Youngstown and Southeastern Railroad
Encyclopedia
The Youngstown and Southeastern Railroad is a short-line railroad subsidiary of the Indiana Boxcar Corporation
that operates freight train
s between Youngstown, Ohio
and Darlington, Pennsylvania
, United States
. The line is owned by the Columbiana County Port Authority, leased to the Eastern States Railroad, which is owned by the line's primary shipper, and contracted out to the YSRR. Freight is interchanged with CSX Transportation
and the Norfolk Southern Railway
at the Youngstown end.
The trackage was originally owned by the Youngstown and Southern Railway , which operated from 1904 to 1993, including a period as an electric interurban
passenger railway between 1907 and 1948, being the last such line in Ohio. It was later jointly owned by the Pennsylvania Railroad
and Pittsburgh and Lake Erie Railroad
. After a local company bought the line in November 1996 and illegally closed it and blocked repairs, the line was out of service for almost five years until the Central Columbiana and Pennsylvania Railway began operations in May 2001. Service under the YSRR name started in 2006, after the second of two less-than-two-year periods of operation by the Ohio Central Railroad System component Ohio and Pennsylvania Railroad (the first was in 1995 and 1996).
and the Norfolk Southern Railway
adjacent to the Mahoning River
. It heads northwest up the river bank and then curves southwest to climb a ravine to the highlands of Boardman Township. The original interurban line followed Front Street and South Avenue out of downtown and over the Mahoning River, then a private right-of-way
between Wabash and Franklin Avenues, joining the present line just east of South Avenue. Beyond Boardman, the line continues through the highlands, crossing the Norfolk Southern Railway
's Fort Wayne Line
at Columbiana. As it approaches Signal, where it turns east, and the Pittsburgh, Lisbon and Western Railroad once continued west, it drops into the valley of the Little Bull Creek, which empties into Bull Creek
before it reaches Negley. From that community, the Smiths Ferry Branch formerly extended south alongside the North Fork and main course of Little Beaver Creek
, reaching the Ohio River
at Smiths Ferry. The main line continues east from Negley, up the North Fork Little Beaver Creek valley into Pennsylvania, where it ends at Darlington. It formerly continued a short distance farther to the Fort Wayne Line at New Galilee.
between Youngstown and Columbiana, and electrified the line with overhead wires in 1907, also extending it 3 miles (4.8 km) to Leetonia on the Youngstown and Ohio River Railroad
(Y&OR) that year. In addition to carrying passengers as an interurban railway, the company handled freight
, primarily coal
from the electric Y&OR and the steam Pittsburgh, Lisbon and Western Railroad (PL&W). After the Y&S entered receivership
in 1915, a 1916 reorganization produced the Youngstown and Suburban Railway.
In the late 1920s and early 1930s, Mahoning Valley
industries and the Pittsburgh Coal Company
attempted to build a new rail line between the Ohio River
and Youngstown, claiming that the existing railroad connections (Pittsburgh and Lake Erie Railroad
and Pennsylvania Railroad
) refused to build suitable river transfer facilities. The Interstate Commerce Commission
denied the application in exchange for the construction of these facilities. Later the coal company built a private railroad from the river at Smiths Ferry, Pennsylvania to the PL&W at Negley, Ohio
, where it connected to Youngstown through control, by its Montour Railroad
subsidiary, of the PL&W (New Galilee, Pennsylvania
to Lisbon, Ohio
) and Y&S (the latter acquired in 1928), and construction of a line between the PL&W at Signal and the Y&S at Columbiana. (The PL&W from Signal west to Lisbon was subsequently abandoned.) Large amounts of coal were shipped along the river from the mines to Smiths Ferry, and then over the rail line to Youngstown steel mill
s. The Y&S changed its name back to Youngstown and Southern Railway in 1944, and on January 1, 1945 it merged the PL&W into itself.
