Tuesday, May 24, 2022

The little project that could? Rail realignment could transform the region, for a price

The task force’s proposed new rail line in dotted red. The proposed trolley system – included in the $500 million – $1 billion price tag, is highlighted in yellow, using mostly pre-existing CSX rail. (Port City Daily photo / CITY OF WILMINGTON)
The proposed new rail line in dotted red. The proposed trolley system – included in the $500 million to $1 billion price tag, is highlighted in yellow, using mostly pre-existing CSX rail. (Port City Daily photo / CITY OF WILMINGTON)

Audio: Reporter Benjamin Schachtman breaks down the story.


WILMINGTON — The rail realignment project is an ambitious plan to replace the city’s commercial freight line with public transportation, while rerouting rail service to the Port of Wilmington across the Cape Fear River. The projected cost of the project in a recent feasibility study was $650,000,000 — but with uncertain construction details, the price could run as much as $1 billion.

That cost is daunting, but the project has continued to move forward, bringing in new potential stakeholders.

The rail realignment project has its origins in a problem: CSX freight lines travel through Navassa and over the Cape Fear River to the north of Wilmington, then take a looping eight-mile detour through Wilmington before arriving at the Port. The trip takes about four hours — costing shipping companies money and bringing traffic to a halt at thirty two intersections around the city.

Take an in-depth look at rail realignment in this related story: This ambitious railway plan could reshape Wilmington. It could also cost a billion dollars

The proposed solution would require a new bridge for freight rail – separate from the proposed Cape Fear Crossing bridge for vehicular traffic – which would be an undertaking by itself. It would also involve re-purposing current CSX lines into a mass transit service. The realignment project could increase the Port’s ability to handle freight, reduce traffic in Wilmington, and give the city increased public transit service in underserved areas.

But the project has gone far beyond Wilmington.

In part, that’s because even using the most conservative cost estimate, there is no way for the City of Wilmington to afford the project. That’s why Laura Padgett, who has shepherded the project along since it’s early days in Mayor Bill Saffo’s task force on rail realignment, has been approaching a growing number of potential stakeholders.

“No one entity could possibly manage or fund this,” Padgett said. “But there are so many other options if we think outside the box.”

Padgett agreed that the cost can sometimes shock people, but put the project into perspective with other major infrastructure plans.

Laura Padgett, Chair of the Mayor's Task Force on Rail Realignment, compared the cost of the project to the I-140 extension. (Port City Daily photo / BENJAMIN SCHACHTMAN)
Laura Padgett, Chair of the Mayor’s Task Force on Rail Realignment, compared the cost of the project to the I-140 extension. (Port City Daily photo / BENJAMIN SCHACHTMAN)

“The I-140 loop will end up costing about the same – about $600 million – and we don’t hear a great public outcry over the cost,” Padgett said. “And you have to ask, ‘did it create and transform, did it change as much as this project would, for a similar price tag?’

The City of Wilmington apparently agreed with Padgett on the transformative power of rail realignment on traffic, public transportation, and economic development. Wilmington approved a feasibility study earlier this year; now the question is not if the plan will work, but who will pay for it.

County-level support

Rail realignment concerns Brunswick County, too, as rerouted freight lines would travel on the western shore of the Cape Fear. (Port City Daily / COURTESY CITY OF WILMINGTON)
Rail realignment concerns Brunswick County, too, as rerouted freight lines would travel on the western shore of the Cape Fear. (Port City Daily / COURTESY CITY OF WILMINGTON)

Brunswick and New Hanover counties have obvious stakes in the plan, since it will radically change the rail traffic along the Cape Fear.

Brunswick County hasn’t developed an official position, according to Board of Commissioners Chairman Frank Williams, but the appeal of the project is at least twofold.

“First, people from Brunswick County drive into Wilmington, and if this plan would make it safer and easier for them to do that, that’s a benefit. Second, if the project makes the last mile of rail into the port more efficient, that’s obvious an economic benefit, on both sides of the river,” Williams said.

Williams added, “the question is how you do you pay for it?”

Though there are possibilities of public-private investment, rail realignment would still have to compete with other projects, like long-debated plan to add a third bridge over the Cape Fear River. Williams also said he would be concerned to make sure that riverfront property in Brunswick County wasn’t negatively impacted.

On the New Hanover County side of the river, Board of Commissioners Chairman Woody White shared many of William’s sentiments.

“There is unanimity on the idea, everybody agrees with that, and it’s worthwhile to have the discussion,” White said. “It’s fascinating to see all the possibilities, but fascinating without funding, it’s just not feasible.”

White said that the project is far beyond the scope of the county’s budget, but that “with state and possibly federal funding, it could definitely be possible, and we’d want to be a part of those conversations.”

White said, for now, he believes that if the project is to break ground, it will be driven by the market.

“When the CSX or other rail companies reach that point, where the market has safety concerns, or efficiency concerns, that’s when they’ll invest in those capital projects,” White said.

