IDA to extend lease agreement with NYS&W Railway
NORWICH – The Chenango County Industrial Development Agency is planning to extend its lease agreement with the New York Susquehanna & Western Railway for another year.
The IDA owns title to the portion of the right-of-way that passes through Chenango County and leases it back to the Cooperstown-based railroad. The NYS&W, in turn, is exempt from paying real property taxes. The arrangement was made back in the 1980s as a way to preserve local rail service.
The current lease expires on April 27, and is part of a Payment In Lieu of Taxes, or PILOT, that has been in effect since 2002.
The IDA must renew the lease in order to contract for a $770,000 New York State Department of Transportation grant it was approved for late last year. The grant would go toward revitalizing the portion of the line that used to connect Prentice Street in Norwich to the town of Sherburne. That 12-mile stretch was part of a 40-mile line from Chenango Forks that the railroad planned to abandon in 2006 due to underutilization. It was subsequently damaged in the 100-year flood in June of that year, halting service ever since.
The railroad currently comes up from New Jersey to Binghamton, goes through to Syracuse, over to Utica and makes runs from Utica to Sherburne and back.
Since then, county officials have repeatedly contacted NYS&W officials and state legislators to stress the importance of rail transportation to Norwich in order for the economy to develop throughout Chenango County. In a continuing effort to restore local rail service, they applied for and won the NYSDOT grant.
It is unclear when the work will begin. The DOT and IDA are currently in the contracting phase. Railroad officials have estimated the repair and upgrade to that portion of it line would cost approximately $400,000. The cross tie-replacement component would permit trains to operate at 25 mph, more than double the current allowable maximum speed of 10 mph.
Commerce Chenango Economic Development Director Jennifer Tavares said the IDA needs the railroad to make it all work, as they would be responsible for 10 percent of the total project cost. The IDA’s legal counsel confirmed that the Chenango agency, itself, is prohibited from operating a railroad.
Melanie Boyer, NYS&W Railway spokesperson, confirmed that the railroad would be responsible for the match and said the two entities – the IDA and the railroad – have a strong working relationship.
“We hope that it continues for a long time,” she said.
Lines of communication are also open between the railroad and Chenango County businesses such as Tecnofil, S.A. in Sherburne and Chobani, Inc. Boyer said the railroad would be happy to work with both companies, and that both would make good customers.
“The railroad has inspected Tecnofil siding behind their plant and identified rehabilitation that needs to be done. They are working with a contractor to give them an estimate. Our hope is that they order rail cars from their suppliers,” she said.
Having the line continue down to Norwich would be the only way to bring in resin beads at Woods Corners for Chobani, Tavares said during a recent meeting of the IDA. The company may decide to manufacture yogurt containers from its corporate offices in Norwich.
Commerce Chenango President Steve Craig suggested adding a railroad spur at Earl B. Clark business park in North Norwich. He has encouraged members of the county’s Board of Supervisors to use their imaginations to consider the economic opportunities presented by rail transportation. “Maybe an agricultural or natural gas company might be interested in Clark Park,” he said.
In the meantime, the IDA is currently hunting down additional funding opportunities for the rehabilitation project. Application has been made for New York State Department of Labor work crews. Tavares estimates it will cost approximately $200,000 just to clean up the tracks.
After the flood halted service, Chenango County allocated $20,000 to commission a consultant who evaluated the viability of a number of different options for the rail corridor. According to the analysis, rail delivery of feeds and fertilizer would significantly lower costs for Chenango County’s agriculture industry. Existing businesses in other industries could take advantage of rail transport’s economies. And direct rail service would increase the viability of vacant industrial sites in North Norwich, Norwich, Brisben, and Greene, with the accompanying potential for job creation. Including rail delivery of sand, pipe, and other supplies for the natural gas industry, demand by all users could exceed 1,000 cars per year, the study said.
According to Tavares, in 2010, the NYS&W PILOT with the IDA exempted it from paying approximately $68,106 in town, county, local and school taxes. Figures have not been released for 2011. Chenango County lawmakers have further endorsed the railroad for federal and state funding packages through the years.
