I don't live in the city limits so I can't vote. If I did, I'd vote "NO". 

This screams of chasing short-term gains over a long-held and valuable asset. 

18 minutes ago, JaceTheAce41 said:

I don't live in the city limits so I can't vote. If I did, I'd vote "NO". 

This screams of chasing short-term gains over a long-held and valuable asset. 

 

 

Look at the quote re: the city's pension fund "earning 11% over the previous decade".  Well it definitely didn't earn money 2008-2010, which was just before the "previous decade" - meanwhile the railroad kept paying like a bond during that same period. 

 

 

 

 

The Enquirer got out of the logic business a long time ago:

I've been a fan of Liz Keating so far this council term, but in the last session they had on the Cincinnati Southern Railroad, she said that the City needs to "diversify its investment portfolio," as a reason the city should sell.  How does it get more diverse than owning a recession-proof source of income, like these tracks?

On 8/11/2023 at 12:10 PM, 10albersa said:

I've been a fan of Liz Keating so far this council term, but in the last session they had on the Cincinnati Southern Railroad, she said that the City needs to "diversify its investment portfolio," as a reason the city should sell.  How does it get more diverse than owning a recession-proof source of income, like these tracks?

The argument is that the investment portfolio will hold stocks in all kinds of different markets across many different sectors which is more diversified than just holding one real estate asset and renting it out. I think it's kind of a red herring, as it ignores how profitable rent seeking is over the long term, especially given that there is essentially no future where another north-south main line gets built east of the Mississippi, but that's the argument they are going with.

Just now, Dev said:

The argument is that the investment portfolio will hold stocks in all kinds of different markets across many different sectors which is more diversified than just holding one real estate asset and renting it out. I think it's kind of a red herring, as it ignores how profitable rent seeking is over the long term, especially given that there is essentially no future where another north-south main line gets built east of the Mississippi, but that's the argument they are going with.

Of course the counter argument to this is that "no one can predict the future" and we don't know if/when technology will make freight rail obsolete, thus the city needs to diversify its investment...which is an extremely silly argument. 

Cincinnati Railway Board settles lawsuits by former state Rep. Tom Brinkman Jr.

By Chris Wetterich – Staff reporter and columnist, Cincinnati Business Courier

Aug 16, 2023

 

The Cincinnati Southern Railway trustees voted to settle two lawsuits related to its proposed $1.6 billion sale of the city-owned railroad to Norfolk Southern Railway Co.

 

Former state Rep. Tom Brinkman Jr. and his attorney, Curt Hartman, are suing the trustees claiming Open Meetings Act and open records law violations. Under the settlement agreements, if the judges in the cases approve it, Brinkman will get $500, while Hartman will get $100,000 in attorneys fees.

 

“There are many things about this we don’t like,” Charlie Luken, the former mayor and railway trustee, said on Tuesday, Aug. 15. “What this does is clear the decks for us. It allows us to get on with the important business, which is getting this issue passed by the voters. I think it’s a distasteful but fair resolution.”

 

MORE

On 8/11/2023 at 12:10 PM, 10albersa said:

I've been a fan of Liz Keating so far this council term, but in the last session they had on the Cincinnati Southern Railroad, she said that the City needs to "diversify its investment portfolio," as a reason the city should sell.  How does it get more diverse than owning a recession-proof source of income, like these tracks?

 

 

 

As I believe I've pointed out here in the past, US pension funds typically are not allowed to buy land leases or any private-equity (no public) stock.  So we are diversified in an asset class that most public entities or pension funds have no ability to own. 

 

 

 

From an engineering perspective, how many upgrades would be need to be done to the CSR for competitive rail service around and between Cincinnati and Lexington? I know there is zero political willpower for such an option, especially with I-75 right there, but I was curious how unrealistic of an ask it would be.

@Dev In the 80 rail miles from CUT to South Broadway Avenue in Lexington, I count about 37 miles of single track segments that would probably have to have a second main track added/restored. Most of this line is double-tracked already, which is good, and many sections used to have a second track so rail overpasses of roads and rivers are two tracks wide which is also good. There are several rail overpasses/bridges that are one track wide that would have to be rebuilt or replaced with two-track-wide spans. They are the rail overpasses of CSX railroad in Walton, and of Rt 32 in Sadieville. Plus, the Eagle Creek trestle near Sadieville is single-tracked, but its bridge supports, piers and abutments all were built for a second track and 630-foot-long deck which is no longer there.

