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Acquiring Rail Corridors:
Chapter 5: Researching the Property
Collecting information about the rail corridor not only helps you determine whether to purchase the rail corridor, but also provides information that helps shape your strategies in designing the transaction and negotiating the acquisition of the land.
Attorneys call the research phase "due diligence," and it is the most important step in considering whether to invest time, money and technical resources into a negotiation process.
Most agencies and organizations find it far too expensive to complete this due diligence without assurances that the railroad will sell at a reasonable price. Most groups want to balance the costs of research against the likelihood of purchase and acquisition. For this reason, look at property research as a two-step process.
The first step is gathering existing and readily available information to help assess whether to proceed with negotiations and to prepare for initial negotiations with the railroad. The second step involves formal title, environmental, and other reviews. Since the majority of these reviews require professional assistance and are therefore fairly expensive, they are generally conducted after you have gained an interest in the property, such as an option, but before the property transfer actually occurs. (See Chapter 9 for more details on this second step.)
What Do You Need to Buy?
Like any piece of real estate, a rail corridor consists of a wide range of property interests. Lawyers think of land as "a bundle of rights," meaning a collection of severable interests. Here are some of the rights you may want to buy:
Surface: To build a rail-trail, you need to obtain the right to use at least a portion of the surface. Unfortunately, there is no easy formula for how much of the surface is enough. Do you plan to build just a trail, or would you like to build other structures as well? Is the railroad interested in selling the entire corridor, or would it consider an offer to purchase only a part of the corridor? Are the land uses along the corridor compatible with trail use, or do you need to ensure there is a buffer of open space between the trail and the adjacent properties?
Subsurface: Depending on the length and location of the corridor, the right to use or lease the subsurface for water or sewer mains, gas pipelines, or telecommunications could be valuable. Don't assume the railroad owns these subsurface rights, however. Research the title to determine whether the railroad is in a position to sell these rights.
Remember, the railroad will almost certainly understand the value of these subsurface rights; don't expect to get them for nothing. Also, keep in mind that subsurface users usually need access to maintain cables or pipelines. Don't allow subsurface uses that threaten the trail's integrity.
Air rights: Local power companies, cable companies, and utilities with high-voltage transmission lines, may value rail corridors as locations for transmission facilities. Consider whether such uses are compatible with your vision for the corridor. If not, make sure you acquire those rights from the railroad so they can't be sold to third parties. On the other hand, you might consider acquiring these rights and leasing them to collect additional revenues.
Joint Use: If a railroad is abandoning only one of several tracks along a line, you may want to negotiate for rail-with-trail use, that is, trail use adjacent to an active rail corridor. Although railroads are reluctant to allow joint use, a rail-with-trail can be as safe as a rail-trail if it is properly designed and managed.
Rails-with-Trails
Although negotiating with a railroad to develop a rail-with-trail alongside an active rail line is beyond the scope of this publication, this book does contain a number of basic lessons that can be applied to negotiations for joint use. Perhaps foremost, any agency interested in establishing a rail-with-trail must devote a great deal of time to considering and analyzing a railroad's potential concerns. Rail corridors are dangerous places, and railroad representatives are apt to question the sanity of any proposal that suggests combining active rail lines with recreational or alternative transportation opportunities for individuals. Expect this reaction. On the other hand, don't let the conversation end there.
Nationwide, there are approximately 50 open rails-with-trails, as well as several dozen rails-with-trails projects. These facilities can be developed and managed without any additional risk to a railroad, if you take steps to address each and every one of the railroad's concerns from the amount of separation between the tracks and the trail to the minimum height for a fence or other barrier between the two.
In addition to addressing a railroad's concerns, remember that every railroad's primary business is the movement of freight or passengers. No matter how safe, useful or attractive a proposed rail-with-trail might be, a railroad will almost always need some additional incentive to allow joint use. Generate incentives to encourage a railroad to support joint use. By linking some incentive a cash payment, an agreement allowing the railroad to construct an additional rail line within a particular jurisdiction, or the settlement of some long-standing dispute between your agency and the railroad you will be much more likely to obtain cooperation from a railroad's representatives.
For more information about rails-with-trails, see RTC's study Rails-with-Trails: Sharing Corridors for Recreation and Transportation as well as Trails for the Twenty-First Century: A Planning, Design and Management Manual for Multi-Use Trails
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Improvements: There are basically two types of improvements that can be transferred with railroad corridors: track materials and non-track properties. Track materials include tracks, ties, ballast, tunnels, trestles, bridges, culverts and other equipment necessary for the operation of trains, such as signals and switch boxes. Non-track properties include depots and other buildings. You may not be interested in acquiring all of these improvements, just as the railroad may not want to sell all of them. What is important is that you understand the value of these improvements and that you reach an explicit agreement.