After World War II
, the Consolidated Coal Company, successor to the Pittsburgh Coal Company, decided to sell its railroad properties to the Pennsylvania Railroad (PRR). The PRR agreed to purchase the Montour, and with it the Y&S, jointly with the Pittsburgh and Lake Erie Railroad
(P&LE), a subsidiary of the New York Central Railroad
(NYC). The two companies gained control on December 31, 1946, and simultaneously conveyed the private railroad south of Negley to the Y&S. Passenger service ended in 1948 on the Y&S, the last of Ohio's interurbans, and the Columbiana-Leetonia segment was abandoned that year, its connection to the Y&OR being long-gone. The eastern end of the old PL&W, from Darlington to New Galilee, was also abandoned then. By 1960 the Y&S had completely dieselized
. After the Penn Central Transportation Company (successor to the NYC and PRR) declared bankruptcy in 1970, the newly-independent profitable P&LE acquired full control of the Montour, and with it the Y&S.
The P&LE's finances declined with those of the steel industry in the 1980s, and CSX Transportation
acquired its main lines in 1991 and 1992. The newly-created PL&W Railroad began operating the Y&S under lease on May 1, 1993, and transferred the lease to the Ohio and Pennsylvania Railroad (O&P), a part of the Ohio Central Railroad System, on June 14, 1995. The Negley-Smiths Ferry line was abandoned in 1996, having gone at least two years without seeing a train, leaving only Youngstown-Darlington for the O&P to operate. The P&LE filed for Chapter 11 bankruptcy on March 22, 1996. When the O&P declined to purchase the leased trackage from the Y&S, the owner sold it to Railroad Ventures, Inc. (RVI) on November 8. RVI immediately, illegally, canceled the lease, forcing the O&P to issue an embargo, a process intended for a temporary cessation of service. After shippers complained, the federal Surface Transportation Board
(STB) investigated, and the O&P and RVI negotiated a new lease agreement in early December. But only two weeks later, the line was washed out by flooding, and the O&P issued a second embargo on December 18.
RVI belatedly filed with the STB for authorization to purchase the line in January 1997, but it was rejected because RVI did not acknowledge its common carrier obligation and the Columbiana County Port Authority (CCPA) alleged that RVI would not provide that service. A second filing in April was approved after RVI agreed to operate the line. RVI did not allow the CCPA to repair the line or carry out any repairs itself, instead filing for abandonment in January 1999 and again in May. CCPA submitted an offer of financial assistance to buy the line in September, and asked the STB to establish its value. The STB penalized RVI for its "blatant disregard of its common carrier obligation to provide service", including several sales and agreements it had made and kept secret. Only 20 days after purchasing the line in 1996, RVI had sold the "debris" (rail
, ties, and ballast
) to a scrap dealer. Later, in October 1999, RVI transferred subsurface and air rights
to an affiliate, Venture Properties of Boardman, Inc. A November 1999 contract with Boardman Township required RVI's successor to pay for grade separation
s, and that month RVI sold a portion of the right-of-way to the Boardman Township Park District. During its ownership of the line, RVI had also allowed it to be paved over at grade crossings and for access to a shopping center partly owned by its CEO. The STB voided RVI's transfers, contracts, and agreements, and ordered RVI to sell the entire railroad property and pay for the necessary repairs. This too proved problematic, when RVI interfered with the escrow fund set up for this purpose, and the STB ordered the money transferred directly to the CCPA in November 2001.
CCPA acquired the line from RVI on January 24, 2001, and the new Central Columbiana and Pennsylvania Railway, a subsidiary of Arkansas Short Line Railroads, Inc., began operations between Youngstown and Boardman Supply in Boardman Township on May 31. On August 31, the entire line was reopened when a CQPA train reached the end in Darlington. Although it had increased its business to serve 9 customers, the CQPA, and its parent Arkansas Short Line Railroads, suffered from cash flow problems, which limited its ability to make repairs to handle the increased traffic, and it filed for bankruptcy in June 2004. The Ohio and Pennsylvania Railroad resumed temporary operations in December 2004, but decided not to continue the lease upon the conclusion of the bankruptcy proceedings. Total Waste Logistics, the line's primary customer, formed the Eastern States Railroad and acquired the lease in November 2006. Simultaneously, the Eastern States Railroad contracted with the Indiana Boxcar Corporation
, which created a new subsidiary, the Youngstown and Southeastern Railroad, to operate the line.
