Committee Starts Exclusive Negotiations with Progressive Rail

Potential propane terminal in Watsonville raises concerns

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In the next year, Santa Cruz County residents can expect changes to the rail corridor that stretches from Davenport to Watsonville. What these changes entail however, is still unknown.

The Santa Cruz County Regional Transportation Commission (SCCRTC), an agency made up of representatives from the county, cities in the county and CalTrans, is responsible for deciding the future of Santa Cruz Branch Line railway. Currently, the commission is in exclusive negotiations with a new rail operator, Progressive Rail (PGR) to discuss pricing and payment methods.

Constructed in 1876, the Santa Cruz Branch Line railway stretches from Davenport to Watsonville. Now, barely one-third of the line remains functional. For the past few years, community members have debated what the future of the railway should look like. Debate has mostly centered on whether a pedestrian and bike trail and railway would operate next to each other or if only a trail would be built — but now questions have been raised regarding the potential new rail operator.

“The trail is absolutely going to happen. That’s a commitment we already made. The only question is maintenance with the rail line in addition to the trail,” said SCCRTC member and Santa Cruz City Council member Sandy Brown.

The SCCRTC is now considering working with PGR after a sudden end to an existing contract with Iowa Pacific, the original rail operator the committee chose in 2012. In December 2017, Iowa Pacific announced it would be pulling out of its 10-year agreement due to severe washout of the tracks  after storms last season that left only the eastern side of the rail in Watsonville operational.

Because the SCCRTC used about $11 million from Proposition 116 (Clean Air and Transportation Act) to purchase the rail corridor, the federal agency Surface Transportation Board is requiring the SCCRTC to find a new rail operator as soon as possible.

After evaluating five other proposals, the SCCRTC chose to begin private negotiations with PGR because their proposal was most optimal for maintaining the rail, according to Brown.

The negotiations with PGR recently shifted conversations toward environmental and safety concerns as well as the company’s history.

“Some of the things I’ve heard about how they do business and what happens to the community, as a result, gives me great pause with bringing [PGR] into our community” said Gail McNulty, the executive director for the local organization Greenway, which advocates for environmentally friendly transportation routes.

PGR’s proposal to work in California would mark its farthest expansion from its original location in Lakeville, Minnesota. Residents of Lakeville have had complaints of PGR storing cars behind residential neighborhoods for several years, according to multiple Lakeville residents.

“Progressive rail has stored rail cars behind our homes. A couple hundred cars going on approximately seven and a half to eight years,” said Pam Stieghan who runs a daycare from her house in Lakeville. “It started out with ethanol tankers and progressed to open cars. We tried to get them moved and get a city resolution, but found out they are federally protected and have leased the tracks.”

PGR’s proposal intends for freight transportation to start on the east end of the corridor in Watsonville. The company is also interested in building a potential propane distribution terminal, which is a point of controversy for community members.

Although PGR has no recorded accidents at their other locations across the nation when transporting propane, Santa Cruz residents are still concerned with propane transportation because of the possibility of dangerous spills and explosions.

Propane must be transported in a pressurized containers which, if punctured, can result in a flash fire due to aerosolized liquid coming into contact with an oxygen-rich environment. These flash fires are not common — only 12 occurred worldwide in the past five years — but are extremely dangerous.

The SCCRTC can negotiate with PGR on the decision to build the propane terminal with energy company Lansing Trading. The propane terminal would be used to store and load propane into the tankards for transport. SCCRTC can also opt to not permit any propane terminals.

PGR would also work with the county to further expand to the rest of the corridor as they repair the tracks for future tourist attraction trains, according to PGR director of public affairs Jason Culotta.

“[Building the propane terminal] comes down to the agreement that will be reached between the commission and the railroad and we don’t know what that will look like yet,” Culotta said. “[Lansing Trading] was one of the businesses we suggested would be interested coming into the area.”

Residents asked the board to slow down negotiations until the SCCRTC’s Unified Corridor Investment Study, which assesses traffic flow of primary entryways into the county, was scheduled to finish in December 2018. But as the SCCRTC is obliged by the state to find a new rail operator as soon as possible, it is under pressure to move forward with the project.

Although the SCCRTC board already began contract negotiations with PGR, the committee announced that no contract will be finalized until a later date. Though the new rail operator must be appointed, it is still possible to discuss  having a trail only instead of a rail-trail combination in the future. The SCCRTC will be hosting a meeting on March 15 with more information.