In their ongoing efforts to purchase about 60.8 acres containing a Colelbrookdale rail spur, the Berks County Commissioners have sought new appraisals of the line, rebuffing the current owner's asking price of $2,323,400.The county, instead, has offered $500,000 for purchase of the line, which the commissioners believe is closer to the property's true value. East Penn Lines Inc., owners of the rail spur, continue to assert it is worth far more.
In papers recently filed with Surface Transportation Board in Washington, D.C., commissioners Mark C. Scott, Christian Y. Leinbach and Kevin S. Barnhardt submitted an appraisal report in support of what they believe to be the actual net worth of the Colebrookdale spur. The commissioners are seeking to acquire the rail line for continued use by businesses within Berks County.
East Penn filed an immediate reply to the county's appraisal, addending a report from the company's own appraisal expert.
The county's appraisal, prepared by Matthew R. Cremers of Pottstown, details the value of the 12 parcels of land associated with the rail line which are located in Douglass-Berks and Douglass-Montgomery townships.
East Penn Lines, Inc. is seeking approval at the federal level to abandon the line. East Penn wants to sell the rail for scrap and put all acreage associated with the line up for sale.
The line is currently used most regularly by Drug Plastics & Glass Inc., of Boyertown.
In addition to the county's appraisal efforts, a recent detailed title search and legal assessment was undertaken with the assistance of Roland & Schlegel law firm, Reading. The letter detailing the assessment was given to the commissioners before their Dec. 30 meeting.
The Roland & Schlegel letter indicated that a search through previous case law had determined that all acreage previously deeded to any railroad for use by a rail line reverts back to the original owner if the railroad is abandoned. Scott asserted this new argument gives the county's position greater weight.
Scott said that it now appears that if East Penn chooses to abandon the rail line, the company's claims to acreage associated with the line are actually far less than original estimates since much of the land would ultimately revert back to the original owner or successors in title.
Scott estimates that under this new assumption, the land owned by East Penn is actually 12 percent of the company's original estimates.
According to Scott, discovery of this case law provides yet another reason to prevent abandonment of the line. He maintains the line should be sold to the county for its ongoing use.
"The problem for the people who will receive this land if the railroad is successfully abandoned is that they will become the owners of various nuisance structures," Scott said.
He added that this could pose for local municipalities numerous financial obligations as well as force homeowners to obtain homeowners insurance to protect themselves against possible liability.
"All of the railroad crossings that are on public roadways will eventually have to be torn up unless the Service Transportation Board insists that the railroad tears them up. If the railroad doesn't tear them up, they will leave them to the municipalities" at great financial obligation, Scott said.
"If the abandonment is successful, the railroad [East Penn] may walk away with some money in its pocket, but the public will be picking up the tab and the homeowners will be putting out money there they did not foresee," he added.
In East Penn's original filing to request abandonment of the line dated July 31, 2008, the company cited several reasons for its decision, foremost of which was a perceived lack of profit potential.
The document states that "after a costly repair in 2004 in which the line was taken out of service for nearly six months, it has been unable to develop any new rail traffic moving to or from the line and the revenues generated by the two users [Drug Plastics, Inc. and Cabot Corporation] have been woefully inadequate to cover the cost of operations.
"In fact, the total freight revenues received since April 2005 do not even cover the cost of repairing the bridge and the ensuing litigation," the filings add.
The filings of Dec. 29 highlight the major discrepancies between the parties in terms of the assessed value of the parcels.
The Surface Transportation Board, the body responsible for the decision of whether or not to abandon the rail line, is a regulatory agency that Congress charged with the process of resolving railroad disputes and reviewing proposed mergers. While the board is an independent body, it is administratively affiliated with the Department of Transportation.
The board is expected to make a decision regarding abandonment of the rail line sometime in 2009.