ACTION REQUESTED:
Title
Communication from the City Manager and Interim Corporation Counsel with a Request to APPROVE a Rail Line LEASE AGREEMENT between the City of Peoria and PIONEER INDUSTRIAL RAILWAY COMPANY.
Body
BACKGROUND:
The City of Peoria owns two railroad lines. First, the City obtained the 8.29 mile Kellar Branch in the 1980s from the bankrupt Chicago, Rock Island and Pacific Railroad after abandonment to be able to maintain service for the benefit of Peoria shippers and prospective shippers. Discontinuance of service of the 5.72 mile middle segment of the Kellar Branch occurred in 2010, and has been productively/successfully turned into a trail, part of the Peoria Park District's Rock Island Greenway. The remainder of the Kellar Branch consists of the Northern Remnant and the Southern Remnant, shown in the below schematic in red:
The referenced blue line in the above schematic consists of a 1.9 mile line of railroad known as the Pioneer Industrial Lead the City obtained separately from Union Pacific Railroad Company ("UP") (STB FD 34066) in 2001, extending from the Kellar Branch west to UP's Peoria Subdivision main line.
There are currently no active rail shippers on the Northern Remnant and Pioneer Industrial Lead (collectively the "Northern Tracks") or the Southern Remnant. The Northern Tracks reach industries in the Pioneer Industrial Park area; however, without any active shippers, there has been no maintenance or track upgrades performed in at least a decade. The sole shipper on the Southern Remnant, Obrien Steel ("OBS"), has been unable to obtain rail service from the current operator, and it desires to restore its rail service.
The common carrier railroad with authority to operate the City's remaining lines, the Central Illinois Railway Company ("CIRY"), is bankrupt and defunct, and has defaulted on its duties under the 2009 Rail Operating and Trackage Rights Agreement ("ROTRA") with the City. CIRY's registration with the Illino...
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