The CORP Switchyard in Roseburg

When the Central Oregon and Pacific Railroad (CORP) shut down the Coos Bay Line without notice, ODOT countered by suspending a $7.7 million Connect Oregon grant to replace the CORP switchyard in Roseburg with one just up the road in Winchester (previous blog here).  But now that the battle over control of the Line is wrapping up (previous blog here), what happens to that grant?

This week, the Oregon Transportation Commission scheduled a vote to consider rescinding the grant altogether, which would mean RailAmerica blew the $4 million in construction costs it already spent on the Winchester switchyard and there’d be no solution to the congestion problems in downtown Roseburg, which happen when the railroad switches railcars in its yard.

In a staff memo prepared for Thursday’s commission meeting, the state included as background that “the request is made because the basis upon which the grant was reviewed and approved by the commission no longer exists, and may not have existed at the time of approval … this is no longer a viable project and the agreement should be terminated and the grant approval rescinded.”

That prospect drew a dire response from public officials in Douglas County — who said the project is very much viable and necessary — and a breach of contract lawsuit from the railroad, which argued the state doesn’t have the right to suspend or pull the grant.

I can definitely understand why officials in Roseburg are upset.  The town is a mess to get around for multiple reasons, including that undersized switchyard which regularly snarls traffic.     

Under the terms, the state agreed to provide 80 percent of the funding for the construction of the Winchester freight yard, with capacity for 294 railcars, and CORP was to kick in 20 percent in matching funds.

Per its end of the bargain, CORP bought the 28-acre property and all the materials necessary to build the 11-track yard, including rock ballast, ties, switches, rail and other track material, according to the railroad’s lawsuit, at a cost of more than $4 million.

...

CORP’s lawsuit contends the state doesn’t have grounds to yank the grant.

Though a staff memo to the transportation commission suggested the action was warranted because the project is no longer necessary, [Roseburg City Manager] Swanson suspects another reason: so the state can funnel the money to the Coos Bay port.

“Clearly, the attempt is to make some funding available to purchase the Coos Bay line,” Swanson said. “We think the Coos Bay line is a worthy proposal and needs to move forward as well. But (Winchester) is still a benefit to our community from an economic development perspective.”

We know money is getting tight in Salem.  State agencies are having to look at a potential 5 percent cut, which is magnified by the fact that we're almost three-quarters of the way through our biennial budget.  And obviously the economy isn't helping revenue projections for the next budget. 

On Thursday, after learning of CORP’s lawsuit and hearing from Swanson and the president of Roseburg’s chamber of commerce, the transportation commission tabled a decision about the grant money, said Patrick Cooney, a spokesman for the Oregon Department of Transportation. There’s no date scheduled to reconsider the issue.

I sure can't see how ODOT could reasonably assert that the project is no longer necessary.