Astute readers of yesterday's briefs will have noted that the State of Pennsylvania concluded its final round of TEA-21 Transportation Enhancements grants without any funds having gone to the EBT. A partial explanation of what happened to the EBT application is now available on the RyPN Briefs page.

eledbetter@rypn.org

Eric,

I read the RyPN brief and am saddened to hear the news about the EBT.

Is it accurate to say that the bottom line in all of this is that Joseph Kovalchick is being unrealistic/unreasonable in his expectations as to just how much he should be paid for the EBT?

While it's obvious that the EBT is a priceless, irreplaceable national treasure, it seems like Joe Kovalchick is failing to take into consideration that it's pretty much a diamond in the rough, requiring tens of millions of dollars to stabilize, rehabilitate and operate the railroad for the foreseeable future.

My biggest fear is that he'll continue to hold the EBT hostage while he waits for a bigger pay day all the while mother nature, developers and vandals will continue to take their toll.

Would writing civil, caring letters pleading to Joe to do the right thing make a difference?

We really can't afford to loose this one.

Sigh.

mas2102@ix.netcom.com

I am now thoroughly convinced that the ultimate death of the EBT is imminient. The owner appears to be more preoccupied with playing games with the public entities that could save (and fund) the railroad, rather than making the long-term preservation of the railroad his first priority. I understand why people are so skeptical about government funding of preservation projects, but one must endeavor to reach a compromise for consenus building on both sides to take place. It seems like every previous attempt to publicly fund and preserve the EBT has ended in failure because the owner could not come to terms with the public entity involved, possibly due to a mistrust of government. It sounds like the owner may be part of the problem.

The owner should think about how s/he will be remembered by history. Did they do everything in their power to save a national historic treasure, did they fall short of their goal but at least tried, or did they allow personal bias to color their decisions which resulted in total loss?

The most frustrating part is that much of the railroad is still with us RIGHT NOW and CAN BE SAVED. It has not completely been erased from the earth. It should be saved while much of it is still tangibly with us. This not brain science folks.

I have given up all hope for the EBT's survival. The railroad is very tired and with the passing of each day it is losing the battle against time. As much as I hate to say it, full restoration simply will never happen unless the current owner makes it happen. I challange him to rise to the cause and do it. Actions speak louder than words.

Old Easty, rest in peace.

> Astute readers of yesterday's briefs will
> have noted that the State of Pennsylvania
> concluded its final round of TEA-21
> Transportation Enhancements grants without
> any funds having gone to the EBT. A partial
> explanation of what happened to the EBT
> application is now available on the RyPN
> Briefs page.

> Old Easty, rest in peace.

"A man who knows the price of everything, and the value of nothing."

Simple fact: Mr. K is a scrap dealer.
Another simple fact: Many of us who have long been in the trenches of this "game" have dealt with (or tried to) scrap dealers. Enough said.

hpincus@mindspring.com

> Eric,

> I read the RyPN brief and am saddened to
> hear the news about the EBT.

> Is it accurate to say that the bottom line
> in all of this is that Joseph Kovalchick is
> being unrealistic/unreasonable in his
> expectations as to just how much he should
> be paid for the EBT?

I don't know exactly what ARC and PennDOT offered to Mr. Kovalchick, nor do I know his position on the matter. The Brief represents ARC's official point of view on the subject, which is the story from one side of the table.

On the positive side, some small-scale but significant stabilization work has been undertaken around the shops recently by the hard-working and dedicated EBT staff, and there is a strong and welcome possibility that the FEBT may be invited to join the project to extend and continue it. That would be welcome news indeed.

eledbetter@rypn.org

I serve on the Southern Alleghenies Planning Commission's Rural Transportation Technical Committee that first considered and voted on the Allegheny Ridge Corporation's request for the second $1 million enhancement funding several months ago. The recommendation to reject the funding application and further to withdraw the previous approved funding came from this committee. There was general agreement that the EBT is a treasure, that "something" needs to be done, but our committee had only $1 million to disburse. There were a number of other projects that were "ready to go" with preliminary engineering completed and local match funding in place. Allegheny Ridge was asking for the entire $1 million without having actually established the proposed non-profit entity, with no agreement with the owner, no estimate of purchase cost, etc. It was obvious that so many other worthy projects that were better prepared could not be held up waiting for the EBT situation to come together.

The tone of the Allegheny Ridge statement is unfortunate. There is equal blame to go around on the public agency side as well.

I know the Kovalchicks and believe they have deep affection for the EBT. It is both a blessing and a curse for them but in the end a solution will be found.

