Title: Railroad Right-of-Way Acquisition

Phase(s): Pre-Preliminary Engineering

Category: Management

Date: March 2, 1998

1. Background

The Utah Transit Authority (UTA) is constructing a Light Rail Transit (TRAX) project running from a southern terminus at 10000 South in the City of Sandy northerly within the existing Union Pacific Company (UP) railroad right-of-way to 1300 South in Salt Lake City. At that point TRAX will share Salt Lake City streets and will terminate at the Delta Center on South Temple Street. The railroad ROW currently contains single and double track segments with a large storage yard located along the ROW in the City of Murray.

TRAX will operate at 10 minute, 20 minute and 30 minute headways depending on the time of day. The hours of operation will begin at 5:00 a.m. and conclude at 12:00 a.m. In the dedicated rail corridor, TRAX will share a track with Salt Lake City Southern Railroad (SLCSRR), a shortline freight operation. The passenger and freight service will be timed separately, with freight activities occurring only in the hours when TRAX is out of operation. The maximum running speed of the Light Rail Vehicles (LRVs) will be 55 miles per hour. Existing bridges and structural culverts that the TRAX tracks pass over will be repaired and retrofitted to accommodate TRAX and freight loadings as well as meet current seismic requirements.

In the summer of 1984 the governor of Utah set in motion the development of a long-range transit plan for the Wasatch Front (Salt Lake Valley, Utah). During the 1984 to 1986 time frame transit planners investigated the use of the Union Pacific Company (UP) railroad corridor for transit in the I-15/State Street alternative analysis study. During 1987 there were a number of actions regarding the possible purchase or lease and shared use of the UP ROW for transit purposes.

During the period from mid 1988 to mid 1990, meetings, discussions and reviews were held addressing major issues concerning use, operations, title, environmental conditions, freight customers, tracking rights, and freight/passenger rail options. In August 1990, an initial draft of a terms and conditions proposal for acquisition was prepared by UTA. Additional drafts were prepared during 1990, along with reviews of freight/passenger operations, ICC issues, and passenger service compatibility. In the first half of 1991, reviews of operating plan options for shippers, UTA track plans, financial issues and operations were addressed which lead to a further refinement of the terms and conditions in mid 1991.

During 1992, acquisition activities were undertaken which included overhead tracking rights, hazardous waste consideration, meetings with shippers, and title and process issues necessary to resolve the acquisition of the right-of-way. These actions culminated with the refinement of options related to environmental conditions, title search and other issues needed to develop acquisition documents, a request for letter of no prejudice, and UTA Board Approval to proceed. In the August to November 1992 time frame, meetings were conducted with the Federal Railroad Administration (FRA) and Federal Transit Administration (FTA) to review the acquisition agreement.

In March of 1993, the UTA acquired approximately 25 miles of railroad Right-of-Way from the UP. The acquisition process took almost nine years to complete.

At time of purchase, UP reserved a freight operating easement on subsidiary of Rail Tex. UP contracted with a short-line railroad; the Salt Lake City Southern Railroad that would operate on the Right-of-Way purchased by UTA to provide local service to the railroad freight customers. UTA entered into a coordination agreement with the short-line railroad to provide for administration of the short-line's operation on the UTA owned Right-of-Way. This was executed because the freight customers had rights to common carrier service. However, UTA desired to avoid coming under the jurisdiction of the ICC, and this was part of the mechanism which UTA used in avoiding becoming a railroad. This strategy also supports the objective that the UTA should avoid becoming a railroad under railroad labor law. This was thought to have important implications of labor management, including employee liability entitlement. The instrument of conveyance of the property was a Special Warranty Deed and Quit Claim Deed.

The manner in which the Right-of-Way was acquired by UTA is of particular importance. The UTA does not, of itself, have the right of eminent domain. As a result, UTA has great difficulty in acquiring real estate abutting the Right-of-Way where owners did not want to sell out at prices reflecting fair market value. However, UTA's ownership and control of the Right-of-Way has eliminated the potential for additional difficulties in acquiring a major portion of the property needed for the light rail project.

2. The Lesson

The UTA experience in the purchase of the UP ROW for light rail operations provides several good lessons in the acquisition of railroad property.

First and foremost, the UTA started the acquisition process early. As soon as they identified the ROW requirements they began discussions with the UP. In view of their experience of almost nine years of negotiations the need to have the ROW acquired is essential to avoid project delays and increased project cost. The UTA was successful in acquiring the ROW before the FFGA was signed.

Because UTA permitted the railroad to reserve to itself a freight operating easement, it avoided being under the jurisdiction of the ICC and other related freight railroad regulatory agencies. This strategy kept UTA from being considered a railroad and subject to railroad labor laws.

Rights for the operating agreement were included as part of the purchase and sale agreement. This agreement provided UTA with complete control over the operation and maintenance of the railroad ROW.

3. Applicability

The lesson has applies to Grantees with projects utilizing railroad ROW, particularly where the Grantee does not have condemnation authority.

4. References

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