15 minutes ago, Brutus_buckeye said:

If N&S would go out of business that $37 million a year goes to $0.00. If N&S ever has to file bankruptcy...

 

Net Income Applicable to Common Shareholders:

2022 - $3.2B

2021 - $3B

2020 - $2B

2019 - $2.7B

5 hours ago, wjh said:

The $37M number that is proposed above - that is a guaranteed return which is good, my main concern with that - is there some sort of escalator in the lease? Like the lesser of 3% or CPI? If that is in the clause then I would lean towards the lease option as it will always go up and the money isnt speculative. 

Yes there is. It is tied to the Implicit Price Deflator for Gross National Product (GNPDEF). IIRC it generally rises faster than CPI. The ballot language for the sale mentions that the fund shall pay out at a minimum of what it is now, $26.5 million. It too will escalate along with the GNPDEF, although the ballot language does not specifically call that out.

4 hours ago, GISguy said:

 

Net Income Applicable to Common Shareholders:

2022 - $3.2B

2021 - $3B

2020 - $2B

2019 - $2.7B

Not saying that it is likely they would go under. THey are a very solid company, but bankruptcy of any company is always a realistic event even if the likelihood is minute.

The by the numbers equation in the does not take into account the fact that current inflation is nearly 4% and the residual payout from the proceeds if you preserve the principal for inflationary increases almost $64M would need to back to the principal leaving $24M less the investment management fees so would pay out less than the current lease payment even with a lump sum payout by NS.  

Apparently Cincinnati now has a water quality emergency that can only be resolved by sale of the railroad:

Local communists oppose the sale:

 

On 10/20/2023 at 6:14 PM, GHOST TRACKS said:

The by the numbers equation in the does not take into account the fact that current inflation is nearly 4% and the residual payout from the proceeds if you preserve the principal for inflationary increases almost $64M would need to back to the principal leaving $24M less the investment management fees so would pay out less than the current lease payment even with a lump sum payout by NS.

The fund is going to exist in perpetuity so current inflation rates being against historical norms isn't that big of a concern. So the near-term returns might be lower than a re-negotiated lease, but in 30, 50 or 100 years, most likely not.

Although these are concerns the fund manager, who has yet to be appointed, would be able to address, which is another reason why it's weird they are voting on it now, instead of waiting until next year.

If voters sink Cincinnati Southern Railway sale, will Mayor Aftab Pureval want to try again?

 

Under current state law, Cincinnati voters have one shot to decide whether to sell the Cincinnati Southern Railway to Norfolk Southern for $1.6 billion.

 

That wasn’t always going to be the case. Earlier versions of the state legislation that allowed for the sale to go to voters and for the potential proceeds to be earmarked solely for existing infrastructure did not cap the number of times the Cincinnati Southern Railway board could go to the ballot. The board, which holds the railway in trust on behalf of the citizens of Cincinnati, is the only city entity that has the power to send a sale to voters, although trustees also have indicated they would not have done so without the backing of Mayor Aftab Pureval.

 

But state lawmakers decided that if the vote failed, they wanted the board to come back and have to ask them again before going to the ballot a second time.

 

In an interview earlier this month, Pureval said he was not sure whether the city should try again if Issue 22 narrowly fails Nov. 7, but he did not sound enthusiastic about the possibility.

 

“I don’t know. It would be a very difficult process to start over again,” Pureval said Oct. 5. “If it fails, the top priority is getting as high of a lease payment as possible. We would have to see what our other options are.”

 

More below:

https://www.bizjournals.com/cincinnati/news/2023/10/23/cincinnati-southern-railway-voters-no-whats-next.html

 

Will the city have to pay 8 million dollars in fees per year if there are zero dollars to distribute from the fund to the city for that year ?

Edited October 24, 20231 yr by Coseau

7 hours ago, Coseau said:

Will the city have to pay 8 million dollars in fees per year if there are zero dollars to distribute from the fund to the city for that year ?

 

 

Good question. 

 

It would be nice to have a newspaper with an editor who didn't joke about his not knowing of the existence of this railroad. 

 

It would also be dandy if he knew how to pronounce XAVIER University.  It's not EXzavier, you clown. 

 

 

16 hours ago, Coseau said:

Will the city have to pay 8 million dollars in fees per year if there are zero dollars to distribute from the fund to the city for that year ?

The fees are tied to the value of the funds under management. Just like a mutual fund that charges money management fees that comes off the total return paid to the customer, the fees are baked into the account. The $8 million in fees is an estimate based on the value of the fund. As it goes up, the fees will go up marginally because there are more funds being managed by the fund, if the value of the fund decreases, the fees go down too.  