Remember, the purchases you make will affect the trail you build and determine its protection from future encroachments as well. You may decide not to buy air rights, but do you want high-tension wires along your trail? You may not need subsurface rights, but are you willing to suffer periodic disruptions as maintenance crews tear up the corridor to service a water or sewer line? You may need a stretch of land only 15-20 feet wide for a trail, but do you really want houses, parking lots or industrial sites immediately adjacent to the trail surface? Buy all the rights needed to ensure a quality experience for the users of your trail.
Finally, try to figure out which rights in the corridor are non-essential to you but have value to the railroad. If the railroad has a fiber optics company bidding for subsurface rights, you may not want to insist on those rights for yourself. Such companies can, no doubt, pay more than you can. On the other hand, if no subsurface user is on the immediate horizon the railroad may not value subsurface rights highly at all. This is where good intelligence about competitors for use of the corridor is critical.
Also, consider this option. If you are bidding against a third party who wants to use the entire corridor, you may decide to walk away from the negotiation, let the third party buy the corridor, and then negotiate with them rather than the railroad. Or you may want to pre-negotiate a deal with the third party (such as a utility), under which they would buy the corridor and then grant you a trail easement. Remember, however, that utilities generally buy only easements. They may not be able to give you a trail easement as a subset of their utility easement.
Obviously, the property interest you need to purchase for your trail is a matter for much discussion within your agency. Think it through and work it into your negotiation strategy.
Research the Corridor's Ownership
Most railroads acquired their corridors in one of three ways: through easements; through an outright purchase; or through land grants from local, state and/or federal governments. These acquisitions could be voluntary (freely negotiated or granted) or involuntary (taken by "eminent domain" or condemnation). It is quite possible that your corridor was constructed using all three methods; however, the methods are not equal in terms of the quality of ownership.
Easements
If a railroad holds an easement, it does not own the property it simply has the right to use the land for certain purposes. Railroads sometimes purchased easements because they were (and are) less expensive than buying a complete parcel of land. However, easements convey limited rights, typically limiting the railroad to rail use only. In some states, courts have interpreted "rail use only" or "for railroad purposes only" to mean any transportation use. Some states and courts have even held that "rail use" includes the right to construct communication lines, like fiber optics, within the corridor, since effective communication is a necessary element of operating a rail line. However, other states have interpreted the same words to mean actual railroad use. You will need to research your state's interpretation of these terms.
Once a railroad stops using the property in accordance with the terms of the easement agreement, and it has abandoned the corridor in accordance with state and federal laws, the railroad's rights are extinguished.
Outright Purchase
In other instances, a railroad may have purchased a parcel outright (called acquiring "fee title") because it wanted exclusive control of the property. In this case, the railroad would retain control of the property even after deciding not to operate a train along the corridor. The railroad could choose to develop the property itself or to sell it for any number of uses.
Land Grants
The final acquisition strategy that railroad's used land grants fits somewhere between easements and outright purchase. When the majority of railroad corridors were developed in the 1800s, governments at all levels frequently provided railroads with incentives to develop rail corridors. Governments, particularly those managing land west of the Mississippi River, turned over millions of acres of public land to railroads, with the understanding that the railroads would develop rail lines for the national good.
Depending on the state in which the corridor is located, an abandoning railroad may be able to dispose of the corridor as if it had acquired the property outright. In other states, a land grant did not transfer complete control of the property to a railroad; it conferred only limited rights, like an easement. Contact your state's Attorney General's office to learn how your state handles these land grants. Under the National Trails System Act Amendments of 1988, any abandonment of a federally-granted corridor reverts to the federal government, with a directive to preserve it for future rail use through interim use as a trail.
The exact nature of railroad ownership, and the company's ability to convey that ownership, are key to understanding the value of and rights to the property. An agency attempting to acquire a railroad corridor needs to ensure the railroad in fact owns what it is attempting to acquire.
Much of the information you need to conduct a preliminary analysis of the railroad's ownership is publicly available, often directly from the railroad. Virtually every major railroad has a map, called a "track map," of each corridor it owns. The map includes the parcel size and location, survey information (if the corridor has ever been surveyed), the location of all easements and encroachments, and references to the deeds by which all parcels were acquired. Ask the railroad's representative for a copy of the track map as early in the process as you credibly can.
In addition to studying the track maps, plan to review a variety of other public records tax maps, property surveys, and copies of the deeds that confirm ownership status. Visit the county courthouse and the local tax assessor's office to review these documents.
Carefully examine the information you have collected. Review the track map, tax maps, and deeds to develop a rough estimate of how much of the corridor the railroad owns through each acquisition type. If you are not railbanking the corridor, you will probably find it difficult to create a rail-trail if the railroad owns less than 50 percent of the corridor outright. This is because acquiring the remainder of the corridor will probably require many separate negotiations with individuals.
