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Acquiring Rail Corridors:
Chapter 3: Contacting the Railroad
Making The First Contact
Designate one person, most likely your Lead Negotiator, to act as the primary contact with the railroad's representatives throughout the acquisition process. If you allow uncoordinated communications from many different people, your effort will appear uncoordinated, and the railroad's representative may perceive your team as scattered and unfocused, instead of as a serious bidder. Your team members should clearly understand that they must channel all communications with the railroad through your Lead Negotiator, just as the railroad should be instructed to direct all inquiries and correspondence to that individual as well.
Pre-Abandonment Acquisition: If you are attempting to acquire a line that has not yet been abandoned, first contact either the railroad's legal department or the asset management department (sometimes called "Plant Rationalization" or "Strategic Planning"), since both departments play an active role in the corridor abandonment process. (See Chapter 4 for more discussion of these and other railroad departments.)
Post-Abandonment Acquisition: If you are attempting to acquire a line that has already been abandoned, first contact the railroad's real estate department and ask to speak with the agent who is responsible for your area.
In making initial contact with the railroad (which may consist of letters, phone calls or meetings), attempt to accomplish the following:
- Notify the railroad of your agency's interest in the corridor;
- Demonstrate your agency's credibility and commitment to making a deal;
- Distinguish your agency from other buyers;
- Learn more about the railroad and its representatives;
- Determine who has authority to negotiate on the railroad's behalf; and
- Begin your research.
When to Write; When to Call
Making the initial contact with a railroad is frequently a difficult process for trail groups. It takes creativity and persistence to locate the appropriate point of contact. There are numerous ways for your team to initiate contact with a railroad -- from cold phone calls followed by letters restating your interest to personal introductions. Use whatever method makes you most comfortable. The bottom line is that you need to locate an appropriate railroad contact as quickly as possible.
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Notify the Railroad of your Interest
Of course the most important reason to contact the railroad is your interest in the corridor. In deciding to make your initial contact, you must balance the need to convey your interest as soon as possible with your need to know as much as you can about the corridor. If you fail to notify the railroad of your interest early enough in the abandonment process, the railroad may take actions, such as the commencement of bridge removal, that would threaten the integrity of the trail corridor and could make a successful rail-trail conversion unlikely.
Demonstrate your Agency's Credibility
Although the rails-to-trails movement has become increasingly sophisticated over the last 10 years, some railroads may still be leery of entering into a relationship with unknown rail-trail advocates, especially if the project could become controversial. In order to facilitate smooth negotiations, it is extremely important that you convince the railroad of your agency's ability and commitment to the project. Such actions as sharing your rail-trail plan and providing the railroad with copies of public resolutions authorizing your agency to pursue acquisition can help demonstrate your credibility. It is also important to pay attention to the details of contracting and timing needs. And be sure to demonstrate a professional approach to information gathering, negotiation and follow-up if you want to be taken seriously in your discussions.
Distinguish your Agency from Other Buyers
As you establish your credibility, you should also begin educating the railroad's representatives about the differences between your agency and other potential buyers. Although this will be discussed in more detail below, two of the most important distinctions between your organization and other buyers include:
- Your agency wants to acquire the entire corridor (or at least a significant portion of it) intact; and
- Your agency or organization can access large funding sources (such as the Intermodal Surface Transportation Efficiency Act [ISTEA], or state or local bond monies) that are unavailable to other potential buyers, and which allow you to commit to paying cash upon signing. Other buyers may be unable to generate these sums as quickly.
It is also important that you educate the railroad during the early stages of the process about your responsibilities as public (or nonprofit) officials. Although you must be extremely careful not to say anything that leads railroad representatives to believe your agency is incapable of meeting the railroad's timeline or needs, do be candid about your obligations and constraints. These might include anything from a strict annual budget process to stringent timelines for ISTEA awards. Your candor will help prevent unnecessary conflicts down the road.
Get to Know the Railroad and its Representatives
One of the most important offshoots of a successful series of early contacts with a railroad's representatives is that you may begin to develop a personal rapport with the people (and the institution they represent) sitting across the table from you. Successful negotiations require trust and cooperation, and your ability to develop a meaningful rapport with the railroad's representatives will help build this relationship. While this relationship-building is entirely dependent on the personalities sitting around the table, you might try some of the following techniques to build rapport:
- Share your reasons for pursuing this rail-trail conversion;
- Discuss the history of the corridor and its significance;
- Ask the representative about the railroad's needs and begin a discussion of how you can help meet those needs; and
- Show genuine interest in the railroad's expectations about the negotiation.
Successfully building rapport requires tact and creativity, but it is well worth the effort. A supportive railroad representative is more likely to listen to your needs and to work with you to craft an agreement that meets those needs.
Determine who has Authority to Negotiate on the Railroad's Behalf
Locating the railroad's decisionmaker(s) is another important and delicate task. As you talk with the railroad's representatives, ask yourself, "Will this person be able to close a deal under the terms I hope to propose?" If the answer is "no," you need to find the person who can. If the railroad's representative is unable to identify the ultimate decision-maker, it may help to talk with other agencies, preferably in your state or region, that have negotiated with this railroad before. These groups may share their experiences and offer valuable advice like naming the railroad employees who were instrumental in the negotiations for their rail-trail. RTC can provide information on the "chain of command" for most major railroads and is ready to share this information with you.