The IDA owns title to the portion of the right-of-way that passes through Chenango County and leases it back to the Cooperstown-based railroad. The NYS&W, in turn, is exempt from paying real property taxes. The arrangement was made back in the 1980s as a way to preserve local rail service.
The current lease expires on April 27, and is part of a Payment In Lieu of Taxes, or PILOT, that has been in effect since 2002.
The IDA must renew the lease in order to contract for a $770,000 New York State Department of Transportation grant it was approved for late last year. The grant would go toward revitalizing the portion of the line that used to connect Prentice Street in Norwich to the town of Sherburne. That 12-mile stretch was part of a 40-mile line from Chenango Forks that the railroad planned to abandon in 2006 due to underutilization. It was subsequently damaged in the 100-year flood in June of that year, halting service ever since.
The railroad currently comes up from New Jersey to Binghamton, goes through to Syracuse, over to Utica and makes runs from Utica to Sherburne and back.
Since then, county officials have repeatedly contacted NYS&W officials and state legislators to stress the importance of rail transportation to Norwich in order for the economy to develop throughout Chenango County. In a continuing effort to restore local rail service, they applied for and won the NYSDOT grant.
It is unclear when the work will begin. The DOT and IDA are currently in the contracting phase. Railroad officials have estimated the repair and upgrade to that portion of it line would cost approximately $400,000. The cross tie-replacement component would permit trains to operate at 25 mph, more than double the current allowable maximum speed of 10 mph.
Commerce Chenango Economic Development Director Jennifer Tavares said the IDA needs the railroad to make it all work, as they would be responsible for 10 percent of the total project cost. The IDA’s legal counsel confirmed that the Chenango agency, itself, is prohibited from operating a railroad.
Melanie Boyer, NYS&W Railway spokesperson, confirmed that the railroad would be responsible for the match and said the two entities – the IDA and the railroad – have a strong working relationship.
“We hope that it continues for a long time,” she said.
Lines of communication are also open between the railroad and Chenango County businesses such as Tecnofil, S.A. in Sherburne and Chobani, Inc. Boyer said the railroad would be happy to work with both companies, and that both would make good customers.
“The railroad has inspected Tecnofil siding behind their plant and identified rehabilitation that needs to be done. They are working with a contractor to give them an estimate. Our hope is that they order rail cars from their suppliers,” she said.
Having the line continue down to Norwich would be the only way to bring in resin beads at Woods Corners for Chobani, Tavares said during a recent meeting of the IDA. The company may decide to manufacture yogurt containers from its corporate offices in Norwich.
Commerce Chenango President Steve Craig suggested adding a railroad spur at Earl B. Clark business park in North Norwich. He has encouraged members of the county’s Board of Supervisors to use their imaginations to consider the economic opportunities presented by rail transportation. “Maybe an agricultural or natural gas company might be interested in Clark Park,” he said.
In the meantime, the IDA is currently hunting down additional funding opportunities for the rehabilitation project. Application has been made for New York State Department of Labor work crews. Tavares estimates it will cost approximately $200,000 just to clean up the tracks.
After the flood halted service, Chenango County allocated $20,000 to commission a consultant who evaluated the viability of a number of different options for the rail corridor. According to the analysis, rail delivery of feeds and fertilizer would significantly lower costs for Chenango County’s agriculture industry. Existing businesses in other industries could take advantage of rail transport’s economies. And direct rail service would increase the viability of vacant industrial sites in North Norwich, Norwich, Brisben, and Greene, with the accompanying potential for job creation. Including rail delivery of sand, pipe, and other supplies for the natural gas industry, demand by all users could exceed 1,000 cars per year, the study said.
According to Tavares, in 2010, the NYS&W PILOT with the IDA exempted it from paying approximately $68,106 in town, county, local and school taxes. Figures have not been released for 2011. Chenango County lawmakers have further endorsed the railroad for federal and state funding packages through the years.
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