In 2000, when the Railroad Retirement Board
(RRB) reconsidered its determination that RVI was an employer under the Railroad Retirement Act and Railroad Unemployment Insurance Act, it created a three-part test for deciding whether a non-operating lessor, which still retains the residual common-carrier obligation if the lessee ceases operations, is a covered employer. For the company to pass this "Railroad Ventures test", and therefore not be covered, the following must all be true:
Since RVI's primary purpose was to profit from selling off the line, it failed the test. This was a departure from earlier decisions, which had cited a 1989 determination that the Board of Trustees of the Galveston Wharves was not a covered employer to declare any such non-operating company not covered. The test has been applied to declare, for example, the Eastern States Railroad not covered (since it was created to preserve service rather than to profit) and Pennsylvania Lines, LLC covered (since it was wholly owned by Conrail, a for-profit carrier, and thus presumed to be for-profit).
Indiana Boxcar Corporation
The Indiana Boxcar Corporation , based in Connersville, Indiana, United States, provides services such as locomotive leasing to the rail industry...
that operates freight train
Freight train
A freight train or goods train is a group of freight cars or goods wagons hauled by one or more locomotives on a railway, ultimately transporting cargo between two points as part of the logistics chain...
s between Youngstown, Ohio
Youngstown, Ohio
Youngstown is a city in the U.S. state of Ohio and the county seat of Mahoning County; it also extends into Trumbull County. The municipality is situated on the Mahoning River, approximately southeast of Cleveland and northwest of Pittsburgh, Pennsylvania...
and Darlington, Pennsylvania
Darlington, Pennsylvania
Darlington is a borough in Beaver County, Pennsylvania, United States. The population was 299 at the 2000 census.-Geography:Darlington is located at ....
, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The line is owned by the Columbiana County Port Authority, leased to the Eastern States Railroad, which is owned by the line's primary shipper, and contracted out to the YSRR. Freight is interchanged with CSX Transportation
CSX Transportation
CSX Transportation operates a Class I railroad in the United States known as the CSX Railroad. It is the main subsidiary of the CSX Corporation. The company is headquartered in Jacksonville, Florida, and owns approximately 21,000 route miles...
and the Norfolk Southern Railway
Norfolk Southern Railway
The Norfolk Southern Railway is a Class I railroad in the United States, owned by the Norfolk Southern Corporation. With headquarters in Norfolk, Virginia, the company operates 21,500 route miles in 22 eastern states, the District of Columbia and the province of Ontario, Canada...
at the Youngstown end.
The trackage was originally owned by the Youngstown and Southern Railway , which operated from 1904 to 1993, including a period as an electric interurban
Interurban
An interurban, also called a radial railway in parts of Canada, is a type of electric passenger railroad; in short a hybrid between tram and train. Interurbans enjoyed widespread popularity in the first three decades of the twentieth century in North America. Until the early 1920s, most roads were...
passenger railway between 1907 and 1948, being the last such line in Ohio. It was later jointly owned by the Pennsylvania Railroad
Pennsylvania Railroad
The Pennsylvania Railroad was an American Class I railroad, founded in 1846. Commonly referred to as the "Pennsy", the PRR was headquartered in Philadelphia, Pennsylvania....
and Pittsburgh and Lake Erie Railroad
Pittsburgh and Lake Erie Railroad
The Pittsburgh and Lake Erie Railroad , also known as the "Little Giant", was formed on May 11, 1875. Company headquarters were located in Pittsburgh, Pennsylvania. The line connected Pittsburgh in the east with Youngstown, Ohio at nearby Haselton, Ohio in the west and Connellsville, ...
. After a local company bought the line in November 1996 and illegally closed it and blocked repairs, the line was out of service for almost five years until the Central Columbiana and Pennsylvania Railway began operations in May 2001. Service under the YSRR name started in 2006, after the second of two less-than-two-year periods of operation by the Ohio Central Railroad System component Ohio and Pennsylvania Railroad (the first was in 1995 and 1996).
