Cincinnati voters are to decide in November whether the city can sell a city-owned rail line for over $1.6 billion to Norfolk Southern, the same company that caused the toxic disaster in East Palestine earlier this year.
The Cincinnati Southern Railway Board of Trustees unanimously voted to place the proposed sale of the rail line on the November 7th ballot.
If approved by a majority of voters, Norfolk Southern Railway would pay $1.62 billion to buy the only interstate rail line owned by a municipality in the country. The proceeds from the sale would be put into a trust fund, which would pay out money annually for city infrastructure initiatives.
The city constructed the train lines in the late 1800s to promote economic growth. Since then, train companies have been leasing it from Cincinnati.
Cincinnati is the only municipality in the U.S. to own an interstate railroad. Norfolk Southern has leased it since 1981.
Presently, Norfolk Southern is responsible for paying Cincinnati around $25 million a year for the lease. That deal expires in 2026, leading city and railroad officials to negotiate the outright sale of the asset.
The sale and establishment of a trust fund, as opposed to a continuing lease, “will likely more than double” possible returns, according to a statement from the trustees. According to the statement, 2024 leasing proceeds are anticipated to be $26.5 million, while the trust fund is expected to have $56 million available.
Following a hazardous train disaster in East Palestine, council members have raised concerns regarding the sale to Norfolk Southern. The state is currently suing the company to ensure it pays for the cleanup and environmental damage caused by the derailment. Earlier this year, another Norfolk Southern train also derailed in Springfield, and a Norfolk Southern conductor died due to a train collision with a dump truck in Cleveland.
Liz Keating, the only Republican on the city council questioned if the city should halt the sale in the wake of the incident.
“Given the issues going on in East Palestine, is the sale, the purchase of this railroad, still a top priority? Does (Norfolk Southern) have all the resources available to continue on with this sale?” Keating said.
Democratic council member Mark Jeffreys has also been vocal with questions about the sale, saying he wants more information about the deal before endorsing it.
“We need to make sure that it’s safe, whether it’s sold or it’s leased,” Jefferys said.
Aftab Pureval, the mayor of Cincinnati, said that he wants the agreement to go through despite the incident and chemical spills.
“My concern is for the best deal for the city, the safety of our residents and future generations of residents who are going to benefit from this sale,” Pureval said.
Cincinnati City Council must approve the ballot language by August 9th and send it to the Hamilton County Board of Elections in order for the sale to appear on the November ballot.
The federal Surface Transportation Board must also approve the transaction before it can go forward. The Surface Transportation Board determines whether the sale will have any “anticompetitive effects.”
Anyone in opposition had until June 30th to submit comments, protests, and any other evidence; Norfolk Southern now has until July 28th to respond. The Surface Transportation Board will make a final decision by September 11th.
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Hannah Poling is a lead reporter at The Ohio Star, The Star News Network, and The Arizona Sun Times. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected].
Photo “Train” by Cincinnati Southern Railway.