 

At about $15 million per mile for adding a second main track, including expanding the Positive Train Control traffic management/signal system, universal crossovers (so trains can switch between both tracks) every 10 miles if necessary, road crossings with safety features and lengthened activation circuits to account for higher passenger train speeds, the closing of some crossings and the separation of a few others, and curve elevations (banking) so passenger trains can travel at up to 79 mph around most curves, we're probably looking at about $600 million. That doesn't include stations. In addition to CUT and downtown Lexington, I would put stations in Georgetown, Erlanger and another somewhere in the middle like Williamstown. Five stations at an average cost of about $5 million each adds another $25 million to the total. With engineering, environmental permitting and contingencies, we're probably looking at something in the $700 million to $800 million range.
 

the PAC funded by Norfolk Southern has started advertising a campaign to approve the sale of the railroad.

 

Their primary message is that we can fix roads and parks "with no new taxes". I've seen an ad on local tv and an Instagram ad. It looks like they're going to be really well organized.

https://www.buildingcincinnatisfuture.com/

54 minutes ago, KJP said:

With engineering, environmental permitting and contingencies, we're probably looking at something in the $700 million to $800 million range.

Thanks for the thorough reply. Super helpful as always. Instead of doing this, they are going to spend 5 times as much money to double the capacity of the BSB corridor from 4 to 8 lanes. EDIT: and of course that also helps work towards a potential route to CVG from Erlanger

Edited August 24, 20231 yr by Dev

I don't think rail from Cincy to Lexington makes sense anytime soon unless you get a big subsidy from the Feds. However, I don't like the idea of selling the Cincinnati Southern because it can easily be used for commuter rail in Lexington and it gets you within 1 mile of CVG and could be used for transit in Cincinnati. The fact that NS is so gung-ho on buying the line makes me think they know something and are trying to low-ball the city.

In a Facebook group I am on about the Cincinnati Eastern Railroad (former Norfolk Southern Cincinnati Division/Norfolk & Western) between Cincinnati and Portsmouth:

 

"The out of service portion of the line‘s fate rest in the hands of the voters of the City of Cincinnati. Should they approve the sale of the city owned Cincinnati Southern to Norfolk Southern, the line gets abandoned, removed, and donated to state as a trail. Section 5.08 of the CSR-NS Asset Purchase and Sale Agreement requires NS to abandon line and covert to trail and donate to State (who in turn will turn it over to Scioto County Parks). The City needed a state law change to allow them to sell the Rathole. Certain political interests in Scioto County withheld their support for law change until they got NS to give them the line as a trail. Based on what I seen and heard, I firmly believe if the voters vote down the sale, you better believe NS regroups and gives more political concessions to change the law further to take the voters out of the equation. The bitch of it is that certain officials in counties west of Scioto are warning that the political machine in Scioto County will not be happy with a trail ending in Rarden, and will celebrate their “winning” a free trail by beginning the political and legal wrangling to try to force adverse abandonment of the line as far west as Winchester. Chances of that being successful are slim, but it still something CCET will have to waste resources on fighting. I hate politics."

 

Is this true? Did the City of Cincinnati broker a deal with other legislators to get their support to sell the Cincinnati Southern to Norfolk Southern - including supporting Scioto County's efforts to turn a mothballed line into a rail trail?

1 hour ago, JaceTheAce41 said:

I don't think rail from Cincy to Lexington makes sense anytime soon unless you get a big subsidy from the Feds.

Wouldn't that qualify for the new passenger rail grant program? It probably wouldn't score very well unless they tacked it onto the 3C+D, which Amtrak and Ohio wouldn't want to bother with.

  

19 minutes ago, seicer said:

The bitch of it is that certain officials in counties west of Scioto are warning that the political machine in Scioto County will not be happy with a trail ending in Rarden, and will celebrate their “winning” a free trail by beginning the political and legal wrangling to try to force adverse abandonment of the line as far west as Winchester."

??? They have a customer on the line east of Peebles. That's why it's still active and maintained to that point. There's no way Scioto County has the power to forcibly close a long-term customer and then get NSR to abandon the line. Unless I'm missing something, this is very reactionary fearmongering.

Also, so what? A direct passenger line from Portsmouth to Cincy would be great but it's not going to be on this line. It will always be easier and cheaper to just make improvements to the existing line on the Kentucky side of the river instead.

Any rail right of way abandonment has to be approved by the Surface Transportation Board. If there is still an active rail customer with service, or even one wanting rail service, the rail right of way cannot be abandoned. Railroads are ultimately public utilities which provide a public convenience and necessity and cannot unilaterally disconnect service.

