Norfolk Southern Bristles at North Chuck Rail Deal

Company says CSX proposal would constitute monopoly

July 20, 2010

By Greg Hambrick
Charleston City Paper

Rail lines pepper the Navy Yard at Noisette, a North Charleston mixed-use development stalled by the housing market bust and the lingering recession. Some tracks run through parking lots, others end abruptly in grassy medians or in the middle of the road.

Norfolk Southern bristles at<br /> North Chuck rail deal
The new port in North Charleston is going to need a transfer site similar to the one pictured. The question is whether it will heat to the north or south.

The one rail route still in use, though only rarely, runs between the Army Wives set and new lofts — one of the few projects under construction. Just down the road, Force Protection Humvees line up on a side street, awaiting transport. It’s indicative of the old Navy Yard’s unlikely marriage between its industrial roots and the City of North Charleston’s vision for a new hub of condos and commercial development.

Almost two years ago, North Charleston Mayor Keith Summey threw himself down on the tracks, rhetorically, warning that he wouldn’t allow new train traffic to run through the post-industrial urban center the city has been shepherding for more than a decade. He would go on to repeat that threat to the press, to the public, and to industry and state officials behind closed doors.

If they didn’t take him seriously before, everyone’s ears perked up earlier this month when Summey unveiled an agreement with rail company CSX and developers at Shipyard Creek Associates that would include a CSX-owned transfer facility south of the new port. It puts a thumb in the eye of efforts to rev up train engines straight through Summey’s dream of Navy Yard neighborhoods.

Opponents had remained silent through behind-the-scenes talks, but they’re coming forward to offer their pitch and plead for relief from anyone that will listen.

Through a complicated real estate exchange, Summey will get the rail right-of-way through several North Charleston neighborhoods and remove any lingering train traffic that runs through a portion of the revitalized Park Circle community. Meanwhile, CSX will get enough land for its new transfer facility and additional rail access to support it.

Norfolk Southern executives climbed off a plane last week, determined to make sure the public knew they weren’t on board with this deal.

“We always felt like this was more of a state issue than a Norfolk Southern issue,” says Steven Evans, Norfolk Southern vice president for ports and international.

That’s not to say they haven’t pitched solutions of their own. The company has offered its design and rail experience to state leaders, pouring over hundreds of scenarios and dozens of sites. Routes to the south of the new port are monopolized by competitor CSX, and this proposal would only cement the company’s control.

“We’ve told everyone that anything that comes in on the south puts us at a disadvantage,” Evans says. “In order to be competitive, we’ve got to come from the north.”

Norfolk Southern’s existing transfer yard is, ironically, about a block from North Charleston City Hall. Evans says that trains are already delayed 45-60 minutes at a time because of a nearby connection with CSX.

The concern is that delays will be exacerbated at a CSX-controlled facility because its trains will go first.

“We’d be completely at their mercy,” says Evans. “Anything that comes from the south and we lose control of our business.”

“This can be done without blocking us out,” Evans says.

That is true. But you’d have to go through Mayor Summey to do it, at least figuratively speaking.

The assumption is that the CSX deal would eliminate northern rail access. That’s not quite right. Both companies currently run about 3,000 train cars a year to the edge of Noisette Creek at the northern end of the property. S.C. Public Railways, a corporate division of the state’s Department of Commerce, take the cars down to waterfront industries.

“(Mayor Summey) has no authority to keep us out of the Navy Yard,” says S.C. Public Railways President and CEO Jeff McWhorter. “He’s not going to win that argument.”

S.C. Public Railways would manage the northern transfer facility as an independent third party, but in the discussions these days, it’s on the side of Norfolk Southern, quite possibly because Norfolk Southern is the only one enamored with the idea.

But there are several balls still in the air regarding the northern transfer site. Clemson University has already called dibs on the site as a prime spot to augment its wind turbine facility across the street.

Another question is whether Public Railways will be able to wrest control of the track and make the improvements needed to handle the new traffic. S.C. Public Railways has the right to run on the tracks, but the ownership is currently in dispute.

And then there’s the heavy price tag. It would cost roughly $100 million for the shared facility, McWhorter says. Public Railways has applied for federal grants, but has yet to find the money. A decision would likely come first on whether North Charleston gets the unspecified amount it will need in federal grants to make its land swap work. And a CSX victory would make a Norfolk Southern facility to the north a questionable investment.

Norfolk Southern says it wasn’t consulted on Summey’s deal. When pressed on what the city gets out of the northern alternative, it’s clear why the mayor’s not listening.

“With all due respect to North Charleston, it’s a state issue,” says McWhorter.

Norfolk Southern Marketing Manager Augie Eckhardt asked what right Summey had to be parochial.

The proposed Noisette development itself could be a hindrance. Eckhardt “applauds” CSX for the plans to pull up tracks through the residential areas of North Charleston.

“We think it’s a great idea to get out of the neighborhoods,” he says.

But Summey’s vision would have homes and businesses essentially surrounding a portion of the proposed northern rail line.

Summey says that any attempt to impose northern rail access “will end up in litigation.”

“My role as mayor is to protect my citizenry,” Summey says. “They think they can come in and destroy everything we’ve worked for.”

If Norfolk Southern is given access north of the site, its likely that most all of its trains will head through the Noisette development.

Norfolk Southern will now take the fight to legislators in Columbia and Washington, other industries, and community leaders.

“The stakeholders should know there’s an alternative.”

The company is also on a tight rope — suggesting that clients could move elsewhere, including BMW, while also stating Norfolk Southern is committed to Charleston.

“We wouldn’t be here today if we didn’t want to stay in this port,” Eckhardt says.