- Alan Maples

AMaples@aol.com

> I serve on the Southern Alleghenies Planning
> Commission's Rural Transportation Technical
> Committee that first considered and voted on
> the Allegheny Ridge Corporation's request
> for the second $1 million enhancement
> funding several months ago. The
> recommendation to reject the funding
> application and further to withdraw the
> previous approved funding came from this
> committee. There was general agreement that
> the EBT is a treasure, that
> "something" needs to be done, but
> our committee had only $1 million to
> disburse. There were a number of other
> projects that were "ready to go"
> with preliminary engineering completed and
> local match funding in place. Allegheny
> Ridge was asking for the entire $1 million
> without having actually established the
> proposed non-profit entity, with no
> agreement with the owner, no estimate of
> purchase cost, etc. It was obvious that so
> many other worthy projects that were better
> prepared could not be held up waiting for
> the EBT situation to come together.

> The tone of the Allegheny Ridge statement is
> unfortunate. There is equal blame to go
> around on the public agency side as well.

> I know the Kovalchicks and believe they have
> deep affection for the EBT. It is both a
> blessing and a curse for them but in the end
> a solution will be found.

> - Alan Maples

Respectfully, when the full record can be made public, I do not believe that any objective reader will conclude that there is equal blame on both sides. Keep in mind the basic situation at this point. Having called on the public to write letters to government to fund help for the EBT (October 2000 and October 2001), the owner rejected $1,000,000 for an option to buy (different from the purchase price which remained to be negotiated) that would have cleared the way for an immediate infusion of $1,000,000 to rehabilitate the current EBT operation.

Allegheny Ridge Corporation (ARC), with its resources, is only one of many responsible parties trying together to find a good future for the EBT. The public sector has demonstrated extraordinary commitment to the EBT and constancy of purpose in trying to get meaningful help to the endangered National Historic Landmark.

The Finding of Fact was written with great care to be an accurate summary of the situation. It sounds unfortunate because the situation is unfortunate. The reason that ARC could not present the Technical Committee with the required nonprofit entity is that, despite repeated requests, the owner did not fulfill his signed commitment to create that nonprofit. Well before getting to the present impasse, PennDOT wanted to kill the original TEA-21 application for the same reason. The fact that the application was kept alive and funding preserved for so long is testament to the public sector's determination to make something work to positive effect.

Very creative approaches were offered to try to meet the issues of the owner while ensuring responsible stewardship of the public's proposed investment in the EBT. To the best of my knowledge, the owner never responded with terms that would assure that necessary level of accountability, as ARC's Finding of Fact basically states. This is why ARC could not go to the Technical Committee with an agreement with the owner.

The inability to set a price is an interesting point. I have been informed that the principals on the public sector side have concluded that the owner's interpretation of price is open-ended. Perhaps we yet shall see if that is true.

Phil Padgett



ebt4evr@aol.com

What a great resource RyPN is as it allows for the intelligent discussion of important issues such as the EBT by people on the sidelines (like myself) and those that are in the know.

This thread made me recall a discussion I had last year concerning the EBT. To the best of my recollection, I was told (and I'm NOT trying to state this as fact) that one the major sticking points was that Joe Kovalchick was only willing to sign over control of the EBT (via a non-profit entity?) for a 10 year period whereas the state was seeking a minimum lease period of 30 years (as opposed to an outright sale to the state?) to better justify its financial investment.

I'm not really familiar with the procedure the state of PA usual follows in matters like this other than it was said that PA's offer was very generous and atypical of what usually requires before it will undertake/fund such a project. From an outsiders perspective, it seems as though Joe Kovalchick wants to burn the candle at both ends by expecting the state of PA and the feds to contribute huge sums of money while at the same time retaining personal control of the EBT.

Any truth to this or is it pure bunk?

I'm not trying to bash Joe Kovalchick or spread any unsubstantiated rumors. I realize that if wasn't for him and his father, we wouldn't even be discussing the fate of the EBT in 2002. All I'm hoping for is what many of us want; a favorable solution to all parties involved that will ensure the long-term survival of the EBT before it's too late.

mas2102@ix.netcom.com

> The Finding of Fact was written with great
> care to be an accurate summary of the
> situation. It sounds unfortunate because the
> situation is unfortunate. The reason that
> ARC could not present the Technical
> Committee with the required nonprofit entity
> is that, despite repeated requests, the
> owner did not fulfill his signed commitment
> to create that nonprofit. Well before
> getting to the present impasse, PennDOT
> wanted to kill the original TEA-21
> application for the same reason.