1 hour ago, seicer said:

In a Facebook group I am on about the Cincinnati Eastern Railroad (former Norfolk Southern Cincinnati Division/Norfolk & Western) between Cincinnati and Portsmouth:

 

"The out of service portion of the line‘s fate rest in the hands of the voters of the City of Cincinnati. Should they approve the sale of the city owned Cincinnati Southern to Norfolk Southern, the line gets abandoned, removed, and donated to state as a trail. Section 5.08 of the CSR-NS Asset Purchase and Sale Agreement requires NS to abandon line and covert to trail and donate to State (who in turn will turn it over to Scioto County Parks). The City needed a state law change to allow them to sell the Rathole. Certain political interests in Scioto County withheld their support for law change until they got NS to give them the line as a trail. Based on what I seen and heard, I firmly believe if the voters vote down the sale, you better believe NS regroups and gives more political concessions to change the law further to take the voters out of the equation. The bitch of it is that certain officials in counties west of Scioto are warning that the political machine in Scioto County will not be happy with a trail ending in Rarden, and will celebrate their “winning” a free trail by beginning the political and legal wrangling to try to force adverse abandonment of the line as far west as Winchester. Chances of that being successful are slim, but it still something CCET will have to waste resources on fighting. I hate politics."

 

Is this true? Did the City of Cincinnati broker a deal with other legislators to get their support to sell the Cincinnati Southern to Norfolk Southern - including supporting Scioto County's efforts to turn a mothballed line into a rail trail?

 Cincinnati East Termnial Railroad runs on this line between Cincinnati and Peebles. There's a new Purina plant being built on it. It's not getting abandoned but I think I heard that if the city sells the CS then they get ownership of this line?

1 hour ago, JaceTheAce41 said:

It's not getting abandoned but I think I heard that if the city sells the CS then they get ownership of this line?

I think ODNR would be the new land owner, but only for the section that has been intentionally railbanked and in disuse for many years. NSR will continue to own the rest of the Peavine which is still in operation. OpenRailWayMap makes it clear where this starts and ends.

EDIT: In addition to that, apparently the city asked to buy Clare Yard from NSR when they purchased the Wasson line. They ended up stopping short of the yard in Fairfax, which will probably be used to get WW to Otto Armleder. I have also been told Mariemont has asked about that in the past as well with strong opposition from the rail company. The only way to move that thing, or at least get rights to it, would be to pay them enough money to move it somewhere else which would have to be really, really steep. 

Edited August 24, 20231 yr by Dev

NS may have think they have big money in the game, but a deep-pocketed challenger has appeared.

 

2 hours ago, Dev said:

I think ODNR would be the new land owner, but only for the section that has been intentionally railbanked and in disuse for many years. NSR will continue to own the rest of the Peavine which is still in operation. OpenRailWayMap makes it clear where this starts and ends.

EDIT: In addition to that, apparently the city asked to buy Clare Yard from NSR when they purchased the Wasson line. They ended up stopping short of the yard in Fairfax, which will probably be used to get WW to Otto Armleder. I have also been told Mariemont has asked about that in the past as well with strong opposition from the rail company. The only way to move that thing, or at least get rights to it, would be to pay them enough money to move it somewhere else which would have to be really, really steep. 

 

There isn't really a good alternative to Clare yard unless it's moved across the Little Miami River. With traffic up-ticking on the branch line, it's needed more now than ever.

 

As far as activity, CET has been loading stone from the Plum Run quarry since 2021. It's loading it directly on the ex-mainline instead of reusing the spur track, and I think there is money in the pipeline to build a more permanent solution. CET was storing empty cars on the line to Jaybird Road but I haven't seen cars stored between Plum Run and Jaybird in a while.

 

CET has talked about reopening the rest of the line to Portsmouth if there is traffic to interchange. NS mothballed the line some two decades ago because it could route through Columbus which had no weight/height restrictions and there was little originating traffic east of Winchester. Ford's closing was a huge blow, too. The bridge over the Scioto River at Vera Junction (Portsmouth) also needs structural repairs. (Could also be said NS starved the line of traffic when it closed its Hillsboro branch.)

 

As much as a trail would be great, this line still holds a lot of utility. CCET has demonstrated that it can generate revenue runs on moribund tracks at a profit and can bring industry back to the railroad. Plum Run Quarry had for decades trucked their stone out but now uses rail. Winchester AG resumed and expanded rail access. But Purina has been by far the biggest win for CCET. The tracks are still in good shape except for a washout at McDermott.

Edited August 24, 20231 yr by seicer

4 minutes ago, seicer said:

There isn't really a good alternative to Clare yard unless it's moved across the river. With traffic up-ticking on the branch line, it's needed more now than ever.

I was assuming something along those lines. I'm sure they want to be as close as possible to make things simple, which is why it's there already, and moving across the river could end up being just far enough away to be a pain given how large the flood plain is.

  

4 minutes ago, seicer said:

CET has talked about reopening the rest of the line to Portsmouth if there is traffic to interchange. NS mothballed the line some two decades ago because it could route through Columbus which had no weight/height restrictions and there was little originating traffic east of Winchester. Ford's closing was a huge blow, too. The bridge over the Scioto River at Vera Junction (Portsmouth) also needs structural repairs. (Could also be said NS starved the line of traffic when it closed its Hillsboro branch.)

How much leverage does CET have? If NSR wasn't going to give the dead end of the line away, would they have to eat all the costs of improving the line?