There is not necessarily a correlation between the amount of the fees and the amount of the distribution. Theoretically, the fund could increase 8% but the trustees decide not to distribute anything that year or to distribute say $30 million and reinvest the rest. This has no impact on the fees due as the fees are on the value of the funds under management. (Now, please note that I am speaking in generalities and not necessarily saying that the trustees may distribute $0 in a given year and instead reinvest the entire gain, etc.) 

1 hour ago, Brutus_buckeye said:

The fees are tied to the value of the funds under management. Just like a mutual fund that charges money management fees that comes off the total return paid to the customer, the fees are baked into the account. The $8 million in fees is an estimate based on the value of the fund. As it goes up, the fees will go up marginally because there are more funds being managed by the fund, if the value of the fund decreases, the fees go down too.  

There is not necessarily a correlation between the amount of the fees and the amount of the distribution. Theoretically, the fund could increase 8% but the trustees decide not to distribute anything that year or to distribute say $30 million and reinvest the rest. This has no impact on the fees due as the fees are on the value of the funds under management. (Now, please note that I am speaking in generalities and not necessarily saying that the trustees may distribute $0 in a given year and instead reinvest the entire gain, etc.) 

Thank you for answering my question. Why not pay a flat salary to experts from academia to manage the fund and use the bulk of that $8 million in fees to maintain existing infrastructure?

Edited October 25, 20231 yr by Coseau

2 hours ago, Coseau said:

Thank you for answering my question. Why not pay a flat salary to experts from academia to manage the fund and use the bulk of that $8 million in fees to maintain existing infrastructure?

It isn't that simple and any experts in academia likely do not have the time or even the expertise or list of contacts to properly do it.  Not to mention there are other things that we need like custody of the funds, cost of trading, reporting, due diligence, etc.  We can't just open an account at Schwab and have some profs from UC and XU start trading stocks on our behalf.  We will be much better served to compensate a team of investment professionals that does this every day as a full time profession and that can provide a complete suite of services.  There is a lot of work and service that goes into this.

 

This will likely be set up in a manner where we engage a firm to consult with our board wrt our overall asset allocation and then that firm goes out and selects individual managers for each asset class: stocks, bonds, private equity, real estate, etc.   We could end up using someone local like Fund Evaluation Group to do this or we could use one of the global behemoths like BLK.

2 hours ago, tabasco said:

It isn't that simple and any experts in academia likely do not have the time or even the expertise or list of contacts to properly do it.  Not to mention there are other things that we need like custody of the funds, cost of trading, reporting, due diligence, etc.  We can't just open an account at Schwab and have some profs from UC and XU start trading stocks on our behalf.  We will be much better served to compensate a team of investment professionals that does this every day as a full time profession and that can provide a complete suite of services.  There is a lot of work and service that goes into this.

 

This will likely be set up in a manner where we engage a firm to consult with our board wrt our overall asset allocation and then that firm goes out and selects individual managers for each asset class: stocks, bonds, private equity, real estate, etc.   We could end up using someone local like Fund Evaluation Group to do this or we could use one of the global behemoths like  BLK.

Thank you for answering my question.  I read that this line is Norfolk Southern 2nd most profitable line. CSX is the largest provider of rail service in the Cincinnati area, so it is unlikely that NS will give up their rights to this lease and let their biggest competitor get the leasing rights to this line. Why not just wait until the negotiating process for renewal of the lease is over to see how much the City will receive in lease payments ?

6 hours ago, Coseau said:

Thank you for answering my question. Why not pay a flat salary to experts from academia to manage the fund and use the bulk of that $8 million in fees to maintain existing infrastructure?

I do not think it is as basic as finding someone to manage the funds, it is also transaction costs and fees associated with connecting to various brokerage accounts are set up (it is not as easy as just opening a Schwab account online with this amount of money) There are other admin costs, etc. that go with managing the money.

 

Put it this way, the Scripps family has an office where they employ around 70 people in six figure jobs with the sole responsibility of managing the family trust as well as the disbursements to members.

36 minutes ago, Coseau said:

Thank you for answering my question.  I read that this line is Norfolk Southern 2nd most profitable line. CSX is the largest provider of rail service in the Cincinnati area, so it is unlikely that NS will give up their rights to this lease and let their biggest competitor get the leasing rights to this line. Why not just wait until the negotiating process for renewal of the lease is over to see how much the City will receive in lease payments ?

