Is that common with shortline sales, that when a C1 makes the sell, they do not sell the land under the track or any other underground etc rights? That seems very one sided.

I’ve heard that was a condition of previous proposed sales. I would find that unacceptable as I would have no control of the land the track sits on. Your track would be at the mercy of the underlying land owner. I’m sure there’s many pages of “whereas” and “therefore” to make it nice and murky. But that’s my opinion... I could be wrong.

I know that I have managed shortline railroads where all we owned was the track and equipment, not the dirt under or around it. This allowed the owner to make money off fiber optic cables, power transmission lines, etc.

Interesting. So if that’s the deal here, the state buys the track and CSX still pays the property tax? The land value is by far the biggest chunk of the total assessed value. CSX would have to collect significantly more on easements than the tax bill unless theiy’re still running freight on the line. That would be one hefty agreement to determine who pays who for what.

Pay attention to this one. According to what was reported on in the Jacksonville FL newspaper, under topics of CSX financial performance - the current CSX methodology of determining operating ratio now INCLUDES sale of assets (line sales, property) as 'regular operating income' against the operating ratio instead of an extraordinary item.

This is important to understand because it really 'pushes the envelope' to get line sales, asset sales, equipment sales...ANYTHING done like that because it moves the needle ever so slightly on nudging the operating ratio that has become the mantra to the street. CSX is apparently the only class 1 that has adopted this (maybe) in terms of calculation, and as an ex-accountant, what appears to be going on is that the operating ratio, if not formal earnings per share calculation in front of the SEC, has some 'wiggle room' in it.

So that may be either an opportunity or a disaster, depending on your perspective and issue, but you sure need to be aware of it as it's impacting decisions.

https://www.bizjournals.com/jacksonvill ... es-of.html

For preservationists and museums, that sale deal you never thought you'd see....well...

"In 2017, CSX reclassified all real estate sales as operating income. In doing so, it eliminated a distinction between real estate with an operating impact and real estate with no operating impact – a distinction its competitors still make. 

All profits from real estate sales now impact operating ratio, with the profits – $236 million in the last 2.5 years – subtracted from the railroad’s expenses. For example, CSX’s sale of the Westin Savannah Harbor Golf & Spa helped lower its operating ratio.

Without the $154 million in real estate gains last year, CSX’s operating ratio would have been 61.5, not 60.3."

that does seem crazy with the Class 1 owning the land under the shortline. That seems very risky from the shortline's perspective, what if the Class 1 decides to then sell the land etc.... would create a sticky legal situation.

What about the NS/ UP spinnoffs? Same scenario?

Just remember that up until now part of every CSX spin-off deal of rail lines has been an outright prohibition of operating ANY excursions or steam locomotives on those lines. Until the fine print becomes available, don't get your hopes up.

One of the few sections I can think of where that wouldn't apply would be the W&A Subdivision. CSXT leases that line from the Western and Atlantic Railroad of the State of Georgia and the state can set whatever terms it wants in the lease. The nice thing is, the lease is not perpetual-every lease terminates after 25 years and the lessees have to bid for the new lease. The State of Georgia owns the Western and Atlantic Railroad of the State of Georgia and the State has been friendly towards excursion operators in the past.

For those unfamiliar with the State of Georgia, a number of years ago, a bill was passed and signed into law to permit the state to purchase rail lines that state representatives considered of necessity to certain districts that were identified as being at risk for abandonment. The state purchased those lines and contracts operations out to service providers, some of whom are amiable to excursion train operations. One major influencer in the formation of that bill was the Tennessee Valley Railroad Museum excursions that operated to Chickamauga, Trion and Summerville, Georgia. Had it not been for TVRM, that line would have been abandoned, cutting the counties it served off from rail transportation.

Moral of the story is, the railroads have no obligation to permit steam or excursion trains on their lines. It is our job as preservationists to incentivize railroads to grant us access to operate, where appropriate. In the case of the Chattooga and Chickamauga Railway, TVRM paid them per train to operate and still does. The local representative had the foresight to recognize the exposure the excursion trains provided to the communities that he represented and the opportunities it presented.

Here's a couple of interesting points from the VA Dep of Rail & Public Transporation's FAQ on this subject (full list is at http://www.drpt.virginia.gov/rail/trans ... -virginia/):

4) What does this new rail program involve?

Through an agreement with CSXT, the program allows Virginia to double Amtrak state-supported service and VRE Fredericksburg Line service (including first time ever weekend service) over the next decade in exchange for Virginia acquiring approximately 350 miles of CSXT right-of-way and 225 miles of track in the I-95, I-64 and I-85 corridors, and building incrementally over the next 10 years 37 miles of track in the I-95 corridor (including a new two track Long Bridge).

More specifically, Virginia is acquiring approximately ½ of the CSXT-owned railroad right-of-way between Washington, DC and Richmond, VA (RF&P), rights to use the tracks between Richmond, VA and Petersburg, VA, all of the CSXT-owned (but out of service) right-of-way between Petersburg, VA and Ridgeway, NC (S-Line), and all of the CSXT-owned right-of-way between Doswell, VA and Clifton, Forge, VA (Buckingham Branch Railroad). Track within the right-of-way purchased by Virginia also becomes Virginia property. With the acquisition, Virginia has committed to a series of infrastructure improvements to the RF&P right-of-way that will allow for doubling Amtrak state-supported and VRE Fredericksburg Line service, including the addition of VRE weekend service.

10) What does the program mean for the future of the Buckingham Branch Railroad?

Ownership of the Clifton Forge, Virginia to Doswell, Virginia section of the Buckingham Branch Railroad will transfer from CSXT to Virginia. CSXT will retain ownership of the line from Doswell, Virginia to Richmond, Virginia. Operation of the Buckingham Branch Railroad will continue under leasing arrangements Virginia and CSXT will have with the line’s short line operator – the Buckingham Branch Railroad Company.

Sounds like CSX's requirement that forbid any type of excursions (and kept Showalter's pacifics sidelined after the '93 trips between Charlottesville and Clifton Forge) will no longer be an obstacle if interested parties can work out an arrangement with the state after the deal closes in late 2020.

When dealing with CSXT you need to see the complete terms in writing before one can draw any conclusions as to what types of traffic/trains will be allowed to operate over the lines. I used to draw a paycheck from them. Trust me on that.