When Will Cincinnati Start to See Rail Sale Money?

We now have an idea when Cincinnati may start to see money flow in from the sale of the Cincinnati Southern Railway (CSR).

Voters passed Issue 22 on Nov. 7, which approved the sale of the CSR to Norfolk Southern for $1.6 billion. The money will exist in a trust that the CSR board will manage, and part of that includes selecting a financial advisor to properly invest the lump sum so the city can live off the interest.

The board convened on Nov. 14 to discuss the process of selecting that advisor, which is off to a delayed start.

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Assistant Cincinnati City Manager Billy Weber told the board during the meeting that a “mix-up” in the city’s procurement office caused two firms to miss the October application deadline. As a result, the board extended the deadline to Nov. 30 so those two firms can submit a bid. Sixteen other firms that already threw their hat in the ring will be allowed to edit their bids if desired during the extension.

The extension means the board will now select a money manager on Jan. 8 during the next scheduled board meeting.

Board President Paul Muething said the sale should be finalized on March 15, and that money from the sale would begin to flow to the city soon after. Norfolk Southern will still pay a prorated lease amount for January, February and March.

The city estimates it would see an annual return on the investment ranging from $50 million to $70 million, almost three times what the city earns from leasing the railroad to Norfolk Southern now. Legally, earnings from the sale could only be spent on maintaining existing city facilities like roads, rec centers and fire stations, which city leaders say is crucial given the city’s $300 million deficit.

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This article appears in Nov 15-28, 2023.