And yeah NSR just giving up on it is what I was assuming as well.

CSR mentioned with some comments mirroring what Ken previously mentioned
 

 

23 hours ago, seicer said:

 

There isn't really a good alternative to Clare yard unless it's moved across the Little Miami River. With traffic up-ticking on the branch line, it's needed more now than ever.

 

As far as activity, CET has been loading stone from the Plum Run quarry since 2021. It's loading it directly on the ex-mainline instead of reusing the spur track, and I think there is money in the pipeline to build a more permanent solution. CET was storing empty cars on the line to Jaybird Road but I haven't seen cars stored between Plum Run and Jaybird in a while.

 

CET has talked about reopening the rest of the line to Portsmouth if there is traffic to interchange. NS mothballed the line some two decades ago because it could route through Columbus which had no weight/height restrictions and there was little originating traffic east of Winchester. Ford's closing was a huge blow, too. The bridge over the Scioto River at Vera Junction (Portsmouth) also needs structural repairs. (Could also be said NS starved the line of traffic when it closed its Hillsboro branch.)

 

As much as a trail would be great, this line still holds a lot of utility. CCET has demonstrated that it can generate revenue runs on moribund tracks at a profit and can bring industry back to the railroad. Plum Run Quarry had for decades trucked their stone out but now uses rail. Winchester AG resumed and expanded rail access. But Purina has been by far the biggest win for CCET. The tracks are still in good shape except for a washout at McDermott.

 

They've started using the industry spur at the quarry IIRC. A good chunk of CET's business is car storage for NS as well.

I noticed in the negotiation overview presentation deck they made, one of the comparable valuations was how much money it would take for traffic to be rerouted if NSR lost access to the rail line, including restarting the rest of the Peavine. $1.6 billion is right in the middle of that range, but given how much the rail companies hate spending capital money, it seems like it should be higher.

First ad in Cincinnati Southern Railway campaign pledges 'no new taxes,' but what does that mean?

 

The first mailer aimed at convincing city voters to sell the Cincinnati Southern Railway for $1.6 billion has hit mailboxes and proclaims it will allow the city’s infrastructure to be modernized “with no new taxes.”

 

The phrase “no new taxes” appears on the piece seven times, but Mayor Aftab Pureval acknowledged it only means the city will not raise taxes for infrastructure if the measure passes.

 

The no-taxes promise, one of the most fraught in politics, does not extend to the other side of the city budget – the general fund, which pays for operations and basic services, Pureval told the Business Courier in an interview.

 

More below:

https://www.bizjournals.com/cincinnati/news/2023/09/05/cincinnati-southern-railway-ad-no-new-taxes.html

 

Anxiously awaiting the inevitable "NS paid off politicians, etc." story from all of this.

I'm a little concerned about the ballot language:

 

Quote

Shall the Cincinnati Southern Railway Board of Trustees be authorized to sell the Cincinnati Southern Railway to an entity, the ultimate parent company of which is Norfolk Southern Corporation, for a purchase price of $1,600,000,000, to be paid in a single installment during the year 2024, with the moneys received to be deposited into a trust fund operated by the Cincinnati Southern Railway Board of Trustees, with the City of Cincinnati as the sole beneficiary, the moneys to be annually disbursed to the municipal corporation in an amount no less than $26,500,000 per year, for the purpose of the rehabilitation, modernization, or replacement of existing streets, bridges, municipal buildings, parks and green spaces, site improvements, recreation facilities, improvements for parking purposes, and any other public facilities owned by the City of Cincinnati, and to pay for the costs of administering the trust fund?

Does the guaranteed payout increase relative to inflation? The rent does so it makes sense that the payout should as well. I also imagine that would alter the investment strategy quite a lot.

Federal regulators approve sale of Cincinnati Southern:

 

https://www.trains.com/trn/news-reviews/news-wire/federal-regulators-ok-norfolk-southern-acquisition-of-cincinnati-southern/

 

NS operates about 30 trains per day on the line. 

 

@Dev wrote:  "for the purpose of the rehabilitation, modernization, or replacement of existing streets, bridges, municipal buildings, parks and green spaces, site improvements, recreation facilities, improvements for parking purposes, and any other public facilities owned by the City of Cincinnati, and to pay for the costs of administering the trust fund?"

 

So, the city is going to use proceeds from the sale of the railroad to subsidize car infrastructure? It should be used to expand the streetcar and improve rail infrastructure within the municipal boundary for the Cincinnati-Indianapolis-Chicago corridor.

Edited September 21, 20231 yr by gildone

15 minutes ago, gildone said:

Federal regulators approve sale of Cincinnati Southern:

 

https://www.trains.com/trn/news-reviews/news-wire/federal-regulators-ok-norfolk-southern-acquisition-of-cincinnati-southern/

 

NS operates about 30 trains per day on the line. 