Phil, I appreciate your perspective on this, however it strikes me strikes me as a bit disingenuous on the part of ARC to issue such a bitter statement when in fact they apparently knew they were bringing a deficient application to the RTTC for consideration. Politically, they should have known it would be impossible for the committee, which has to consider requests from five counties, to give them the entire allocation of funding. I don't blame them for trying - lots of applications get considered and rejected. But even if everything had been signed and sealed with the owners, this would have been a tough one to do.

Enhancement funding is probably not the best way to go with a project of the scope of EBT. It was at best a stop-gap measure and one that had a number of strings attached.

I argued in favor of the funding at the RTTC meeting but I don't blame the committee for its decision.

- Alan Maples

AMaples@aol.com

We have worked for both the Allegheny Ridge Commission and for Mr. Kovalchick. The situation is partly due to Joe's lack of trust for what will long term happen with the EBT in government hands. You must understand that as a businessman too many of the Kovalchick's relationships were with the regulatory side of government where the tone is, "I am from the government and am here to help." If I had his experiences I would be just as guarded.

I do not see him changing that level of concern in the short term. As advocates of preservation we must continue to work on the edges as much as the Kovalchicks will let us. The big preservation effort may not happen until new eyes look at the big picture. Let us also say a few prayers that nothing major negative happens in the mean time.

Gary Landrio

Stone Consulting & Design
garyland@stoneconsulting.com

From what I have heard about the situation, it is utterly unfair and unrealistic to put ALL the blame in Joe Kovalchick's lap for a couple reasons.
Reason 1: Despite what would be needed to rehabilitate it, has anyone figure out the actual salvage value of the land, and materials? Would you sell me your house for $100 and car for $1, just because I said it was in the public interest?

Reason 2: Joe was not his father's only heir, and I have heard that some of the rest might be happier if the EBT all fell into a scrap furnace... Especially if it brought them more money. (This is also the reason that none of the materials in the Kovalchick Salvage yard in Indiana can simply be transferred for use on the EBT.)

Still, writing letters couldn't hurt. but write your congessmen, too. AND when you're writing Joe, don't forget to include a cheque for a couple tickets, and a SASE.

> Eric,

> I read the RyPN brief and am saddened to
> hear the news about the EBT.

> Is it accurate to say that the bottom line
> in all of this is that Joseph Kovalchick is
> being unrealistic/unreasonable in his
> expectations as to just how much he should
> be paid for the EBT?

> While it's obvious that the EBT is a
> priceless, irreplaceable national treasure,
> it seems like Joe Kovalchick is failing to
> take into consideration that it's pretty
> much a diamond in the rough, requiring tens
> of millions of dollars to stabilize,
> rehabilitate and operate the railroad for
> the foreseeable future.

> My biggest fear is that he'll continue to
> hold the EBT hostage while he waits for a
> bigger pay day all the while mother nature,
> developers and vandals will continue to take
> their toll.

> Would writing civil, caring letters pleading
> to Joe to do the right thing make a
> difference?

> We really can't afford to loose this one.

> Sigh.

> We have worked for both the Allegheny Ridge
> Commission and for Mr. Kovalchick. The
> situation is partly due to Joe's lack of
> trust for what will long term happen with
> the EBT in government hands. You must
> understand that as a businessman too many of
> the Kovalchick's relationships were with the
> regulatory side of government where the tone
> is, "I am from the government and am
> here to help." If I had his experiences
> I would be just as guarded.

> I do not see him changing that level of
> concern in the short term. As advocates of
> preservation we must continue to work on the
> edges as much as the Kovalchicks will let
> us. The big preservation effort may not
> happen until new eyes look at the big
> picture. Let us also say a few prayers that
> nothing major negative happens in the mean
> time.

The scuttlebutt rumors around some EBT circles is that Joe's obstinacy derives in large part from what was supposedly a deathbed promise to his father, Nick (the original savior of the EBT), never to sell the railroad to "the government" or let the government get its hands on the line (depending on which version you hear). If one listens carefully to various statements and looks at various events over the years, it becomes apparent that the family's mistrust of ANY governmental body is deep-seated to the point of paranoia.

Nonetheless, I have heard several very reliable reports that many years ago, a private party approached Nick or Joe with the equivalent of the proverbial suitcase of cash, ready to cut the necessary deal. This party was supposedly promptly shown the door.

lner4472@bcpl.net

> What a great resource RyPN is as it allows
> for the intelligent discussion of important
> issues such as the EBT by people on the
> sidelines (like myself) and those that are
> in the know.

Indeed! On the afternoon of May 2, the Administrator of the EBT-LIST chat site terminated the string discussing this situation there. We are so fortunate to have a forum where truth is welcome. Mark Smith, "Eleanor P" lives!