What the railway board has been saying is that; while they can certainly try and negotiate a better deal, there is no guarantee they could come to an agreement. Yes, worst case scenario is that N&S vacates the line and leaves the city holding the bag, but the greater liklihood is that any cost dispute will go to an arbitration board that would make a binding decision regarding the lease payment. The arbitration board is run by railroad professionals and it puts the city at a disadvantage in that forum. Therefore, it is not in the city's interest to go to arbitration because the odds of a favorable ruling are lower 

21 minutes ago, Brutus_buckeye said:

What the railway board has been saying is that; while they can certainly try and negotiate a better deal, there is no guarantee they could come to an agreement. Yes, worst case scenario is that N&S vacates the line and leaves the city holding the bag, but the greater liklihood is that any cost dispute will go to an arbitration board that would make a binding decision regarding the lease payment. The arbitration board is run by railroad professionals and it puts the city at a disadvantage in that forum. Therefore, it is not in the city's interest to go to arbitration because the odds of a favorable ruling are lower 

From what I read arbitration is not binding. Either party can reject it and then Cincinnati is free to offer the a lease to a third party. It is highly doubtful NS vacates a line that they have spent over a billion dollars improving it over the last 60 years in which the last project of double tracking a section of the line was begun in 2013.

 

https://infogram.com/cbc-election-rail-scenarios-1h984woe8vpyd6p

 

Edited October 25, 20231 yr by Coseau

1 hour ago, Coseau said:

From what I read arbitration is not binding. Either party can reject it and then Cincinnati is free to offer the a lease to a third party. It is highly doubtful NS vacates a line that they have spent over a billion dollars improving it over the last 60 years in which the last project of double tracking a section of the line was begun in 2013.

 

https://infogram.com/cbc-election-rail-scenarios-1h984woe8vpyd6p

There isn't anyone else to lease it to. NSR owns access to both sides of it, so any other company would have to pay the city, and NSR.

The issue is that the CSR board were advised that a lease was worth $65 million/year, while NSR would only come up to $37.5 million before time ran out. The board is essentially saying that the invested $1.6 billion is a more guaranteed way to get the $65 million. Arbitration would likely land between $65 and $37.5. I don't think either side would reject the arbitration, but it won't be what either side wants out of the deal.

13 hours ago, Dev said:

There isn't anyone else to lease it to. NSR owns access to both sides of it, so any other company would have to pay the city, and NSR.

The issue is that the CSR board were advised that a lease was worth $65 million/year, while NSR would only come up to $37.5 million before time ran out. The board is essentially saying that the invested $1.6 billion is a more guaranteed way to get the $65 million. Arbitration would likely land between $65 and $37.5. I don't think either side would reject the arbitration, but it won't be what either side wants out of the deal.

There is someone else to lease it to. It would be their competitor CSX which have rail networks both here and at Chattanooga. NS do not own access to both sides of the rail line. The Cincinnati Southern Railroad starts at Union Terminal which is owned by the city of Cincinnati and is used by both NS and CSX. The line ends at Chattanooga where it is connected to the CSX Wauhatchie terminal.  NS has rights of usage at that terminal which is connected by rail to their rail terminal just 10 miles away in Chattanooga. 

 

How is selling the railroad a more guaranteed way to get that $65 million from $1.6 billion when the city is planning to invest that money conservatively as to minimize risks expecting an interest rate of 5.5%, which would be $88 million but after 2% reinvestment and 0.5% management fee the city of Cincinnati would only net $48 million?  The city if the process goes to arbitration has a high probability of getting that amount with a 4% escalator clause in the new renegotiated lease, which would be financially better for Cincinnati because the lease payments will be stable and safe from risks while the  investment trust fund distributions will vary from year to year always subject to down market years in which the city could receive zero dollars.

  

If for some reason the investment fund only earns 3% for a particular year Cincinnati would only net $8 million dollars that year after the 2% reinvestment and the 0.5% management fee is deducted. If the interest rate is 2.5% or less Cincinnati gets no money distributed to it from the fund because 2% would be reinvested back into the fund and 0.5% would be deducted for the management fee.

 

 Cincinnati has a budget of $76 million of which $26 million comes from the railroad lease. That is 33% of its revenues. At a 5.5 % distribution rate in which $48 million would be distributed from the fund to the city, at that interest rate it would constitute roughly half of Cincinnati's revenues. If the interest rate drop below 2.5% in which zero dollars is distributed to the city from the fund then half of Cincinnati's revenues for its budget would evaporate for that time period. That would be disastrous for Cincinnati's budget finances.

Edited October 26, 20231 yr by Coseau

4 hours ago, Coseau said:

There is someone else to lease it to. It would be their competitor CSX which have rail networks both here and at Chattanooga.