 

@Dev wrote:  "for the purpose of the rehabilitation, modernization, or replacement of existing streets, bridges, municipal buildings, parks and green spaces, site improvements, recreation facilities, improvements for parking purposes, and any other public facilities owned by the City of Cincinnati, and to pay for the costs of administering the trust fund?"

 

So, the city is going to use proceeds from the sale of the railroad to subsidize car infrastructure? It should be used to expand the streetcar and improve rail infrastructure within the municipal boundary for the Cincinnati-Indianapolis-Chicago corridor.

1) It would never pass if you included the streetcar. 

2) You now have a fund that can pay for dedicated repairs to the roads and you do not have to find it from other sources

3) Having a dedicated fund to repair roads allows you to re-allocate other funding that would go to the roads to other resources, so it is a shell game and really does not matter. 

And they're proposing to sell it for a pittance too.

On 9/5/2023 at 11:32 AM, JaceTheAce41 said:

Anxiously awaiting the inevitable "NS paid off politicians, etc." story from all of this.

 

The editor of The Enquirer is yet another in a long line of paint-brains.  He wrote a few weeks ago, in joking language, that he had no idea that Cincinnati "owned" a railroad. 

 

Well why don't you know this, big guy?  You're the editor of the city's newspaper and you haven't read a single book on the city's history?  The railroad figures prominently in any historical account of the city's history.  The railroad has had a fantastic website for the past twenty years. 

 

 

 

 

1 hour ago, Brutus_buckeye said:

3) Having a dedicated fund to repair roads allows you to re-allocate other funding that would go to the roads to other resources, so it is a shell game and really does not matter. 

Future capital budgets are going to be interesting, that's for sure. The administration has been saying for multiple cycles that the road resurfacing budget has been short $10 million per year, and growing.

2 hours ago, Brutus_buckeye said:

1) It would never pass if you included the streetcar. 

2) You now have a fund that can pay for dedicated repairs to the roads and you do not have to find it from other sources

3) Having a dedicated fund to repair roads allows you to re-allocate other funding that would go to the roads to other resources, so it is a shell game and really does not matter. 

 

So you're proposing to use the sale of a railroad to the private sector so a governmental body can use the proceeds to help fund its competition? Are you sure you're a conservative?

7 hours ago, KJP said:

 

So you're proposing to use the sale of a railroad to the private sector so a governmental body can use the proceeds to help fund its competition? Are you sure you're a conservative?

TBH I am fairly indifferent on the sale, but I think it is best to sell. I think that government has no business being the owners of a rail line and the risks that come with it. They are better off holding assets in financial instruments that offer a bit more liquidity and the ability to reposition the assets in the event of a change in circumstance. 

Owning the railroad, while profitable has a lot of risks to it for the city. The most significant is the fact that railroads are oligopolies in the US and a mature industry. If CSX does not or down the line would choose to default on the lease, it would be very difficult to get someone to replace them on that line for potentially the same rate.  Being a fixed asset that is illiquid, the city could be left holding the bag should something happen. By getting out of the railroad business, the city can hold the proceeds in more liquid assets that allow it to mitigate the risk of the railroad. 

 

I do see the risks that those who are against the sale say about the funds not being used appropriately. That does happen, politicians and government bureaucrats often are not great shepherds of the public trust, which is why we are better of with limited government, but that is a debate for a different time. 

 

Ultimately, for me it comes down to the fact that the local government is better off not being tied to a fixed asset like the railroad and would be better off in more flexible financial instruments. 

You totally missed the point of my comment. I don't care if the city sells it or not. What the city does with the money is the point. And you, as an alleged free-market conservative, just proposed having a governmental body use the revenues from the sale of an asset to a private sector corporation to undermine said corporation by funding its competition.

 

Pretend you sell widgets from a store set on city property. You buy the property. The city uses the money to improve a competing widget store across the street, making it more efficient, comfortable and competitive than yours. Tell me the free-market principles at work here.

To be clear, there is nothing in the language that would stop the city from using the money to maintain or expand the streetcar. Rehabbing city streets could very well include adding bike lanes, bus only lanes, or even streetcar tracks. The money would be used for the exact purposes that the current railroad fund is used for, and that is to maintain city-owned infrastructure. Nothing about that would change. 

22 hours ago, Brutus_buckeye said:

1) It would never pass if you included the streetcar. 

2) You now have a fund that can pay for dedicated repairs to the roads and you do not have to find it from other sources

3) Having a dedicated fund to repair roads allows you to re-allocate other funding that would go to the roads to other resources, so it is a shell game and really does not matter. 

So in other words, more subsidizing of driving from non-driving revenue.  Meanwhile in Ohio, gas taxes can only be spent on roads. 

On 9/8/2023 at 2:17 PM, Dev said:

I'm a little concerned about the ballot language:

 

Does the guaranteed payout increase relative to inflation? The rent does so it makes sense that the payout should as well. I also imagine that would alter the investment strategy quite a lot.

