DEC puts 90-day hold on request for Tahawus line abandonment

By Michael Virtanen

New York’s Department of Environmental Conservation has asked federal authorities to put a 90-day hold on its request to declare the 30-mile rail line from North Creek to the former Tahawus mine in the central Adirondacks abandoned, while talks have continued for the possible takeover by a new freight operator.

In an application to the Surface Transportation Board filed Sept. 10, New York officials said the line had no active shippers and the owner had “no reasonable prospect for developing future freight service.” That permits a federal finding of abandonment under the test of “public convenience and necessity,” the DEC said.

However, Denver-based railroad operators and developers have shown interest in buying the line and conducting freight service, while the current owner has removed its trains and nearly all equipment.

OmniTRAX, which operates freight lines in other parts of the U.S., has an agreement with Iowa Pacific “for exclusive negotiation for a period of time to see if the two parties can reach an understanding about purchasing it,” said company Vice President David Argenbright.  He declined to say how long that period is.

There’s no purchase imminent, but discussions are ongoing, a spokesman said on Oct. 9.

“DEC’s actions are intended to remove Saratoga North Creek Railway from the Tahawus line and ensure that long term rail storage will not happen in the future,” DEC spokeswoman Lori Severino said. “New York State is interested in working with Omnitrax, provided that it can achieve those goals.”

On Oct. 16, the state cited the ongoing talks and a letter from OmniTRAX, saying it would enter a binding agreement with the DEC not to store rail cars on the line long-term in exchange for the department dropping its abandonment application.  “The precise terms of the potential agreement are the subject of ongoing negotiations between OmniTRAX and DEC,” Assistant Attorney General Joshua Tallent wrote to the Surface Transportation Board.

Calls by the Adirondack Explorer to the attorney and president of Iowa Pacific Holdings, Chicago-based parent company of Saratoga and North Creek Railway, have not been returned.

Matt Simpson, Horicon supervisor and Warren County Public Works Committee chairman, said OmniTRAX also has expressed interest in acquiring the 40-mile rail line from North Creek south to Saratoga that the county owns.  The municipality is in the process of drafting a bid request for the lease or sale of its line, he said.

The DEC abandonment filing noted that the state has added nearly 70,000 acres of wildlands since 2012 that either lie along or would be accessible from the line, which “could represent an unparalleled opportunity to provide public access to some of the Adirondack Park’s most beautiful wild spaces.”

According to the DEC filing, suggested storage of up to 2,000 unused tankers and other cars on the Tahawus line by current owner Iowa Pacific, which would go into part of New York’s Forest Preserve, “requires” a federal abandonment finding. Dozens of cars were stored there last winter then removed in the spring after state authorities objected. About half the track runs through state-owned backcountry to the privately owned mine, New York’s filing said.

“There is no interpretation of the Forever Wild Clause (of New York’s Constitution) that would permit SNCR or any actor, public or private, to construct what would be tantamount to a 30-mile rusting steel wall through the heart of the Adirondack Park,” the DEC told the federal board. “Not only would such a use render the single-tracked line utterly useless for freight transportation, it would be anathema to the conservation purposes for which the Forest Preserve was established.”

Meanwhile, some conservationists have proposed turning that corridor into a rail trail for recreational use.

New York’s abandonment application doesn’t specifically call for that. However, it references “low-impact recreational use _ principally hiking, camping, canoeing, horseback riding and bicycling” in similarly classified areas of the Forest Preserve and says the state and municipalities  “should be free to plan for future uses of the line” that are complementary.

The Tahawus mine began producing titanium during World War II but ceased operations in 1989. The property was bought earlier this year by Mitchell Stone Products in Tupper Lake, which sells crushed stone from the mine tailings for construction, trucking it to local municipalities and other buyers in the region.

An analysis filed by Mitchell with the state earlier this year said rail shipping was too expensive currently to use it to reach more lucrative markets in New York City and Long Island. However, owner Paul Mitchell said that could change in the future for the recycled material at Tahawus. 

“We are a customer at the end of the line that could have sales,” Mitchell said.

Arganbright said markets are dynamic and they change. “That’s exactly what we’re evaluating, whether we can make that market now work,”  He noted that the ethanol and crude oil that freight lines were hauling heavily a few years ago have declined.

Saratoga and North Creek Railway acquired the line in 2011 and proposed freight service for Tahawus and the Barton mine in North River and also began a tourist train from Saratoga Springs to North Creek. The tourist train shut down this year.

Ed Ellis, president of Iowa Pacific, told Warren County officials that he needed the income from storing cars on the line until the freight business took hold.

New York officials noted that the rail line also faced a $1.3 million federal tax lien as well as $100,000 of property taxes owed to Warren and Essex counties.

OmniTRAX doesn’t currently operate passenger service, but it would consider offering it under contract, Arganbright said. “We’re not really interested in directly being a passenger operator.”