 

The value in the line is that it connects Chicago to Atlanta. CSX already has a route for that so they would not bid, and if they did, it would be for much, much lower. Hell, the STB would likely block such a lease or purchase as it would create a monopoly.
  

5 hours ago, Coseau said:

NS do not own access to both sides of the rail line. The Cincinnati Southern Railroad starts at Union Terminal which is owned by the city of Cincinnati and is used by both NS and CSX. The line ends at Chattanooga where it is connected to the CSX Wauhatchie terminal.  NS has rights of usage at that terminal which is connected by rail to their rail terminal just 10 miles away in Chattanooga.

There are industry analysists saying otherwise. The WVXU FAQ has a relevant quote.
 

4 hours ago, Coseau said:

How is selling the railroad a more guaranteed way to get that $65 million from $1.6 billion when the city is planning to invest that money conservatively as to minimize risks

The city is still earning $65 million, even if it isn't using it same as cash.
 

4 hours ago, Coseau said:

if the process goes to arbitration has a high probability of getting that amount with a 4% escalator clause in the new renegotiated lease

We don't know who the arbitrator will be and what their bias will be. There are plenty of examples of regulators getting too cozy with industry reps, creating massive conflicts of interests and biases. Also, NSR has done a good job of obfuscating the value of the line so it's not a certainty in the slightest.


All of this is why I mentioned this earlier:

On 10/17/2023 at 3:55 PM, Dev said:

It's a neoliberal Rorschach test. If you are a strong supporter for the sale, you might be a neoliberal.

From a neoliberal mindset, the deal makes sense. It's not a good deal at all, but it's the best deal they could come to given the constraints they were in. If you disagree with the deal, that's fine, vote no, but we live in a neoliberal country so there are not a lot of options here, which is by design.

1 hour ago, Dev said:

 

The value in the line is that it connects Chicago to Atlanta. CSX already has a route for that so they would not bid, and if they did, it would be for much, much lower. Hell, the STB would likely block such a lease or purchase as it would create a monopoly.
  

 

Demand drives value and clearly there is demand or this line would not be the 2nd most profitable for NSR.  Why would CSX dismiss an opportunity to lease a line for $50 to $70 million a year that is yielding revenues ranging from $2 billion to $4 billion a year?  The STB could block such a lease but the inverse could happen also in which the STB could approve it.

 

1 hour ago, Dev said:

There are industry analysists saying otherwise. The WVXU FAQ has a relevant quote.
 

 

When did Norfolk Southern Railroad purchase Cincinnati's Union Terminal from the city of Cincinnati? 

 

1 hour ago, Dev said:

The city is still earning $65 million, even if it isn't using it same as cash.

How would the city will still be earning $65 million if return on the investment trust fund is in the negative for that year?  What good is earning $65 million when $40 million of that amount has to be deducted from that amount for fees and reinvestment leaving only $25 million the city can spend. That is 33% less then the $37.3 million NSR has offered to renew the lease.

 

1 hour ago, Dev said:

We don't know who the arbitrator will be and what their bias will be. There are plenty of examples of regulators getting too cozy with industry reps, creating massive conflicts of interests and biases. Also, NSR has done a good job of obfuscating the value of the line so it's not a certainty in the slightest.

Just like the conflict of interest that the Mayor's campaign manager is also the campaign manager employed by NSR for this sale.

 

Edited October 26, 20231 yr by Coseau

Good example of why this debate is so frustrating. Some points: 

 

The current lease agreement contains an automatic 25-year extension that will trigger if the sale fails. Arbitration exists only to set the annual payouts, which would likely revert to the city's current take with an inflation index, as an arbitrator would not be bound by Norfolk Southern's lease offer of $37.5M. The notion that the line could be competitively bid is pure fiction. 

 

Should the sale succeed, the city would never receive below the minimum payout amount it currently receives, and the CSR Board is required to dip into the principal to ensure that, so long as the principal never drops below 25% of the starting amount, a figure that adjust upwards with added yearly returns. 

 

The STB already approved of the sale in September. 

 

 

Edited October 26, 20231 yr by Pdrome513

34 minutes ago, Coseau said:

Demand drives value and clearly there is demand or this line would not be the 2nd most profitable for NSR.  Why would CSX dismiss an opportunity to lease a line for $50 to $70 million a year that is yielding revenues ranging from $2 billion to $4 billion a year?  The STB could block such a lease but the inverse could happen also in which the STB could approve it.

CSX would most certainly not lease it for $50 to $70 million a year. You have to remember that the CSR is one large section out of 3 for the total route, so CSX would be sending traffic out of it's way to use the CSR.

