RAIL TO COST $6.5 MILLION

April 30, 2002 12:00 am
WILD RAILS: The line (Observer file photo).
WILD RAILS: The line (Observer file photo).

By Alice Perry Linker

Observer Staff Writer

ENTERPRISE — Wallowa County may buy a railroad for $6.5 million, the Wallowa County commissioners announced Monday.

Included with the purchase price is a commitment from the owner, Idaho Northern and Pacific, to run a freight train from Elgin to Wallowa for one year at no cost to the county.

The county announced that it may buy about 65 miles of track, including sidings, 766 acres of right of way and 40 bridges. Two locomotives and several passenger and freight cars are included in the sale price, the county announced.

The commissioners, who led a public hearing Monday, did not present a business plan or a financial feasibility study, although Commissioner Ben Boswell said a plan is being developed. Several in the audience of about 35 said they would like to see a business plan before deciding whether to support the purchase.

Business facilitator Myron Kirkpatrick, who has been involved in analyzing purchase conditions, testified that the railroad owner will "at his own expense reopen the Elgin-to-Wallowa portion of the line to Class 1 Standards within 30 days and maintain it at that level during at least the first year of operations."

Kirkpatrick, who apparently presented the county's position regarding the purchase, did not say how the railroad could pay for running the line, but Wallowa Forest Products operates a sawmill near Wallowa and may be willing to ship product by rail.

Another opportunity for freight shipment by rail may exist in Joseph. Diane Snyder, executive director of Wallowa Resources, said potential investors are interested in buying Joseph Timber, which has been closed for several months.

Wallowa Resources has a financial interest in the mill.

"These investors have said they will use rail service," she said.

The Oregon Legislature has allocated $2 million for the purchase of the line from Elgin to Joseph under certain conditions, and the county announced that Idaho Northern and Pacific has "agreed to take a promissory note for the remaining $4.5 million, secured by the assets of the railroad line."

Kirkpatrick testified that the state "is guaranteeing" the remainder as repayment for a loan if

the county "is unable to

make other long-term financing arrangements."

But Jim Zelenka of the Economic and Community Development Department said Monday afternoon that the state requires a financial feasibility evaluation and a property appraisal before agreeing to back any debt.

"We need to see those things before we make a commitment," he said. "It's all predicated on financial feasibility."

Jim Seiffert, a rail inspector for the Oregon Department of Transportation and a resident of Wallowa County, told the audience that the rails are in "fair to good" shape, and he estimated that only about $68,000 would be required to prepare the rails and rail bed for opening to Class 1 standards.

Under Class 1 standards, freight trains may run at 10 mph, and passenger trains at 15 mph.

"We'll need some maintenance to open," Seiffert said. "The bridges are sound, but some look ugly. We'll need to rebuild the walkways and remove vegetation to prevent fires."

Several people attending Monday's hearing at the county courthouse supported the idea of purchasing a line, and some support the idea of a county-operated tour train from Elgin to Joseph.

One resident, Cathy Sturbenz, said that "it would be wise to support transportation that is not dependent on Mideast oil."

The county reported that a rail consultant, Gary Hunter, hired by Wallowa County in August, has developed freight traffic forecasts and provided several different business plans. None of the forecasts or business plans has been made public.

State funding also depends on the creation of a two-county board to purchase, administer and maintain the line. Union County is expected to begin planning the organization of such a board following an executive (closed) session at 10 a.m. Wednesday.

Commissioner Steve McClure, Union County's liaison with Wallowa County, has said that before a separate board is created, Union County will have public hearings to learn if residents support such action.