Line description
The YSRR begins in southern Youngstown, where it interchanges with CSX TransportationCSX Transportation
CSX Transportation operates a Class I railroad in the United States known as the CSX Railroad. It is the main subsidiary of the CSX Corporation. The company is headquartered in Jacksonville, Florida, and owns approximately 21,000 route miles...
and the Norfolk Southern Railway
Norfolk Southern Railway
The Norfolk Southern Railway is a Class I railroad in the United States, owned by the Norfolk Southern Corporation. With headquarters in Norfolk, Virginia, the company operates 21,500 route miles in 22 eastern states, the District of Columbia and the province of Ontario, Canada...
adjacent to the Mahoning River
Mahoning River
The Mahoning River is a river located in eastern Ohio and western Pennsylvania. It joins the Shenango River to form the Beaver River and is part of the Ohio River watershed.- Physical properties :...
. It heads northwest up the river bank and then curves southwest to climb a ravine to the highlands of Boardman Township. The original interurban line followed Front Street and South Avenue out of downtown and over the Mahoning River, then a private right-of-way
Right-of-way (railroad)
A right-of-way is a strip of land that is granted, through an easement or other mechanism, for transportation purposes, such as for a trail, driveway, rail line or highway. A right-of-way is reserved for the purposes of maintenance or expansion of existing services with the right-of-way...
between Wabash and Franklin Avenues, joining the present line just east of South Avenue. Beyond Boardman, the line continues through the highlands, crossing the Norfolk Southern Railway
Norfolk Southern Railway
The Norfolk Southern Railway is a Class I railroad in the United States, owned by the Norfolk Southern Corporation. With headquarters in Norfolk, Virginia, the company operates 21,500 route miles in 22 eastern states, the District of Columbia and the province of Ontario, Canada...
's Fort Wayne Line
Fort Wayne Line
The Fort Wayne Line and Fort Wayne Secondary is a rail line owned and operated by the Norfolk Southern Railway , Chicago, Fort Wayne and Eastern Railroad , and CSX Transportation in the U.S. states of Pennsylvania, Ohio, and Indiana...
at Columbiana. As it approaches Signal, where it turns east, and the Pittsburgh, Lisbon and Western Railroad once continued west, it drops into the valley of the Little Bull Creek, which empties into Bull Creek
Bull Creek (Ohio)
Bull Creek is a locational city in the midwestern State of Ohio., It is near Youngstown, Ohio....
before it reaches Negley. From that community, the Smiths Ferry Branch formerly extended south alongside the North Fork and main course of Little Beaver Creek
Little Beaver Creek
The Little Beaver Creek is a wild and scenic area in Ohio. The Little Beaver Creek watershed is located primarily in Columbiana County in northeast Ohio, and in portions of Carroll County, Mahoning County, and western Pennsylvania, draining approximately 605 mi² , of which 503 mi² are in Ohio...
, reaching the Ohio River
Ohio River
The Ohio River is the largest tributary, by volume, of the Mississippi River. At the confluence, the Ohio is even bigger than the Mississippi and, thus, is hydrologically the main stream of the whole river system, including the Allegheny River further upstream...
at Smiths Ferry. The main line continues east from Negley, up the North Fork Little Beaver Creek valley into Pennsylvania, where it ends at Darlington. It formerly continued a short distance farther to the Fort Wayne Line at New Galilee.
History
The Youngstown and Southern Railway (Y&S) and Youngstown and Salem Railroad were both incorporated in May 1903, and the former absorbed the latter in October of that year. It began operations in 1904 as a 16 miles (25.7 km) steam lineSteam railroad
Steam railroad is a term used in the United States to distinguish conventional heavy railroads from street railways, interurban streetcar lines, and other light railways usually dedicated primarily to passenger transport....
between Youngstown and Columbiana, and electrified the line with overhead wires in 1907, also extending it 3 miles (4.8 km) to Leetonia on the Youngstown and Ohio River Railroad
Youngstown and Ohio River Railroad
One of the smaller interurban railways in the state of Ohio was the Youngstown and Ohio River Railroad, or Y&OR. Along with the Youngstown and Southern Railway, the Y&OR formed a traction link between Youngstown, Ohio and the Ohio River at East Liverpool...
