Railroad

Horry County Council chairman Mark Lazarus said the deal to purchase the Carolina Southern Railroad should be ready to present to the Horry County Council at their next meeting.

Lazarus told the Myrtle Beach Regional Economic Development executive board Wednesday that most of the details of the agreement have been ironed out and should be ready for the council’s perusal on Oct. 7.

Former EDC chairman Doug Wendel said intense negotiations with the Pippins, owners of the railroad, have taken a positive turn and the railroad purchase should be ready to close by the end of the year.

Wendel co-chairs an interstate committee set up to buy the railroad that has been shut since 2011.

The rail line runs from Conway to Chadbourn, North Carolina then back to Mullins. The company also leases 14 miles of track that runs from Conway to Myrtle Beach.

Speaking to the Horry Industrial Alliance Monday, Wendel said officials in both Horry County and Columbus County in North Carolina were afraid the tracks would be pulled up which would hamper economic development in both counties.

Wendel said Carolina Southern was warned in 2010 that many of its bridges were in need of repair and finally the federal government ordered the company to cease operations in May of 2011 until the repairs could be completed.

The cost to upgrade the 30 bridges in question would be at least $2 million, Wendel said.

“The Pippins embargoed themselves for 12 months to make the repairs,” he said. “Then, they embargoed another 12 months trying to find the money for the project.”

He added that Santee Cooper’s closing of its Conway Grainger plant knocked out about a third of the rail line’s traffic which further added to the financial woes of the company.

It was after the second embargo that the local governments became very concerned that the railroad may go away. Wendel said Horry County twice supported grant applications for $12 million but both times were denied.

“That’s when Dennis Worley from North Carolina planned a meeting in Loris to try to pull together a committee to save the railroad,” Wendel said. “He asked me to chair the committee and I said I would if he would be the co-chair.”

In addition to the cost of repairing the bridges, Wendel said it would require another $20 million to get the railroad upgraded to be able to handle traffic at 25 miles per hour which is necessary for most commercial rail customers.

The committee hired a lawyer from Chicago to work out the details of getting to the federal Surface Transportation Board. That body could force a rail company to improve its operations or completely abandon the system.

The state got an appraisal for the rail line that came back at $18 million, Wendel said.

“Pippin (owner Ken) wanted to sell for $22 million,” Wendel said. “We knew we had some tough negotiations ahead of us.”

The state of North Carolina gave the committee funding to order a more detailed appraisal that Wendel said came back lower than the original.

In the meantime, the Pippins agreed to a voluntary abandonment this past May.

Wendel said though the negotiations have been heated at times, he wanted to publicly thank Mr. Pippin for his cooperation in working out an agreement for the purchase.

Jason Pippin, Carolina Southern vice president and general manager, concurred that negotiations have progressed well the last week or so and should be finalized very soon.

“We just want what’s best for everybody concerned,” Pippin said. “This has been our baby for a lot of years and we’re hoping that the group finds a qualified, reputable operator to take over the railroad and make it prosper.”

Wendel said one of the operators the committee is considering takes economic development very seriously and encourages companies to locate along the line which is great for the local economy.

In fact, he added, they encourage agricultural development that could go hand-in-hand with the county’s plan to develop a large food hub for local farmers.

Lazarus said because they are major sources for the proposed deal, nothing would be finalized without the approval of the councils from Horry County and Columbus County.

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