> This thread made me recall a discussion I
> had last year concerning the EBT. To the
> best of my recollection, I was told (and I'm
> NOT trying to state this as fact) that one
> the major sticking points was that Joe
> Kovalchick was only willing to sign over
> control of the EBT (via a non-profit
> entity?) for a 10 year period whereas the
> state was seeking a minimum lease period of
> 30 years (as opposed to an outright sale to
> the state?) to better justify its financial
> investment.

In May 2000, EBT owner Joseph Kovalchick rejected the offer of $1,000,000 in 1999 TEA-21 funding (for which he had applied). At that point the shape of the project and funding had evolved through sustained, very creative attempts by the public sector to meet the owner's demands.

Because Mr, Kovalchick would not act his application for funding's commitment to create a nonprofit organization to which he would donate the EBT property to be rehabilitated in the pilot project, Allegheny Ridge Corporation (ARC) was to be the the grantee. The agreement then on the table was for Mr. Kovalchick to lease the EBT Shops Blacksmith Shop to ARC who would maintain control of the property until there no longer was a Federal interest. The parties needed to agree on the length of the lease.

Mike is correct that the normal Federal period for amortizing the public interest in such a grant is 30 years. Mr. Kovalchick wanted a 10-year lease with a buy-back provision. A buy-back provision would have allowed him to reacquire the property following appreciation through rehabilitation with public funds. For obvious reasons, Federal rules do not allow a buy-back provision.

In attempt to meet Mr. Kovalchick halfway on the length of the lease, with PennDOT guidance, ARC offered a 20-year lease with no buy-back provision. Unwilling to accept this proposal, Mr. Kovalchick rejected the project.

Subsequently, on October 8, 2002, in a speech to the crowd before the EBT Fall Spectacular Whistle Salute, Mr. Kovlachick said that the EBT might not continue to run and called on those present to write to the Governor of Pennsylvania to ask that he support the EBT. He did not tell the crowd that, five months earlier, he had rejected $1,000,000 from that very source.

To their great credit, PennDOT continued to hold onto the $1,000,000 for the EBT and the public sector parties came together again for another attempt to find a way to help the endangered railroad. The result was the most recent initiative, now ended.



ebt4evr@aol.com

I guess in a way you can't fault Joe Kovalchick for holding out for a better deal. Afterall the state of PA gave out $100 million to our already wealthy baseball owners in both Philadelphia and Pittsburgh. Obviously the sad part in all of this is the EBT will continue to deteriorate/decay as long as Joe plays hardball (no pun intended).

Phil, is there any chance for some kind of breakthrough or do you see this stalemate continuing a long time?

mas2102@ix.netcom.com

Mr. Padgett needs to learn that discression is the better part of valor. His post, although it was largely a quotation from the ARC, nevertheless represents a provocative and polarized point of view. The facts of the matter could have been presented without either the editorialization of ARC or of Mr. Padgett. Further, the post does not contain sufficient details on the negotiations between ARC and the EBT for the ascertions against the EBT ownership to be supported by hard facts.

It was a similar type of document presented by then-FEBT Timber Transfer magazine editor Phil Padgett in the Vol 2, No. 3 issue that angered the EBT ownership and caused the rift between the EBT and the FEBT from 1985 until his departure as TT editor and BOD member in 1997.

For the past five years the FEBT has been carefully mending fences with the EBT and has been supportive of the EBT's real attempts to improve the condition of the railroad. Next month FEBT volunteers were to begin work on restoring structures in Rockhill Furnace for the first time since 1985. Mr Padgett's lack of discression may have just torpedoed that effort before it even began. In an effort aimed toward damage control, I ended a thread on the EBT-list (which by list rules I am empowered to do at my discression) that was not aiding (but rather hindering) the preservation and restoration of the East Broad Top. Afterwards I received a number of messages from list members thanking me for the action and none in support of Mr. Padgett's actions.

Although Mr. Padgett no longer speaks for the FEBT, his actions open old wounds that have only just healed. If he wishes to have a jihad against the ownership and management of the EBT, I suggest he resign his membership in FEBT, as that group (for whom I am NOT speaking in this post) is commited to working with the management of the EBT to improve the condition of the railroad.

I am reminded of an incident in World War II when British codebreakers discovered the Germans planned to bomb the city of Coventry. Rather than tipping off that they had broken the German code, Churchill decided not to evacuate the city. Thousands died but millions were saved when the war was won, largely due to the broken code. Mr. Padgett seems to desire a victory in his battle against the EBT management even at the cost of the war to save the EBT from the ravages of time. I suggest he either adopt a more proactive approach or insulate himself from the majority of us who have.

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