 

Looks like a grab for more road money. Vote no, then put up a ballot measure to dedicate the money to better neighborhoods, transit and an expanded streetcar system.

On 9/22/2023 at 12:36 PM, gildone said:

So in other words, more subsidizing of driving from non-driving revenue.  Meanwhile in Ohio, gas taxes can only be spent on roads. 

 

21 hours ago, neony said:

 

Looks like a grab for more road money. Vote no, then put up a ballot measure to dedicate the money to better neighborhoods, transit and an expanded streetcar system.

I get that you are all in on the non-car, public transit, expanded streetcar, etc., etc. but that is no reason to hold this hostage. 

 

You are trying to bring completely unrelated matters together and it the only goal of doing so is preventing anything from happening. It is akin the 5 year old saying if I cant have what I want, you cant get what you want. 

 

Regarding the railroad sale, vote yes or no because you agree that it is a good deal for the city or not a good deal for the city and will provide a good stable revenue stream going forward for a long time. Do not vote no because you disagree with the fact that this will go solely toward roads and not your preferred pet projects. 

 

The reality is, at this time you are not realistically going to get funds to go toward the streetcar, building sidewalks, or whatever other non road related infrastructure you may want. The political realities of it at the current time just do not allow for it. Your argument has been presented and dismissed. Just is not going to happen. So what you are left with is the opportunity for a deal that would create 55+ Million a year for roads, or remain at the current 25+ million that has no restrictions and there is a hope to get something a bit more in the future as the lease would be renegotiated (which is not a guarantee). Is a bird in the hand better than two in the bush?? I would probably say yes.

 

So you now get $50 million that is specifically earmarked toward roads. Good/bad/indifferent, the fact is that the roads are there and must be maintained. You are going to have to budget and spend money out of the city general fund to pay for those roads whether you like them or not. No matter how much you may pout and complain about "road culture" the reality is that it exists and it is here AND your tax dollars ARE GOING TO PAY FOR THEM whether you like them or not. The big difference is now the city budget does not need to account for $50 million of road improvements in the general budget and that money can now go somewhere else. So, big picture, yes, this actually helps expand the streetcar, and yes, this money will help with other neighborhood initiatives because now you do not have to allocate as much money out of the general budget for road repairs. 

There are numerous reasons why you should not like this deal and there are numerous reasons to like this deal, but to vote no because it does not allocate money to other transit is not a great reason to vote no. 

1 hour ago, Brutus_buckeye said:

So you now get $50 million that is specifically earmarked toward roads.

I think it's important to point out that "existing infrastructure" is much more than just road maintenance. While the backlog is largest for the public RoW, there's plenty of buildings needing renovations across just about every department at the city, in addition to improvements needed at just about every park and recreation area. I also assume vehicles could count as infrastructure.

The more useful criticism in this vein, is that the city's Complete Streets policy is very weak, and there's no real evidence that the city will be committed to using these funds in a responsible way. If you ignore concerns about traffic safety or transportation alternatives, there are a lot of collectors and arterials in the city that are overbuilt, so the city is wasting money maintaining a lot of roadway capacity that is not being used by the public. The money should be spent on right-sizing roads for the actual volume of traffic, and on-street parking, they actually have today, which helps to reduce the backlog in the (very) long-term. For example, the Linn Street project is going to physically be narrowing the road by moving both curbs in. So on the upfront, this makes the project much more expensive, but the long-term maintenance costs go down, since the amount of the RoW that is subjected to the higher wear & tear of roads is going to be reduced. As long as they don't mess up the tree plantings, the new, larger sidewalks, will easily last 100 years, while the road itself will only last 30 years in the best case scenario.

The other concern is that more of the existing capital budget will be shifted to this new fund, especially if the payout grows faster than the maintenance backlog increases, allowing the more traditional infrastructure spending to be spent on road widenings. In other words, the fund becomes a crutch the city will lean on to avoid having to make the necessary reforms that would require them to spend their money more wisely.

There's also no guarantee that it will be $50 million in any year. The wording is to have a payout that is at least the same as the rent payment right now, with no guarantees that the payout would increase as much as the rent would have. The selected manager of the funds, as well as the agreed upon investment strategy, will have a big impact on how much the fund pays out.

On 9/22/2023 at 8:48 AM, DEPACincy said:

To be clear, there is nothing in the language that would stop the city from using the money to maintain or expand the streetcar.

@Brutus_buckeye If you took notice, I "thumbs upped" this remark by DEPACincy.  So it was already made clear prior to your response that: 1) spending on transit or the streetcar is not prohibited;  and, 2) my "thumbs up" of the remark indicates that I acknowledge that.  My remark after that was just my own opinion, which I'm allowed to have, about subsidizing streets/roads with money raised from the sale of the railroad, regardless of how the vote turns out. I wasn't advocating voting one way or another or even opposing the sale.  That was a lot to read into that remark.

