Engineer Eric Sprague was part of a crew that checked Northwest Pacific Railroad tracks for flaws in Sonoma, Thursday June 23, 2011. (Kent Porter / Press Democrat) 2011

North Bay businesses await return of freight trains

Freight trains hauled cargo on the Northwestern Pacific Railroad for nearly 100 years, in good times and bad.

After a 10-year absence, trains could return this summer to Sonoma, Marin and Napa counties. Will shippers be there to greet them?

That's the question as railroad operator NWP Co. gears up to provide service on a 62-mile stretch of track between Napa County and Windsor.

While some North Bay companies say they want to use rail, critics question whether there's enough business to support the train.

John Williams, a 45-year railroad veteran and NWP's president, said he's convinced there's a market.

"We're expecting to be profitable," said Williams, who has worked for Southern Pacific and Conrail.

So far, NWP has invested more than $5 million in the project.

Williams predicts the railroad will haul 2,000 to 2,500 carloads a year by the end of its second full year, putting NWP in the black. It will cost shippers less to use rail than trucks, especially for longer hauls, he said.

Still, the railroad company doesn't have a contract with a single shipper yet. He can't sign them up until trains are rolling, Williams said.

"Our problem is convincing people we're here," Williams said. Freight service has been delayed for years by litigation, environmental studies and track repairs.

But there's plenty of interest from shippers, he said, including feed and grain dealers, wood products manufacturers, wineries and aggregate companies.

One of them is Arnie Riebli, an owner of Petaluma egg producer Sunrise Farms. "We've been waiting for this for five years," said Riebli. "Rail freight is much more economical than trucking."

Petaluma dairy and egg producers import tons of feed every month from the Midwest and Canada, he said. It comes by rail to Napa or Turlock and gets off-loaded to trucks for the trip to Petaluma.

"If the train is running, one of the first loads coming in will be grain," said Riebli, who also manages Dairymen's Feed and Supply, a Petaluma cooperative that sells feed to farmers.

Korbel Champagne Cellars in Guerneville also wants to use the train, said Bill Owens, the winery's assistant vice president for production.

About two-thirds of Korbel's champagne already is shipped by rail, but it first goes by truck to a railhead in Oakland, Owens said.

"If it came to Sonoma County, it would make sense to use the train instead of spending that travel time to Oakland," he said. Korbel ships about 1.4 million cases of sparkling wine each year, much of it to markets east of the Rockies.

Korbel has a distribution facility near the railroad in Santa Rosa's Airport Business Center, but would need its own spur for the train, Owens said.

Alexander Valley Cellars, a wine storage and shipping company in the business center, also is interested in rail. The company ships about 1.5 million cases a year for 250 wineries. Rail would help it stay competitive, said Meritt Dahlgren, co-owner of the business.

"You can load a lot more wine on a rail car than a semi-trailer," Dahlgren said.

Standard Structures, a Windsor firm that manufactures engineered wood beams, trusses and joists, is ready for rail, said president Dick Caletti. It will help the company compete for business in Eastern markets, he said.

Service would start with three round trips per week and trains up to 15 cars long, according to NWP.

But critics doubt there's enough business to sustain the railroad for the long term.

"There isn't a tremendous amount of freight to be hauled," said Bernard Meyers, a Novato attorney who sits on the North Coast Railroad Authority, the public agency that controls the line.

Most of the North Coast sawmills that once shipped lumber on the route now are gone. The authority took over the line in the 1980s after former owner Southern Pacific tried to abandon it, citing high costs and dwindling traffic.

Others on the rail board have high hopes for freight.

"The North Coast will once again be connected by rail to the rest of the country," said chairman Hal Wagenet.

Federal transportation regulators halted trains in 2001 when the line was badly damaged by winter storms.

Over the past four years, the railroad authority spent $68 million in tax money to repair the southernmost stretch of rail. The federal government last month reopened that 62-mile segment, but the rest of the railroad - more than 240 miles between Windsor and Eureka - remains closed, with no firm schedule for repairs.

So far, there's no funding to fix that section, a job that could cost $500 million or more.

The authority selected NWP in 2006 to operate the trains. Once service starts, NWP must pay the authority $25,000 a month to help fund its operations.

In recent weeks, trains have been doing trial runs between Napa Junction and Windsor, testing more than 100 bridges, trestles and signal crossings.

Last week, the rail authority took final steps to resume freight, but it still needs agreement from the city of Novato before service starts.

Novato sued the authority in 2007 to stop the project, and the two sides later agreed to a court settlement that calls for the railroad to reduce noise and emissions in the city.

The rail authority wants to change some terms of the deal, and Novato city leaders are scheduled to consider it July 12.

Freight service could begin later that week if Novato signs off, said Mitch Stogner, the authority's executive director.

Meanwhile, the authority faces threat of legal action from three Humboldt County environmental groups who said it failed to consider impacts of trains.

They promised to sue if the authority resumes freight service without addressing their claims.

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