big Bay went out of business and Finkl Steel eventually relocates to the South Side, and Chicago Terminal pulled out as a result, UP could always work General Iron Industries and Sipi Metals.  The remaining track to General Iron would be a long spur essentially, though one that uses a drawbridge.  General Iron Industries also has water transportation as an option since today it ships out shredded metal on barges.  I doubt UP would want to give up a reliable customer for hundreds of gondolas per year.

Like other industries, General Iron Industries may also decide to take over the switching themselves, again, in a worst-case scenario where the remaining business on the lines does not justify the continued operation by Chicago Terminal.

[robertmroman]

It WOULD be interesting to see CTR\'s books. The STB filings were for Iowa Pacific\'s Permian Basin Railways to purchase and operate the 4.5 miles of Soo Line tracks. Unless Permian Basin bought it with cash or with a share in CTR, there\'s also probably a fixed cost of debt be serviced as well. THAT could be a killer.

For some reason, I seem to remember the Canadian Pacific\'s Soo Line having a minority interest in Chicago Terminal, but I can\'t find that document on the web. But if CTR were to cease operations, there might be ownership issues to sort through for any subsequent operator.

Incidentally, CTR\'s Bensenville operation was being challenged back in 2007. An outfit called Rail Properties was claiming that the Soo Line did NOT in fact own the right of way, Rail Properties did, and should Illinois courts agree, they would choose a different operator. The merits of the case are another matter but add legal expenses to the ongoing expenses CTR has. I would be mildly surprised if the matter has been settled.

(It\'s interesting the way the courts can be used as a form of legal mugging.)

be well,
bob roman

quote:Originally posted by TBurke

I too wonder how much longer Big Bay can hold out, especially with that Home Depot just a mile away and this brutal recession.  A recent Crains Chicago Business article mentioned General Iron Industries in the context of the scrap metal business being down also.

Chicago Terminal\'s operating costs are probably fairly low and variable I am guessing, with the bulk going to maintenance on that SW, fuel, and wages on an as-needed basis, plus rent to UP for use of the North Avenue Yard. The crew can work the Elk Grove industrial park on off-days.

I am guessing that they probably receive a flat switching fee from UP for handling cars on the \"last mile\" of around $200-$400 per car or so.  And they now have income from AOK for storing all of those gondolas.

At least ROW maintenance is nil for Chicago Terminal as most of its rails are set in concrete streets maintained by the city as is the Cherry Street bridge.  

I suppose in a worst-case scenario if Big Bay went out of business and Finkl Steel eventually relocates to the South Side, and Chicago Terminal pulled out as a result, UP could always work General Iron Industries and Sipi Metals.  The remaining track to General Iron would be a long spur essentially, though one that uses a drawbridge.  General Iron Industries also has water transportation as an option since today it ships out shredded metal on barges.  I doubt UP would want to give up a reliable customer for hundreds of gondolas per year.

Like other industries, General Iron Industries may also decide to take over the switching themselves, again, in a worst-case scenario where the remaining business on the lines does not justify the continued operation by Chicago Terminal.

[TBurke]

I\'m not sure what CTR paid Soo/CP for the rights to the former Milwaukee Road lines though what they actually own is a small percentage of that 4.5 miles.  My guess is that much of what was transferred in the sale were more in the realm of operating rights over city streets that would date back to franchise agreements in the 1880s of predecessor companies Chicago & Evanston and Chicago & Pacific.

From what I can tell all CTR owns would be the interchange track with the UP North Avenue Yard to the Bloomingdale Line, the remains of the former Rolling Mill Yard between Sipi and the Kennedy Expressway with the siding now used for storage of gondolas, the Bloomingdale Line from the interchange track across the river and east to Kingsbury Street, and the swingbridge and surrounding properties.

The rest of its operations take place on city streets, across private parking lots, or across strips of land owned by others using easements.

Whoever the owner is of the land underneath the line north of Belden is eagerly awaiting the official abandonment and removal of track so this property can be developed into condos or retail.