 

On another note, and again, this remark is not a signal in any way, shape, or form about the sale or how the proceeds will be used.  I'm asking solely for clarification about your opinion city ownership of the rail line.  What's the difference between government ownership of a fixed asset like a rail line and government ownership of fixed assets like roads/streets, highways, and in Cincinnati's case, the streetcar line?

46 minutes ago, gildone said:

On another note, and again, this remark is not a signal in any way, shape, or form about the sale or how the proceeds will be used.  I'm asking solely for clarification about your opinion city ownership of the rail line.  What's the difference between government ownership of a fixed asset like a rail line and government ownership of fixed assets like roads/streets, highways, and in Cincinnati's case, the streetcar line?

So there is one big differentiator between the rail line and roads and streets (and the streetcar). Traditionally, it is the acceptance that cities or governments own assets to support the common good and assets that would not be efficient to be owned by the private sector (i.e. Roads, bridges, police, fire). At one time, you could make the point that the Cincinnati Southern fit in this box. However, I do not think it does in the present day.

 

The Cincinnati/Southern railway is held for investment purposes to generate a financial return for the city so that the city could use the proceeds of those assets to spend on other projects in the general fund. Whereas, roads, bridges, the Streetcar are also assets but their purposes is more for the common good and to spur development and economic activity in the city. The Streetcar, roads and bridges are not measured by ROI, but the Cincinnati/Southern is only about the ROI at this point in its lifespan. Given that, is it really in the best interest of the city to own an asset whose sole benefit is ROI and it is an illiquid asset that carries the risk of illiquidity or is it better to divest that illiquid asset and place it into other assets that may allow for more liquidity and flexibility to take advantage of potential market opportunities if they arise. 

56 minutes ago, gildone said:

If you took notice, I "thumbs upped" this remark by DEPACincy.  So it was already made clear prior to your response that: 1) spending on transit or the streetcar is not prohibited;  and, 2) my "thumbs up" of the remark indicates that I acknowledge that.

Regarding the Streetcar spending. I was not necessarily criticizing that you cant spend money from the sale on the streetcar or streetcar expansion, my main issue with promoting the streetcar is that after years of negative publicity, the wounds have not exactly healed there yet and it would not be beneficial to pushing streetcar expansion as an effort to sell it to the voters. 

On 9/25/2023 at 8:51 AM, Brutus_buckeye said:

 

I get that you are all in on the non-car, public transit, expanded streetcar, etc., etc. but that is no reason to hold this hostage. 

 

You are trying to bring completely unrelated matters together and it the only goal of doing so is preventing anything from happening. It is akin the 5 year old saying if I cant have what I want, you cant get what you want. 

 

Regarding the railroad sale, vote yes or no because you agree that it is a good deal for the city or not a good deal for the city and will provide a good stable revenue stream going forward for a long time. Do not vote no because you disagree with the fact that this will go solely toward roads and not your preferred pet projects. 

 

The reality is, at this time you are not realistically going to get funds to go toward the streetcar, building sidewalks, or whatever other non road related infrastructure you may want. The political realities of it at the current time just do not allow for it. Your argument has been presented and dismissed. Just is not going to happen. So what you are left with is the opportunity for a deal that would create 55+ Million a year for roads, or remain at the current 25+ million that has no restrictions and there is a hope to get something a bit more in the future as the lease would be renegotiated (which is not a guarantee). Is a bird in the hand better than two in the bush?? I would probably say yes.

 

So you now get $50 million that is specifically earmarked toward roads. Good/bad/indifferent, the fact is that the roads are there and must be maintained. You are going to have to budget and spend money out of the city general fund to pay for those roads whether you like them or not. No matter how much you may pout and complain about "road culture" the reality is that it exists and it is here AND your tax dollars ARE GOING TO PAY FOR THEM whether you like them or not. The big difference is now the city budget does not need to account for $50 million of road improvements in the general budget and that money can now go somewhere else. So, big picture, yes, this actually helps expand the streetcar, and yes, this money will help with other neighborhood initiatives because now you do not have to allocate as much money out of the general budget for road repairs. 

There are numerous reasons why you should not like this deal and there are numerous reasons to like this deal, but to vote no because it does not allocate money to other transit is not a great reason to vote no. 

 

Pffft.

 

"RWU has advocated for public ownership of the railroads, saying that selling the rail line would be a lost opportunity for Cincinnati. The group held an online press conference about the sale last week."

https://www.freightwaves.com/news/cincinnati-voters-to-decide-on-sale-of-cincinnati-southern-railway-to-ns

Ex-councilman Flynn thinks city can get a better lease deal for Cincinnati Southern Railway

 

One of the top opponents to Cincinnati’s proposed sale of the Cincinnati Southern Railway said the city can wield the proposed $1.6 billion sale price against Norfolk Southern in negotiations and arbitration to secure a better lease price if voters reject it.