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What if You're Not Dealing with a Freight Railroad?
While the vast majority of active rail lines are owned by the major freight railroads, you may be interested in a line owned by some other rail or transit entity. In most cases, these other corridor owners will either be shortline or regional railroads, or state or local transit agencies. Although these owners may act like a freight railroad in certain ways, they are likely to pose different difficulties for an agency interested in acquiring a corridor for trail use.
Unlike the major railroads, most shortlines and regional railroads are much smaller organizations with a less-defined organizational structure. There will probably not be a real estate department or a legal department, for example. This less-defined structure, combined with personnel who may be less experienced with the intricacies of the abandonment and corridor disposal process, may require you to spend a great deal of time educating these railroads about the benefits of railbanking and trail use in general. To make matters worse, some shortline railroads are not governed by Surface Transportation Board regulations, as they are not engaged in interstate commerce. State regulation of railroads varies significantly, and many provisions which can be used to support a rail-trail project, such as the federal railbanking statute, may not be available under state law.
The less bureaucratic structure of many shortlines, however, may allow the railroad's personnel to take a more flexible approach to disposing of the corridor for trail use. Additionally, many shortline railroads depend on the state Department of Transportation (DOT) for a significant portion of their operating funds. If you convince the rail personnel in your state's DOT to assist in your acquisition efforts, your negotiations with the shortline railroad may be eased significantly.
Unlike shortlines or the major railroads, transit agencies are primarily responsible for transporting people. As a result, these agencies tend to have a greater appreciation for the transportation potential of a proposed trail. In many cases, this understanding has led to cooperation between a trail developer and a transit agency, especially when trail supporters can demonstrate that the trail will be used as a means for accessing the transit system. Despite successful examples of cooperation in communities like Los Angeles, Boston, and Dallas, however, don't expect to be received with open arms by a transit agency.
Since most transit agencies operate only a bare-bones rail transit network in the communities they serve, it is extremely unlikely that a transit agency will abandon a rail line. There are two primary instances in which you are likely to be involved in negotiations with a transit agency:
- The establishment of an interim trail on a corridor planned for future transit use; and
- The establishment of a rail-with-trail.
In both cases, the transit agency may greet the establishment of a trail with skepticism or distrust.
Many state and local transit agencies, particularly in the northeast, have acquired corridors which were abandoned by freight railroads for their long-term potential as transit routes. In many instances, these corridors have gone undeveloped since it is currently too costly o establish transit routes on these lines. Putting a corridor into productive use as a trail may seem logical, but some transit agencies may oppose such a proposal.
Many transit systems encounter a great deal of opposition whenever they propose to expand mass transit. As a result, these agencies tend to jealously guard all corridors they currently own against any non-transit use. Agencies, including the Massachusetts Bay Transit Authority, the florida Department of Transportation, the Connecticut Department of Transportation, and the New Jersey Transit, have all opposed rail-trail proposals for fear that the creation of a trail might preclude the eventual establishment of a transit line within the corridor. Convincing a transit agency to allow interim trail use requires perseverance, patience, and creativity.
Rails-with-trails proposals are also likely to meet with a great deal of skepticism. Although rails-with-trails can be safe, popular facilities with proper design and management, transit agencies are likely to worry about their liability risks and the potential for a deadly accident between trail users and a train. Again, patience and perseverance are essential to winning over a transit agency.
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Begin your Research
In addition to getting to know the railroad and its representatives better, use your early meetings and conversations with the railroad to begin researching the corridor. Explain the research you plan to conduct and confirm the railroad's expected selling date. These steps will help establish a timeline and will lay the groundwork for subsequent meetings. Take advantage of these early conversations and meetings to make any reasonable requests for information or assistance from the railroad, e.g. asking for permission to tour the corridor.
Once you've convinced the railroad's representatives that you are a credible negotiating partner, they will be much more amenable to sharing their information about the corridor with you. By using whatever information the railroad is willing to provide, you can begin to understand its analysis of particular issues.
Strive to be flexible enough to handle whatever issues the railroad's representatives might raise in your early meetings. However, you are not ready for actual negotiations. If, for example, the railroad's representative asks you how much you would be willing to pay for the corridor, don't be afraid to say you believe it is premature to discuss purchase price or specific terms.
Do You Know A VIP?
Sometimes whom you know is as important as what you know. Before allowing your project to get lost in the bureaucratic maze of railroad offices and personnel, determine whether anyone associated with your project is a friend or colleague of a member of the railroad's leadership, or better yet, is actually a part of the railroad's leadership itself. If no one obvious comes to mind, you might read the biographies of the railroad's board of directors in the railroad's annual report. Does anyone on the board come from your community? Does any railroad board member also sit on the board of another organization with which you have dealt?
If you aren't able to locate a VIP this way, consider asking a politician to intercede on your behalf. For this to work effectively, concentrate on locating a state or national politician -- the Governor or a Member of Congress from your state -- to act as your advocate. At this point, you want the railroad to understand that you are a credible organization working on a project that has wide political and public support. Having a politician intercede on your behalf could jump-start the acquisition process.
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