It's definitely way more likely that the STB would block that transfer given it's 1 of the 2 main routes between Chicago and Atlanta.

  

34 minutes ago, Coseau said:

When did Norfolk Southern Railroad purchase Cincinnati's Union Terminal from the city of Cincinnati? 

The building is a separate parcel from the yard. The city does not own any track in the yard, it only owns the building itself and the one passenger platform. The CSR property doesn't pick up until south of Gest. The immediate parcel to the north is owned by NSR.
  

34 minutes ago, Coseau said:

How would the city will still be earning $65 million if return on the investment trust fund is in the negative for that year?  What good is earning $65 million when $40 million of that amount has to be deducted from that amount for fees and reinvestment leaving only $25 million the city can spend. That is 33% less then the $37.3 million NSR has offered to renew the lease.

It's because they are talking about lifetime annual earnings, not the return from one specific year. So during a typical year, the returns are more likely than not to be at or above the value they think they the line is worth and the average return on the fund would be higher than what they could get from NSR via arbitration. The board didn't make this decision on their own, they hired an advisor to crunch the numbers. I think the more useful criticism in this vein is that the bid for the manager is out there but it won't be closed until after the election. It's really bizarre to me that they didn't wait until after that firm was selected so they could explain their planned investment strategy more clearly and publicly.

The minimum payout is pegged to the same metrics as the pre-existing lease, so the city's risk of being defunded is only if there's a Great Recession within the next decade. After that, the fund should be large enough that it no longer becomes an issue, just like major endowments.

  

34 minutes ago, Coseau said:

Just like the conflict of interest that the Mayor's campaign manager is also the campaign manager employed by NSR for this sale.

Yeah it's an awful look, especially since it's fairly obvious that the mayor lied about it.

34 minutes ago, Pdrome513 said:

The notion that the line could be competitively bid is pure fiction.

It could happen if one side does not accept that arbitration value, but I think the odds of that are incredibly low. As much as NSR wants to own the line outright, they certainly don't want to deal with the hassle of improving their existing lines to reroute traffic.

1 hour ago, Pdrome513 said:

The current lease agreement contains an automatic 25-year extension that will trigger if the sale fails. Arbitration exists only to set the annual payouts, which would likely revert to the city's current take with an inflation index, as an arbitrator would not be bound by Norfolk Southern's lease offer of $37.5M. The notion that the line could be competitively bid is pure fiction. 

 

 

 

 

If the city rejects the arbitrators' lease proposal, but Norfolk Southern accepts it:

The city can seek to lease or sell it to a third party, but Norfolk Southern has the right of first refusal to lease or buy it at whatever price a third party offers. If there's no offer within a year of the lease's expiration or the arbitrators' determination, Norfolk Southern can extend the lease on the terms decided by the arbitrators.

 

If Norfolk Southern rejects the arbitrators' lease proposal, but the city accepts it: 

The city can seek to lease  or sell the railroad to another party with 4 these caveats.

 

1: If the city gets a third-party offer better than what the arbitrators' proposed: It can sell, and Norfolk Southern has no right to extend the lease.

 

2: If the offer is favorable to the city than what the arbitrators' proposed: Norfolk Southern has the right to extend the lease or buy the property on the same terms as the third-party offer.

 

3: If the best third-party offer is equal to the arbitrators' proposal: Norfolk Southern has the right to lease on the same terms but only if the city rejects the arbitrators' determination.

 

4: If the city does not get any offers to lease or buy the railroad within one year of the lease expiration: Norfolk Southern has the right to continue using the property on the same terms as the current lease on a year to year basis. Meanwhile, the city can continue to try to sell or lease the railroad to another poarty. The city also can try to run the railroad itself, something it has never done.

1 hour ago, Pdrome513 said:

Should the sale succeed, the city would never receive below the minimum payout amount it currently receives, and the CSR Board is required to dip into the principal to ensure that, so long as the principal never drops below 25% of the starting amount, a figure that adjust upwards with added yearly returns. 

 

 

 

If the CSR is continually dipping into the principal to pay the minimum payout,  combined with inflation the fund will be permanently losing value and purchasing power. 

Edited October 26, 20231 yr by Coseau

The whole point is the CSR Board *can't* continually dip into the principal, nor is the scenario you described remotely realistic. 

 

As said above, the risks to both sides are so great there's zero chance either rejects the arbitrator's proposal. Consider it a lock. 

20 minutes ago, Pdrome513 said:

The whole point is the CSR Board *can't* continually dip into the principal, nor is the scenario you described remotely realistic. 

 

As said above, the risks to both sides are so great there's zero chance either rejects the arbitrator's proposal. Consider it a lock. 