 

One of the main points of contention between the sale's supporters and opponents, which voters will decide upon in the Nov. 7 election, is whether the city can get a better deal by continuing to lease the railway.

 

Mayor Aftab Pureval and other supporters contend that the arbitration process that likely would follow a rejected sale is biased against the city. They believe going to arbitration will produce an annual lease payment that will be less than what the city can get if it sells the railway for $1.6 billion, invests that money and spends only the investment returns on existing infrastructure. The city faces a $400 million deficit on roads, parks, recreation centers and other capital needs.

 

Former Cincinnati Councilman Kevin Flynn, who is helping lead the opposition to the sale, told a community forum Thursday, Sept. 28, that because Norfolk Southern and the city have agreed the railway is worth $1.6 billion, the city should be able to dramatically increase the lease payments.

 

After all, the best measure of what something is worth is the amount two sides, after an arm's length negotiation, are able to agree on, Flynn said.

 

“Let’s be silly and say I’m willing to accept a 4% return on my money,” Flynn said, assuming, for the sake of argument, that the railway is worth $1.6 billion. “That would be $64 million a year that you should be receiving in rent … and we (would) still own the railroad."

 

More below:

https://www.bizjournals.com/cincinnati/news/2023/09/29/kevin-flynn-cincinnati-southern-railway.html

On 9/29/2023 at 9:40 AM, ColDayMan said:

“Let’s be silly and say I’m willing to accept a 4% return on my money,” Flynn said, assuming, for the sake of argument, that the railway is worth $1.6 billion. “That would be $64 million a year that you should be receiving in rent … and we (would) still own the railroad."

This is a very logical argument but he's got the situation backward. The appraisals the CSR board got was that the value of the line was $65 million a year. You can see that the board consistently offered $65 million a year for the lease. NSR would not come close to that price but would negotiate on the sale price. Eventually it got to the point where the sale price was high enough that the investment fund could easily make $65 million a year.

Either he's completely ignoring how the current price was agreed upon or hasn't been bothered to read through all of the background. He's so close yet so far.

1 hour ago, Dev said:

This is a very logical argument but he's got the situation backward. The appraisals the CSR board got was that the value of the line was $65 million a year. You can see that the board consistently offered $65 million a year for the lease. NSR would not come close to that price but would negotiate on the sale price. Eventually it got to the point where the sale price was high enough that the investment fund could easily make $65 million a year.

Either he's completely ignoring how the current price was agreed upon or hasn't been bothered to read through all of the background. He's so close yet so far.

So the area where I think Flynn's argument has merit is a very in the weeds argument about the difference between the capital budget and operating budget and how various operating items can quietly find their way into capital budget items and deplete the fund. There is certainly precedent for this to happen. However, it is an in the weeds argument and no matter how valid, would not play with voters. 

 

The argument about holding out for a better deal does not move me. This is a fixed asset and has a variable valuation. I have no doubt that there may be some money the city could be leaving on the table here. I also believe that the city could possibly hold out and get some "more" money, whatever that factor is. BUT, the question should be not, is the city getting the most possible in the sale of the asset, but rather is the valuation of the asset fair and reasonable for what it would be worth in the current environment. Is the price fair.  Whether you could extract 2-3% more is not the reason to oppose the deal.  It should be whether the price is a reasonable price for the asset in the current economic environment. I believe it is. 

 

There are certainly other reasons to oppose this but the price is not one of them. A 5% variance either way should not matter. 

14 minutes ago, Brutus_buckeye said:

So the area where I think Flynn's argument has merit is a very in the weeds argument about the difference between the capital budget and operating budget and how various operating items can quietly find their way into capital budget items and deplete the fund. There is certainly precedent for this to happen. However, it is an in the weeds argument and no matter how valid, would not play with voters.

What are you referring to? IIRC a capital item must be an improvement that lasts at least 5 years, which excludes anything that is operational. Skimming through the current capital budget and I'm not seeing anything that is operational.

6 minutes ago, Dev said:

What are you referring to? IIRC a capital item must be an improvement that lasts at least 5 years, which excludes anything that is operational. Skimming through the current capital budget and I'm not seeing anything that is operational.

i was referring to his point where there can be some games played with the capital budget. Pretty much what you are talking about, however, there can be ways to manipulate it to get items that should be in the operating budget off the books and into the capital budget. Essentially, that accounting gray area that is not really focused on. I do believe Flynn has merit on this argument but, it is something that would not resonate with the voters. 

22 minutes ago, Brutus_buckeye said:

Pretty much what you are talking about, however, there can be ways to manipulate it to get items that should be in the operating budget off the books and into the capital budget.

What are you referring to?