“This is an historic opportunity to deliver great value to citizens of Cincinnati and realize a substantial return on the investment and foresight of our predecessors,” Pureval said.
The 337-mile freight railway, which runs from Cincinnati to Chattanooga, is the only city-owned multi-state railway in the country. Over the years, Cincinnati has leased the line to rail operator Cincinnati, New Orleans and Texas Pacific Railway (CNO&TP), a wholly-owned subsidiary of Norfolk Southern. The first lease agreement with CNO&TP was signed in 1881 and has been renewed on a 25-year cycle ever since. The current lease agreement is set to expire in 2026, according to the city.
Currently, the city receives $25 million annually to lease the railway to Norfolk Southern. Under the proposed sale, the city would receive $1.6 billion which would be fed into a trust fund known as the "Building Our Future" trust fund. The trust would dole out no less than $25 million to the city each year after the sale, but the mayor says the annual payout could more than double during some years.
“Based on investment returns, we’re projecting that that will increase year-over-year to $50-60 million dollars without touching the principal,” Purval said during a press briefing. Funding from the trust would be used only for the upkeep of existing infrastructure like bridges, parks and recreation facilities.
“This couldn’t be coming at a more important time for our city,” Pureval said. “In just the next five years, we are facing $385 million in unfunded capital needs.”
The Cincinnati Southern boardThe trust fund from the sale would be managed by the Cincinnati Southern Railway board of trustees, whose bylaws mandate that no more than three members of the same political party can sit on the board. Trustees serve five-year terms, and there are no term limits.
Current board members include:
- Republican Paul Muething, president, on the board since 2018
- Democrat Paul Sylvester, treasurer, on the board since 1984
- Democrat Charles Luken, vice president, on the board since 2018
- Democrat Mark Mallory, on the board since 2018
- Republican Amy Murray on the board since 2019
Determining the railway’s fateThere will need to be multiple votes to make it so the sale can go through.
The city says the state's legislature must vote to change some legal language allowing the sale, and there will need to be regulatory clearance from the U.S. Surface Transportation Board, but the ultimate decision will come from Cincinnati voters next fall.
The city says that if voters reject the sale, the Cincinnati Southern Railway board of trustees will pursue a renewed lease agreement with Norfolk Southern, similar to what has been in place for decades.
Railway issuesThe news of the proposed sale comes as rail workers across the country are organizing a potential strike. Four freight rail unions made up of nearly 60,000 rail workers have reportedly voted down a five-year contract that was brokered by the Biden administration back in September. If one of the rail unions decides to strike, all of the unions – about 115,000 freight rail workers – will follow suit. The vote could bring freight trains and some Amtrak commuter systems to a halt.
It’s unclear if current union efforts have factored into the Cincinnati Southern Railway board’s vote to sell the railway or if a possible strike would halt operations of the Cincinnati Southern Railway.
Reddit and Twitter react
I'm not in favor of giving up public control of our railway the city built 140 years ago for short term gains instead or realizing what large value it has in long run.— Josh Junker (@JoshJunker2) November 21, 2022
Why would the city sell the railroad when Warren Buffett puts HUGE stakes in railroads as a great investment.
Man I love Cincinnatians.— berry boy (@alexeddybrownie) November 22, 2022
Yesterday, 90% of the city didn’t know we owned our own interstate rail line. Today, we will bite your face off if it gets taken away from us.
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