So investments can't go bad in that payouts are consistently less than what was pitched in that the fund is not growing or growing less than the inflation rate on a long term basis?

Edited October 26, 20231 yr by Coseau

I saw someone on Twitter mention why can't Cincinnati fix their deficits without this sale.

 

From my perspective, if I were to respond, I would say that Cincinnati is actually in a really good position to become a much better city with the windfall from the sale compared to peer cities.

 

This could get us much improved roadways and parks, etc. and help tremendously with Quality of Life and put us above our peer cities in that regard.

 

I am thinking cities such as Indianapolis, Detroit, Cleveland, Louisville, Pittsburgh, Lexington, Fort Wayne, etc. Maybe even more attractive to Chicago or NYC or San Fran transplants and companies looking for smaller cities with lower cost of living yet having a dynamic urban lifestyle.

 

These type of investments could put us ahead of many places and put us on a much higher trajectory.

 

That is why I am in favor of the sale and the safeguards in place look solid.

 

Now, do I have reservations or maybe worries about how they spend the money? Sure, 100%. That said, you can't ever go wrong with fixing streets especially if they put traffic calming measures and pedestrian improvements (lighted cross walks on bumps, bike paths, etc.). This can have catalytic affects in the neighborhoods that need it most, push already developing neighborhoods more over the top, and even established neighborhoods even further up the top.

 

The end goal, keep increasing the city population, attract more employers into the city, and increase the Quality of Life for all residents. If this can be used (and I am not sure) on recreation centers than this could help with dealing with youth issues on a more granular level in keeping kids out of trouble and off the streets too.

Edited October 26, 20231 yr by IAGuy39

CSX might be willing to lease it (though NS is never parting with the CS)

The CS RR offers a more direct route to Waycross GA and would allow CSX to run double-stacks from Cincy to Waycross without going through Louisville and Nashville. CSX has a line from Cincy to Georgia on the old CC sub but tunnels on the line only allow for single stack intermodal operations. 

 

If NS went under, Canadian National/KCS would also be an option to lease the line or Genesee and Wyoming would run one of their subsidiaries on the line. It's too profitable of a route to leave abandoned.

Cincinnati Southern Railway sale campaign has a single funder — Norfolk Southern

 

The campaign for Issue 22, which would allow the city to sell the Cincinnati Southern Railway for $1.6 billion, has a single funder – Norfolk Southern, the railroad’s prospective buyer.

 

Norfolk Southern has given $4.25 million to the campaign, which has blanketed city residents’ mailboxes and TV screens in recent weeks leading up to the Nov. 7 election, according to a campaign finance filing by Building Cincinnati’s Future, the political action committee formed to sell the public on the sale.

 

“A yes on 22 is the only chance to address the backlog in needed repairs to city infrastructure that has accumulated over decades – without raising taxes,” said Jens Sutmoller, the treasurer for the PAC. “This isn’t a nice-to-do for Cincinnati; it’s an imperative backed by city leaders, the business community and organized labor, supported by legislation enforcing a strict permanent investment fund.”

 

The railroad’s funding drew the ire of opponents, who raised $4,800 and lambasted the reliance on Norfolk Southern.

 

More below:

https://www.bizjournals.com/cincinnati/news/2023/10/27/southern-railway-sale-campaign-norfolk-southern.html

 

Just passing along someone's opinion without opinion or comment of my own:

Edited October 27, 20231 yr by gildone

^What did NS sell? 

On 10/26/2023 at 1:20 PM, IAGuy39 said:

I saw someone on Twitter mention why can't Cincinnati fix their deficits without this sale.

 

 

 

 

Cincinnati, and in fact no city or state can run an annual deficit.  Only the federal government can. 

 

What they did is create a false crisis by saying that the city has all of this "deferred maintenance", even though Cranley swore that he was getting back to basics and would fill every pothole in the city.  

 

The fact is that Cincinnati does have a ton of barely-maintained side streets with 6 houses on them that are in bad condition.  But there is no reason to upgrade those roads.  But if you want to play an accounting trick, you say that the road needs $1 million in improvements right now and not over the course of the next 30 years.   

 

 

 

 

 

 

5 hours ago, ink said:

^What did NS sell? 

Don't know, but they may have gotten rid of a secondary line or two.  Who knows. 

Edited October 27, 20231 yr by gildone

In 2012, NS sold the 135-mile Kalamazoo-Dearborn section of the Detroit-Chicago line to the state of Michigan for $140 million, or $1.037 million per mile. 