Field Assessments
In addition to understanding who owns the property and how it is held, it is also important to understand the physical and structural characteristics of the land. If the railroad has abandoned the corridor or has used it only infrequently, encroachments, trespassing, and illegal uses of the corridor may be a problem. Landfills, dumps, and junkyards, often illegally established, can create real hazards for a property manager. By examining the corridor before you acquire it, you will know what problems exist. If the corridor is poorly maintained, overgrown and obviously misused, prepare for skepticism from adjacent landowners about your trail idea. They have already suffered as a result of one owner's neglect, so they may believe that your agency will treat the corridor in a similar fashion.
Document the presence of any inappropriate structures or materials in or along the corridor during your preliminary site visits. These encroachments dumps, storage areas, driveways, parking lots, gardens or even buildings may not only affect the property's value, but may also contribute to the degradation of the land. In addition, encroachments by adjacent landowners or other users can complicate your effort to take title to land. (Under some states' laws, encroaching landowners have certain rights if they have occupied the corridor for a period of years.) Although you will probably need to rely on professionals to determine whether the encroachments will complicate your acquisition, your knowledge of their existence and location will make it easier to track the legal history.
As you inventory the corridor, record the location of every private and public crossing (such as roads and driveways) because crossings require careful consideration as you begin to develop and manage a rail-trail. You should also examine the land uses adjacent to the corridor, as they may have a significant impact on the development of the trail.
Reassembling a Rail Corridor
Development of the Snohomish County Centennial Trail
In the spring of 1988, Robin Thome, a member of the Snohomish County Parks Board in Washington, learned that $100,000 designated in the county budget for the purchase of an abandoned rail corridor had been removed from the budget. As the owner of property next to the abandoned rail corridor, she knew the rail corridor offered tremendous recreational and community improvement potential if it were developed as a rail-trail. With county officials apparently developing cold feet, she sprang into action and began organizing a citizens group, the Snohomish-Arlington Trail Coalition.
When the Trail Coalition began investigating the corridor's potential as a trail, Burlington Northern Railroad was in the final stages of removing tracks and ties from the 43-mile long corridor. In fact, portions of the corridor had been abandoned as early as 1972, and the corridor had been used for informal recreational activities for years. Armed with petitions signed by 6,000 people and overwhelming public support for their proposal, the Trail Coalition was able to convince the County Council to approve efforts to acquire the corridor and develop a rail-trail. Shortly thereafter, the Snohomish County Parks and Recreation Division created a new staff position County Trails Coordinator to direct the rail-trail effort.
As the rail-trail project moved forward, trail supporters were pleased to learn that Burlington Northern Railroad still owned nearly 70 percent of the corridor. Although it would require a great deal of work to reassemble the entire corridor, Burlington Northern's extensive holdings convinced trail supporters that it could be done.
Initially, the county used its Property Management Office to handle the acquisition, although a permanent property acquisition position was soon created with the Parks and Recreation Division. In conjunction with Universal Field Services (one of many companies which specializes in corridor acquisition) the county undertook a review of the corridor's title and began negotiations with Burlington Northern. Although Burlington Northern would only sell the property through a quit claim deed, the railroad was more than willing to sell its real estate parcels to the county for $2,500 an acre (1990 dollars). With an agreement reached, the county began acquiring the Burlington Northern-owned sections in 1990.
At the same time, county personnel began efforts to acquire the remainder of the corridor from the individuals and entities who now owned portions of the property. From the start, efforts were made to include all concerned property owners in the formulation of the rail-trail plan. As a result, many of the neighbors approached their negotiations with the county as a friendly transaction. Some property owners even donated their parcels for trail development. Of the entire 44-mile corridor, nearly 25 miles have been acquired, at an overall acquisition cost below the amount originally anticipated.
Despite the overall ease of these transactions, there have been some problems. Some property owners oppose the trail and have refused to sell. Others are using the negotiations as an opportunity to voice complaints that are unrelated to the trail, and still others are trying to win concessions from the county on other issues. To date, these hold-outs have not significantly jeopardized trail development activities, as the county has developed almost 7 miles of the Snohomish County Centennial Trail.
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Inventorying existing improvements, and determining their condition (for liability purposes) and value is another critical step during the site review process. The field assessment should be used as an opportunity to note the existence of bridges, tunnels, culverts, rails and ballast, ties, and any buildings owned by the railroad along the corridor. Which of them will be useful for future trail use? What would demolition, removal and salvage cost? Do the structures appear to be in relatively good shape?
Research Strategies
Don't limit your background research by relying on only one research tool. In gathering information about the property, you'll find it useful to:
- Walk the corridor;
- Check ownership deeds;
- View aerial photographs and/or maps;
- Discuss the corridor with railroad personnel; and
- Discuss the corridor with adjacent landowners, community members, and local government officials.
Be a creative researcher. A great deal of useful information is in the public domain.
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If you have completed each of the steps described above, you may have more questions than you had when you started, although you now have more information. At this point, you must decide whether the likeliness of a successful acquisition justifies the cost of a more thorough analysis of the corridor.
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