State slows plan to wrest control of rail line as owner looks to sell

Iowa Pacific previously stored oil tank cars on tracks in Adirondacks

New York state has slowed efforts to wrest control of an Adirondack rail line that was being used to store old railroad oil tank cars now that the line’s Chicago-based owner might be selling it.

Last week, the U.S. Surface Transportation Board agreed to a 90-day postponement of the state’s request that the Saratoga & North Creek rail line be considered legally abandoned for purposes of hauling freight.

The pause will give time for the line’s owner, Iowa Pacific Holdings, to continue talks with another company, Denverbased freight hauler Omnitrax, which has expressed interest publicly in buying the 30-mile line, which runs from Tahawus in the Adirondacks High Peaks to North Creek in Warren County.

DEC had launched the abandonment effort, which would block Iowa Pacific from using the tracks, while still preserving the tracks, in late 2017. That step came after Iowa Pacific had used parts of the line to store dozens of obsolete oil tank cars, which drew vocal opposition from the state, local officials and environmental groups.

Amid the criticism, the company began moving out the tankers this summer, and now all are gone.

On Monday, the DEC press office stated: “As part of the acquisition, Omnitrax intends to enter into a binding agreement with DEC that prohibits long-term rail car storage on the line. DEC made a request to stay the (STB) proceeding in order to allow time to negotiate this agreement with Omnitrax.”

Iowa Pacific has owned the line since 2011 and for much of that time operated passenger trains as far as North Creek. Omnitrax would use the line to remove tailings from the Tahawus mine at the north end of the of the line that could be used in road construction and other infrastructure projects.

The line connects southward with a line owned by Warren County and the town of Corinth. The Saratoga and North Creek railroad stopped operations this year due to financial problems.

Omnitrax did not provide a response in time for this story.

“We support a 90-day extension to continue these talks,” said John Sheehan, a spokesman for the Adirondack Council, an environmental group that opposed the oil tanker storage. “Should these talks not bear fruit, we would support continuation on the state’s efforts to have the line declared abandoned, after which there would be a discussion on what the future of the line should be.”

Sheehan said an abandonment ruling would not require that the tracks be removed.