(Y&OR) that year. In addition to carrying passengers as an interurban railway, the company handled freight
Freight train
A freight train or goods train is a group of freight cars or goods wagons hauled by one or more locomotives on a railway, ultimately transporting cargo between two points as part of the logistics chain...
, primarily coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
from the electric Y&OR and the steam Pittsburgh, Lisbon and Western Railroad (PL&W). After the Y&S entered receivership
Receivership
In law, receivership is the situation in which an institution or enterprise is being held by a receiver, a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights." The receivership remedy is an equitable remedy that emerged in...
in 1915, a 1916 reorganization produced the Youngstown and Suburban Railway.
In the late 1920s and early 1930s, Mahoning Valley
Mahoning Valley
The Mahoning Valley is a geographic valley encompassing the area of northeast Ohio and northwest Pennsylvania that drains into the Mahoning River. The Mahoning River empties into the Beaver River, which empties into the Ohio River. The Mahoning River flows through Lawrence and Mercer counties in...
industries and the Pittsburgh Coal Company
Pittsburgh Coal Company
The Pittsburgh Coal Company was a bituminous coal mining company, controlled by the Mellon family. It later merged with Consolidation Coal Company, controlled by the Rockefeller family.-Coal Mines:...
attempted to build a new rail line between the Ohio River
Ohio River
The Ohio River is the largest tributary, by volume, of the Mississippi River. At the confluence, the Ohio is even bigger than the Mississippi and, thus, is hydrologically the main stream of the whole river system, including the Allegheny River further upstream...
and Youngstown, claiming that the existing railroad connections (Pittsburgh and Lake Erie Railroad
Pittsburgh and Lake Erie Railroad
The Pittsburgh and Lake Erie Railroad , also known as the "Little Giant", was formed on May 11, 1875. Company headquarters were located in Pittsburgh, Pennsylvania. The line connected Pittsburgh in the east with Youngstown, Ohio at nearby Haselton, Ohio in the west and Connellsville, ...
and Pennsylvania Railroad
Pennsylvania Railroad
The Pennsylvania Railroad was an American Class I railroad, founded in 1846. Commonly referred to as the "Pennsy", the PRR was headquartered in Philadelphia, Pennsylvania....
) refused to build suitable river transfer facilities. The Interstate Commerce Commission
Interstate Commerce Commission
The Interstate Commerce Commission was a regulatory body in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including...
denied the application in exchange for the construction of these facilities. Later the coal company built a private railroad from the river at Smiths Ferry, Pennsylvania to the PL&W at Negley, Ohio
Negley, Ohio
Negley is a census-designated place in northeastern Middleton Township, Columbiana County, Ohio, United States. Although it is unincorporated, it has a post office, with the ZIP code of 44441. It lies along State Route 154....
, where it connected to Youngstown through control, by its Montour Railroad
Montour Railroad
Montour Railroad is a former short line railroad company operating passenger and freight service on standard gauge track in southwestern Pennsylvania...
subsidiary, of the PL&W (New Galilee, Pennsylvania
New Galilee, Pennsylvania
New Galilee is a borough in Beaver County, Pennsylvania, United States. The population was 424 at the 2000 census.-Geography:New Galilee is located at ....
to Lisbon, Ohio
Lisbon, Ohio
Lisbon is a village in Center Township, Columbiana County, Ohio, United States. The population was 2,788 at the 2000 census. It is the county seat of Columbiana County.-History:...