 

They've also abandoned and sold some rights of way in their 41 years, including a portion (in Portage County) of the former Erie Railroad into Cleveland. But I don't know how much money they received.

Cincinnati Southern Railway Treasurer Paul Sylvester makes the case Norfolk Southern sale

 

I am currently the rreasurer for the Cincinnati Southern Railway (CSR) board of trustees. I was involved in the negotiations with Norfolk Southern (NS) to sell CSR. I fully supported presenting the sale agreement to the voters of Cincinnati. I fully support the passage of Issue 22.

 

We knew that preserving the value of this economic asset for future generations of Cincinnatians was the highest priority. Selling the railway at a fair and competitive price provides a unique opportunity to diversify risk and safeguard long-term value for the citizens of Cincinnati. That’s precisely what we have done.

 

The board’s decision to recommend to Cincinnati voters to sell the railroad was unanimous and our fiduciary responsibility. The choice was crystal clear. Here’s why:

 

...below!

https://www.bizjournals.com/cincinnati/news/2023/10/27/my-view-cincinnati-southern-railway-treasurer.html

Came across this editorial regarding this topic. Thought I’d share.  P.S.  a passenger rail link from Cincinnati to Atlanta would be awesome 

 

Edited October 31, 20231 yr by OH_Really

 

NS sold the former Lake Division (Wasson Line) to the City for approximately $12M around 2016.   Seem like with all the confusion over the lease terms and investment model/advisor, council authority verse the trustees and the City's true  capital needs, that waiting one year to fully vet this in a public transparent way would be the best option.   I don't live in the City city do don't have a direct stake in the outcome but has been poorly managed and communicated from the get go.   Coverage by the press has been spotty until recently as well.   All too typical for the City and other local political and business leadership who seem to hold the belief that they know what is best for their citizens without fully explaining the pros and cons. 

 

I came across some older lease info from the line in 1931 and the Southern (Cincinnati Southern is the S of NS) paid the City approximately $1.6M in rental charges at that time on net income on the line of around $12M.

On 10/27/2023 at 11:39 AM, ColDayMan said:

Cincinnati Southern Railway sale campaign has a single funder — Norfolk Southern

The fact that Norfolk southern is the one who wants this to pass so badly tells me it's a good deal for them or they would trying to maintain the status quo. If it's a good deal for NS it's not necessarily a bad deal for the city but it makes you wonder why they want to buy it so bad. Feels like we are being fleeced and that the former mayors and current mayor are probably getting a kickback of this sale somehow to shill for NS. 

 

Former mayors John Cranley and Charlie Luken blast back at railway sale opponents

 

Former Cincinnati Mayor John Cranley excoriated opponents of the proposed $1.6 billion sale of the Cincinnati Southern Railway at a news conference Oct. 31, while former Mayor Charlie Luken warned this would be city voters’ only chance to sell and reap major rewards in the form of better streets, sidewalks and city facilities.

 

The news conference came seven days before voters will decide on the sale, a decision Councilman Jeff Cramerding said is “the talk of the town” as he campaigned door to door for re-election. Cranley acknowledged that supporters may be back on their heels, saying he has an “underdog feeling about this.”

 

The two-term Democrat, now a lawyer in private practice, said the opponents are people from both the right wing and left wing of the political persuasion, comparing them to the coalition of ideologues who are opposed to U.S. aid to Ukraine.

 

“Isn’t that cute? Isn’t that nice? Isn’t that going to be nice for the citizens of Cincinnati?” Cranley said.

 

Cranley noted some groups want the money to produce reparations for African Americans driven from the West End during the construction of Interstate 75, while conservatives see an opportunity to deal Mayor Aftab Pureval, a rising star in the Democratic Party, a political defeat.

 

“The opponents have done a good job telling people to be scared. I’ve got to ask the middle of the road voter … you may not trust us but do you trust them? Is that the mainstream of this city?” Cranley said. “We are talking about getting roads fixed, potholes fixed, health centers fixed.”

 

More below:

https://www.bizjournals.com/cincinnati/news/2023/11/01/cranley-luken-blast-back-railway-sale-opponents.html

 

27 minutes ago, ColDayMan said:

 Cranley said. “We are talking about getting roads fixed, potholes fixed, health centers fixed.”

 

His whole tenure was about "back to basics" blah blah blah.  Why is all of this stuff supposedly in disarray if he's the guy who was just in charge for 8 years?

Today, The Enquirer wrote a profile on Jens Sutmoller:

https://www.cincinnati.com/story/news/politics/2023/10/31/who-is-jens-sutmoller-cincinnatis-tax-levy-expert/71227758007/

 

They wouldn't have been motivated to do so if the pro campaign wasn't really worried about this. 