According to Padgett, Pender County has expressed interest in the project, as it could provide a much more efficient freight connection between Pender’s industrial park and the Port. So has Columbus County, according to Padgett, “there’s been some private investment interest there.”

Historically, Padgett added, Columbus County was served by a freight line that passed through on the way from Wilmington to Hamlet, in Richmond County. Part of the Seaboard Air Line, Columbus County sat on the longest stretch of straight track in the U.S., nearly 90 miles between Laurel Hill and East Arcadia.

Support from North Carolina and the Port of Wilmington

(Port City Daily photo/Courtesy NC Ports)
The Port of Wilmington has rail service to Charleston and other major freight hubs. The problem is getting that freight through Wilmington quickly.(Port City Daily photo / Courtesy NC Ports)

Padgett recently met with North Carolina’s House Select Committee on Strategic Transportation Planning and Long Range Funding Solutions, along with Wilmington’s Director of Planning, Development, & Transportation, Glen Harbeck. The meeting, held at the Port of Wilmington, brought together state representatives and Port staff.

“The Port has been growing rapidly — the crane overhauls, the turning basin, those infrastructure investments have paid dividends, and they’ve had bipartisan support at the state level,” Padgett said.

The Port would be a major beneficiary of rail realignment, and Padgett said she felt the plan had received a good reception by the Select Committee. Representative Holly Grange, a member of the Select Committee, agreed.

“Chairman (John) Torbett referred to this plan as a ‘no-brainer,’ we think it’s a very solid plan,” Grange said.

Grange added that while the funding issue would require “creative solutions,” including the possibility of public-private partnerships, that rail realignment would be crucial to helping the Port compete.

“In the shipping logistics field, time is money. Getting freight in and out of the Port quickly means saving money — these companies aren’t going to come to North Carolina out of loyalty. They’re going to come here because it’s makes sense for the bottom line, otherwise they’ll ship through Charleston, or Savannah,” Grange said.

The ability to move freight faster – and more directly – to the Davis Rail Yard in Leland, would also help overland shipping keep up with the Port’s rapidly developing ability to harbor more, larger vessels, according to Paul Cozza, executive director of the Port of Wilmington.

“The Port of Wilmington is experiencing increased rail cargo tonnage and it expects to see continued increased volumes and larger ships in the coming years. For the state of North Carolina and the Port, it is critical that we invest in freight road and rail infrastructure as we continue to serve the State’s industries and growing population.”

Cozza called rail realignment an “attractive solution,” but added it “requires a lot of study and public input.”

Federal consideration

Padgett has been making the rounds, speaking with the transportation advisers for Senator Thom Tillis, and Congressmen David Rouzer and Walter Jones.

Rouzer said supporting the Port was important for the economic development, but hadn’t seen or considered any specific legislation for rail realignment.

Congressman Jones said the project was an important one, but lamented that “as a nation, right now, we’re going broke, and so a lot of projects – including that very good project down in Wilmington – may not be possible because we don’t have the money.”

Jones did not specifically preclude the idea of federal funding for the project.

Padgett said that Federal support would obviously be immensely beneficial, but that the project could definitely be realized with a mix of local, state and private investment. And that would most definitely mean getting CSX on board.

CSX

As White pointed out, the CSX owns the rail lines in perpetuity, which means that the county or state can’t simply buy the rails or absorb them through eminent domain. Whatever entity – or more likely, entities – end up tackling rail realignment, they’ll need CSX’s permission and cooperation.

The question remains, is CSX interested?

Many of those eager to see rail realignment move forward have been watching E. Hunter Harrison, the 73-year-old CEO of CSX. Padgett described Harrison as a “bottom line” executive, who has focused on more efficient logistics over large capital projects. Notably, CSX has apparently backed out of a $270-million terminal planned for Rocky Mount, North Carolina, despite being offered millions in subsidies.

The apparent cancellation of the Rocky Mount facility has cast doubt on the possibility of CSX investing in the rail realignment project. However, Padgett said she still has hope, because the ultimate goal of the project is to make freight shipping more efficient.

“Shipping is strictly a bottom line business, and our piece of track will create efficiency. Right now they pay when they use the tracks, they pay when they wait outside the Port,” Padgett said.

A difference of pennies on the dollar per pound of shipping, compounded over millions of tons shipped in and out of the Port, could make enough a difference. Even a fiscally conservative CSX could be interested in the project in the long run.

A statement from CSX, delivered by Media Relations Manager Laura Phelps, was cautious, but not outright opposed to the project:

CSX has participated in preliminary discussions with Wilmington and NCDOT officials about the proposed rail realignment in Wilmington. We remain focused on efficiently serving our current freight customers in Wilmington and at the port, and we’ll continue further discussion on the future use of existing rail infrastructure that balances the needs of the community and freight rail customers.”


Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001.

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