) and Y&S (the latter acquired in 1928), and construction of a line between the PL&W at Signal and the Y&S at Columbiana. (The PL&W from Signal west to Lisbon was subsequently abandoned.) Large amounts of coal were shipped along the river from the mines to Smiths Ferry, and then over the rail line to Youngstown steel mill
Steel mill
A steel mill or steelworks is an industrial plant for the manufacture of steel.Steel is an alloy of iron and carbon. It is produced in a two-stage process. First, iron ore is reduced or smelted with coke and limestone in a blast furnace, producing molten iron which is either cast into pig iron or...
s. The Y&S changed its name back to Youngstown and Southern Railway in 1944, and on January 1, 1945 it merged the PL&W into itself.
After World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the Consolidated Coal Company, successor to the Pittsburgh Coal Company, decided to sell its railroad properties to the Pennsylvania Railroad (PRR). The PRR agreed to purchase the Montour, and with it the Y&S, jointly with the Pittsburgh and Lake Erie Railroad
Pittsburgh and Lake Erie Railroad
The Pittsburgh and Lake Erie Railroad , also known as the "Little Giant", was formed on May 11, 1875. Company headquarters were located in Pittsburgh, Pennsylvania. The line connected Pittsburgh in the east with Youngstown, Ohio at nearby Haselton, Ohio in the west and Connellsville, ...
(P&LE), a subsidiary of the New York Central Railroad
New York Central Railroad
The New York Central Railroad , known simply as the New York Central in its publicity, was a railroad operating in the Northeastern United States...
(NYC). The two companies gained control on December 31, 1946, and simultaneously conveyed the private railroad south of Negley to the Y&S. Passenger service ended in 1948 on the Y&S, the last of Ohio's interurbans, and the Columbiana-Leetonia segment was abandoned that year, its connection to the Y&OR being long-gone. The eastern end of the old PL&W, from Darlington to New Galilee, was also abandoned then. By 1960 the Y&S had completely dieselized
Diesel locomotive
A diesel locomotive is a type of railroad locomotive in which the prime mover is a diesel engine, a reciprocating engine operating on the Diesel cycle as invented by Dr. Rudolf Diesel...
. After the Penn Central Transportation Company (successor to the NYC and PRR) declared bankruptcy in 1970, the newly-independent profitable P&LE acquired full control of the Montour, and with it the Y&S.
The P&LE's finances declined with those of the steel industry in the 1980s, and CSX Transportation
CSX Transportation
CSX Transportation operates a Class I railroad in the United States known as the CSX Railroad. It is the main subsidiary of the CSX Corporation. The company is headquartered in Jacksonville, Florida, and owns approximately 21,000 route miles...
acquired its main lines in 1991 and 1992. The newly-created PL&W Railroad began operating the Y&S under lease on May 1, 1993, and transferred the lease to the Ohio and Pennsylvania Railroad (O&P), a part of the Ohio Central Railroad System, on June 14, 1995. The Negley-Smiths Ferry line was abandoned in 1996, having gone at least two years without seeing a train, leaving only Youngstown-Darlington for the O&P to operate. The P&LE filed for Chapter 11 bankruptcy on March 22, 1996. When the O&P declined to purchase the leased trackage from the Y&S, the owner sold it to Railroad Ventures, Inc. (RVI) on November 8. RVI immediately, illegally, canceled the lease, forcing the O&P to issue an embargo, a process intended for a temporary cessation of service. After shippers complained, the federal Surface Transportation Board
Surface Transportation Board
The Surface Transportation Board of the United States is a bipartisan, decisionally-independent adjudicatory body organizationally housed within the U.S. Department of Transportation. The STB was established in 1996 to assume some of the regulatory functions that had been administered by the...
(STB) investigated, and the O&P and RVI negotiated a new lease agreement in early December. But only two weeks later, the line was washed out by flooding, and the O&P issued a second embargo on December 18.
RVI belatedly filed with the STB for authorization to purchase the line in January 1997, but it was rejected because RVI did not acknowledge its common carrier obligation and the Columbiana County Port Authority (CCPA) alleged that RVI would not provide that service. A second filing in April was approved after RVI agreed to operate the line. RVI did not allow the CCPA to repair the line or carry out any repairs itself, instead filing for abandonment in January 1999 and again in May. CCPA submitted an offer of financial assistance to buy the line in September, and asked the STB to establish its value. The STB penalized RVI for its "blatant disregard of its common carrier obligation to provide service", including several sales and agreements it had made and kept secret. Only 20 days after purchasing the line in 1996, RVI had sold the "debris" (rail
Rail tracks
The track on a railway or railroad, also known as the permanent way, is the structure consisting of the rails, fasteners, sleepers and ballast , plus the underlying subgrade...