 

What's crazy is how much Luken, Cranley, etc. are working so hard for this.  There is obviously a big plan for the money and Luken, Cranley, etc., have been tasked with getting it.  But they keep talking about pot holes. 

 

Yesterday I heard Bill Cunningham arguing against the railroad sale.  So I do think that some of the anti- campaign is coming from Republicans who just want to see Democrats lose and be denied a new source of money with which to reward their people. 

This thing is DOA.  The internal polling is bad per insiders.  Thing is, it really should have been easy to pass but the messaging and way that they went about it was comically bad.    I can't think of one thing that proponents did well until it was already too late.  The entire thing was a comedy of errors and a case study in what not to do.  It will be interesting to see if they give it another go.

 

I will come back here and eat crow if it actually passes.

I hate the Luken message of this being the one chance we will ever have to sell it. It's the opposite, we can sell it at many points in the future or renegotiate the lease when its time, but if we DO sell it that's forever and it will never ever be back in the city's hands.

 

I have to admit that Cranley's right though about voters being scared. Whenever I read about the fund managers, and the fund itself and the board controlling it and all the little things that could go wrong,+ I just can't help but think of this guy:

18 hours ago, GHOST TRACKS said:

 

 

I came across some older lease info from the line in 1931 and the Southern (Cincinnati Southern is the S of NS) paid the City approximately $1.6M in rental charges at that time on net income on the line of around $12M.

 

Point of clarification, the S in NS is for the Southern Railway, which was another rail corporation that merged with Norfolk and Western. It is not for the Cincinnati Southern.

19 hours ago, Lazarus said:

Today, The Enquirer wrote a profile on Jens Sutmoller:

https://www.cincinnati.com/story/news/politics/2023/10/31/who-is-jens-sutmoller-cincinnatis-tax-levy-expert/71227758007/

 

They wouldn't have been motivated to do so if the pro campaign wasn't really worried about this. 

 

What's crazy is how much Luken, Cranley, etc. are working so hard for this.  There is obviously a big plan for the money and Luken, Cranley, etc., have been tasked with getting it.  But they keep talking about pot holes. 

 

Yesterday I heard Bill Cunningham arguing against the railroad sale.  So I do think that some of the anti- campaign is coming from Republicans who just want to see Democrats lose and be denied a new source of money with which to reward their people. 

 

The guy sure is making money off of political campaigns, but is he actually helping? Or was his timing just right? Most of the issues listed in the article would pass regardless - Cincinnati has turned almost completely blue now and is majority rental so these small property tax hikes for things like mental health services aren't even remotely difficult to pass. If you're a homeowner you look at $15/year for something like the library as pocket change and if you're a renter you typically don't even factor the cost as it applies to you because of the degree of separation. They could spend $0 on these campaigns and they'd probably still pass.

 

Now this campaign, which on paper should be a slam dunk, is seemingly headed for failure - because people don't trust the city government and the campaign has done nothing to address that. They've probably dug themselves in deeper by parading out every big name politician from Cincinnati's past. They may as well have PG endorse it from a jail cell at this point. 

 

 

18 minutes ago, Ram23 said:

They may as well have PG endorse it from a jail cell at this point.

If this fails, PG Sittenfeld will shoulder most of the blame as to why.  At least Seelbach, and Dennard have been removed from council for a couple years and have kept a low profile on this (yes, I know Dennard is in jail) but all the PG trail headlines this fall certainly remind those who are skeptical that politicians can be corrupt 

On 11/1/2023 at 12:54 PM, tabasco said:

This thing is DOA.  The internal polling is bad per insiders.  Thing is, it really should have been easy to pass but the messaging and way that they went about it was comically bad.    I can't think of one thing that proponents did well until it was already too late.  The entire thing was a comedy of errors and a case study in what not to do.  It will be interesting to see if they give it another go.

 

I will come back here and eat crow if it actually passes.

 

 

It'll be interesting to see how this turns out.  It's a real wild card of an issue and I hesitate to make any predictions.   

 

I remember hearing someone say that when voters don't understand something, they tend to vote no. I think that this is one of those situations. 

 

 

 

7 hours ago, Brutus_buckeye said:

If this fails, PG Sittenfeld will shoulder most of the blame as to why.  At least Seelbach, and Dennard have been removed from council for a couple years and have kept a low profile on this (yes, I know Dennard is in jail) but all the PG trail headlines this fall certainly remind those who are skeptical that politicians can be corrupt 

 

Dennard isn't in jail anymore. She is out and runs a non-profit that helps people coming out of prison find employment.