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North Coast rail dispute intensifies with competing bids from Skunk Train and coal export company

A mysterious Wyoming-based firm believed to be pushing a controversial coal-by-rail export proposal along the Northern California coast has made a new filing with a powerful federal board to advance its bid to seize control over the defunct lines running between Willits and Eureka.

The June 1 filing indicated the so-named North Coast Railroad Company, which wants to ship Rocky Mountain coal out of the port at Humboldt Bay, had at least $15 million in the bank — enough to clear an initial federal hurdle in which a company must prove it can cover the cost of a line’s scrap steel and two years of maintenance.

But that company is not the only entity vying for control of abandoned track running through Mendocino and Humboldt counties — along a right of way state lawmakers hope will one day welcome a 320-mile multiuse trail stretching south to San Francisco Bay.

In an unrelated venture, Mendocino Railway, owners of the tourist excursion Skunk Train, are petitioning the federal rail board to restore 11 miles of track north of Willits to run loads of gravel. Mendocino Railway also filed with the board indicating it had the resources to take on that project.

Either bid could complicate the more broadly-supported venture: the proposed Great Redwood Trail, a recreational route planned from Eureka in the north to Larkspur in Marin County on the south. A state agency has already begun planning the conversion of abandoned segments of the rail line in Mendocino and Humboldt counties for the trail.

The three competing ventures must now vie for the endorsement of the U.S. Transportation Board, a body that aims to preserve the nation’s rail corridors but has proven amenable to allowing recreational trails along disused rights of way.

The two commercial ventures made their filings after the federal board last month rejected attempts by Rep. Jared Huffman, state Sen. Mike McGuire and local elected officials up and down the rail line to convince the board to block the coal company’s takeover bid entirely and reserve the rail line for the trail project.

Huffman, D-San Rafael, noted the coal company’s filing came two days after a federal deadline.

“Their late application should disqualify them for further consideration. If not, the coalition of community opposition and their lack of transparency certainly will,” Huffman said Thursday.

Great Redwood Trail advocates would ask the board to disqualify the company’s application because it was late, McGuire said in a Friday interview.

City councils and county boards of supervisors along the North Coast have passed resolutions opposing any coal shipments and supporting the Great Redwood Trail.

North Coast Railroad Company’s filing did not shed any more light on its plans were it to gain control of the line. But early filings with the federal board and connections to a Utah government agency and the coal-rich Crow Tribe in Eastern Montana indicated the company hopes to ship coal from the Powder River Basin in Montana and Wyoming for export out of Humboldt Bay.

Still, the company’s reported bank balance is far short of the more than $2 billion officials estimate is necessary to restore abandoned sections of track in Mendocino and Humboldt counties.

The company at this stage is only required to prove it has financial resources equivalent to the scrap price of the steel along the line and maintenance costs using a federal formula of $4,000 per mile of railroad per year, according to its filing.

In its filing, an attorney representing the company stated North Coast Railroad Company intends to take over around 176 miles of railroad line between Willits and Eureka. The total initial financial burden the company must carry therefore comes to $8.8 million, according to the filing.

The company attached a bank statement from a North Carolina branch of the federal credit union Self-Help indicating an account balance of $15.7 million.

Little is known about who is behind the coal-shipping proposal other than that it was pushed in the Eureka area by a consultant named Justin Wight.

Neither Wight or the company’s Chicago-based attorney, Robert Wimbish, have spoken publicly about North Coast Railroad Company’s intentions. Wimbish did not respond to a voicemail on Wednesday

Wyoming is known for loose requirements on business filings and is often used to register corporations with hidden ownership. Documents obtained by the Salt Lake Tribune in Utah indicated there was at least initial interest by Utah state officials and leaders of the Crow Tribe, whose Montana reservation is home to large deposits of Powder River Basin coal. In those records, a Utah official stated that Wight was pursuing a $1 billion loan from the U.S. Department of Transportation.

But after news of the coal proposal broke, organizations and some officials that appeared to offer at least initial support distanced themselves, including the Utah Port Authority.

The Mendocino Railway’s bid, meanwhile, comes as the company best known for whisking tourists through coast redwood forests expands its footprint. Over vehement local opposition, it recently acquired the sprawling former Georgia-Pacific lumber mill site that dominates Fort Bragg’s coastline.

Mendocino Railway has also applied for a $21.5 million federal transportation loan to restore a different set of track, running from its western depot at Fort Bragg to Willits, along the Highway 101 corridor and main north-south rail line. The loan would allow work on 27 bridges, refurbishing a tunnel and replacing ties and rails to allow for both passenger and freight service along the east-west branch.

In an interview, Mendocino Railway president Robert Pinoli said the bid with the surface transportation board was its own venture, designed to provide freight service to a single gravel company that today ships its product via trucks. Each rail car can handle the freight of four truck loads, Pinoli said, creating the opportunity for train lengths of cars to take a large number of trucks off Highway 101.

Pinoli believes his company’s short freight line and the Great Redwood Trail can run alongside each other, he said.

“We have no intention of derailing the plan to have a trail,” Pinoli said.

Coal company officials have never contacted him and have made no serious outreach to his company, Pinoli said.

“I’ve been railroading for 30 years and I don’t know who these people are,” he said.

Pinoli believes a cooperative effort between McGuire, who has championed the trail in Sacramento and his North Coast district, and the Mendocino Railway could aid efforts to stop the coal train.

McGuire, a Healdsburg Democrat and the Senate majority leader, has not been receptive, he said.

“He hasn’t taken (outreach) seriously,” Pinoli said, and “doesn’t want to engage with us in that sort of a partnership, but I think we’ll get there.”

McGuire said he and his staff members will continue to meet with Pinoli about the railroad project but he expressed skepticism that Mendocino Railway had the resources to repair the track.

“For 25 years freight operators had the opportunity to run on this line and literally not one freight train operator stepped up to do so,” he said.

Pinoli and McGuire disagreed significantly over the cost of restoring the 11 miles, with McGuire suggesting a cost of “tens of millions of dollars” and Pinoli estimating the work could be done for roughly $10 million.

Meanwhile, converting a rail bed to a dirt or gravel bicycle and hiking trail is also significantly cheaper than “rail with trail,” the senator said. Trail proponents estimate that converting the existing rail bed to trail would cost between $12,000 and $15,000 per mile on that stretch. Grading a new trail alongside a working railroad could cost 30% to 50% more, McGuire said.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. On Twitter @AndrewGraham88

Andrew Graham

Business enterprise and investigations, The Press Democrat 

I dig into businesses, utility companies and nonprofits to learn how their actions, or inactions, impact the lives of North Bay residents. I’m looking to dive deep into public utilities, labor struggles and real estate deals. I try to approach my work with the journalism axioms of giving voice to the voiceless, comforting the afflicted and afflicting the comfortable in mind.

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