, ties, and ballast
Track ballast
Track ballast forms the trackbed upon which railway sleepers or railroad ties are laid. It is packed between, below, and around the ties. It is used to facilitate drainage of water, to distribute the load from the railroad ties, and also to keep down vegetation that might interfere with the track...
) to a scrap dealer. Later, in October 1999, RVI transferred subsurface and air rights
Air rights
Air rights are a type of development right in real estate, referring to the empty space above a property. Generally speaking, owning or renting land or a building gives one the right to use and develop the air rights....
to an affiliate, Venture Properties of Boardman, Inc. A November 1999 contract with Boardman Township required RVI's successor to pay for grade separation
Grade separation
Grade separation is the method of aligning a junction of two or more transport axes at different heights so that they will not disrupt the traffic flow on other transit routes when they cross each other. The composition of such transport axes does not have to be uniform; it can consist of a...
s, and that month RVI sold a portion of the right-of-way to the Boardman Township Park District. During its ownership of the line, RVI had also allowed it to be paved over at grade crossings and for access to a shopping center partly owned by its CEO. The STB voided RVI's transfers, contracts, and agreements, and ordered RVI to sell the entire railroad property and pay for the necessary repairs. This too proved problematic, when RVI interfered with the escrow fund set up for this purpose, and the STB ordered the money transferred directly to the CCPA in November 2001.
CCPA acquired the line from RVI on January 24, 2001, and the new Central Columbiana and Pennsylvania Railway, a subsidiary of Arkansas Short Line Railroads, Inc., began operations between Youngstown and Boardman Supply in Boardman Township on May 31. On August 31, the entire line was reopened when a CQPA train reached the end in Darlington. Although it had increased its business to serve 9 customers, the CQPA, and its parent Arkansas Short Line Railroads, suffered from cash flow problems, which limited its ability to make repairs to handle the increased traffic, and it filed for bankruptcy in June 2004. The Ohio and Pennsylvania Railroad resumed temporary operations in December 2004, but decided not to continue the lease upon the conclusion of the bankruptcy proceedings. Total Waste Logistics, the line's primary customer, formed the Eastern States Railroad and acquired the lease in November 2006. Simultaneously, the Eastern States Railroad contracted with the Indiana Boxcar Corporation
Indiana Boxcar Corporation
The Indiana Boxcar Corporation , based in Connersville, Indiana, United States, provides services such as locomotive leasing to the rail industry...
, which created a new subsidiary, the Youngstown and Southeastern Railroad, to operate the line.
In 2000, when the Railroad Retirement Board
Railroad Retirement Board
The U.S. Railroad Retirement Board is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program providing retirement benefits to the country's railroad workers....
(RRB) reconsidered its determination that RVI was an employer under the Railroad Retirement Act and Railroad Unemployment Insurance Act, it created a three-part test for deciding whether a non-operating lessor, which still retains the residual common-carrier obligation if the lessee ceases operations, is a covered employer. For the company to pass this "Railroad Ventures test", and therefore not be covered, the following must all be true:
- The primary business purpose of the company is not to profit from railroad activities.
- The company does not operate its line or retain that capacity.
- The operator of the line is or would be a covered employer.
Since RVI's primary purpose was to profit from selling off the line, it failed the test. This was a departure from earlier decisions, which had cited a 1989 determination that the Board of Trustees of the Galveston Wharves was not a covered employer to declare any such non-operating company not covered. The test has been applied to declare, for example, the Eastern States Railroad not covered (since it was created to preserve service rather than to profit) and Pennsylvania Lines, LLC covered (since it was wholly owned by Conrail, a for-profit carrier, and thus presumed to be for-profit).