A division of the state Department of Commerce may wind up buying the embattled Carolina Southern Railroad, local leaders said.
But getting all the parties involved to agree on a price could prove difficult.
“The preferred approach is try to have a private purchaser step up and start buying railway,” said Doug Wendel, who is chairing a two-state committee that’s trying to get the railroad operating again. “Obviously, if that doesn’t occur, you’ve got to look at another option. That could be the state. It could be a [combination] of jurisdictions. But until you really put your finger on values or negotiate a reasonable value that makes some sense, it’s extremely difficult to kind of piece that puzzle together.”
Palmetto Railways is part of the state Department of Commerce and it manages three railroads in the Charleston area. The division was set up in 1969 and its website says the branch “promotes the economic viability of the State of South Carolina by providing safe, efficient and cost-effective rail solutions to facilitate the movement of freight and to support economic development efforts.”
When asked if the state was interested in buying the Carolina Southern, Department of Commerce spokeswoman Allison Skipper confirmed via email that Palmetto Railways has been in discussions about the local railroad.
She declined to comment further.
The Carolina Southern, which serves northeastern South Carolina and southeastern North Carolina, has been mostly shut down for three years. After federal officials implemented new standards for bridges in 2011, the railroad’s owners said they didn’t have the money to bring some of their bridges up to code and voluntarily shut down most their rail service.
After years of no progress, Horry County Council and two North Carolina governments pressed the issue last summer and paid a Chicago attorney to file their concerns with the federal Surface Transportation Board. The STB could force the railroad’s owners to either get the Conway-based railroad operating again or sell it to a group that can.
Wendel said the STB process could drag on until 2016, but local and state officials hope to resolve the matter sooner than that.
About 800 Horry County workers are employed by companies that use the railroad and 3,600 jobs are connected to those businesses, according to a Coastal Carolina University study. The annual state and local tax revenue from jobs related to rail access is $12.32 million.
The Carolina Southern is part of the Carolina Rails system. Its connections run from Whiteville, N.C., to Mullins and from Chadbourn, N.C., to Conway. The railroad includes more than 95 miles of track and 187 bridges.
Ken Pippin, whose family owns the railroad, said the Carolina Southern’s future is now in the interstate committee’s hands.
Pippin said he would be willing to sell the railroad to the state, but he hasn’t received an offer from Palmetto Railways.
An appraisal of the railroad was done last May, though Pippin didn’t say how much the property is worth.
“We have been patient with the committee and the state on this matter,” he said. “My ultimate goal is to make sure the three counties affected by the railroad have it up and running again. There are five bridges that are in need of repair and with the state involved, they could tap into more resources than we can.”
Two weeks ago, local officials met with state lawmakers to discuss what state money might be available to purchase the railroad.
“They were trying to figure out if they went that route would we be in a position to help in any way,” said state Rep. Nelson Hardwick, R-Surfside Beach. “Of course, we’d help in any way we could.”
If the state is interested in buying the railroad, Hardwick said, the money must be on hand during a specific point in the STB case.
“When you get to the end of that process, you’ve got to step up with the money,” he said. “You can’t be dilly-dallying around. You can’t put an offer on the table and not be able to respond.”
One of the hold-ups now is that the interstate rail committee members want their own appraisal of the railroad, said Horry County Council Chairman Mark Lazarus.
“We’re really just trying to figure out the value of it,” he said. “We’re just trying to plan a strategy.”