Mendocino County Skunk Train denied right to use eminent domain

[BCL]

It sounds like it came down to whether or not they (as a Class III tourist railroad) were a "public utility" in the eyes of the California Public Utilities Commission. They tried to use their status as a Class III railroad previously but they then tried to acquire about 20 acres to build a loading area and were denied by a judge. But it sounds like the two properties they bought in 2021 were from willing sellers, although they did hold eminent domain in their back pocket.

https://mendovoice.com/2021/12/gp-m...nk-train-has-acquired-through-eminent-domain/​

Mendocino Railway, which owns and operates the Skunk Train, succeeded in taking two properties in Fort Bragg through eminent domain this fall using its status as a Class III railroad — the 272-acre Georgia-Pacific mill site for over a million and another property adjacent to its rail operations for $155,000. Georgia-Pacific itself approached the railway company about completing the transaction for the beachfront property, said Robert Pinoli, CEO of Mendocino Railway. A Georgia-Pacific representative wasn’t immediately available for comment.​

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As far as the other eminent domain case, the owner was happy with the transaction because the property, which abuts the railroad tracks, had become a site of drug use and homeless encampments. The single-family house on the property had also burnt down. Pinoli said the company has fully remediated the area where the house was destroyed since taking over the land in February. “The city, for nearly a decade, had done nothing about it,” Pinoli said. “They could’ve taken the property, but literally the problems would spill over the hillside onto the railroad’s property so the city actually encouraged us to take that property.”​

This was from last year where a judge officially ruled that they weren't a public utility.

https://www.kzyx.org/2023-04-24/judge-declares-skunk-train-not-a-public-utility-no-eminent-domain​

In her decision this week, Nadel wrote, “The central issue in this case is whether MR (Mendocino Railway) can be deemed a public utility for purposes of this eminent domain proceeding.” A railroad corporation that is a public utility does have the right to claim private property for public benefit, if it can fairly compensate the property owner.​

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Nadel mentioned several times that 90% of Mendocino Railway’s revenue comes from its tourism offerings. She wrote, “The court can easily find that MR’s primary objective is to obtain the property to serve the excursion service. No explanation was offered to distinguish the private operations from the “proposed” freight and passenger enhancements,” which could have qualified the railway as a public utility.​

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But the Skunk Train doesn’t offer transportation, according to the legal definition of the term. Nadel noted that previous court decisions have defined transportation, “in the public utility context,” as taking people from one place to another. The Skunk Train is only able to take passengers on round trips, due to a tunnel collapse on the line between Willits and Fort Bragg. And it’s not able to connect to any line outside of Mendocino County. Last year, the Surface Transportation Board authorized the Great Redwood Trail Agency to turn the line between Willits and Eureka into a trail. The last time any freight car left the county by train was the day before Thanksgiving, 1998.​

They're asking for the judge to reconsider. They're trying to get the judge to consider them to be a common carrier on the basis that they might be able to transport freight, but I'm thinking that they're not going to be able to overcome that they're trying to build this property to build facilities for their tourist railroad operations only.

https://www.pressdemocrat.com/artic...to-consider-new-facts-in-willits-eminent-dom/​

Nadel also noted the absence of freight and passenger service beyond the nonqualifying excursion runs. She also said that the railroad’s initial plans for the Meyer property were meant to benefit the private business of the company, not the public good.​

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Meyer said he was worried about the new motions because it means more proceedings and lawyers fees, as well as delays before the matter is finalized.​

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Though Nadel’s final judgment entitled him to recover an estimated $250,000 in legal expenses incurred over what so-far is 2½ years of litigation, the case now “could drag on for who knows how long,” Meyer said.​

 

[Anderson]

I think the judge is probably right on this one - if they could connect somewhere to offer one-way trips (or round-trips with a significant stopover), that would be one thing. But at this point they're a painfully isolated line with no concrete plans to change that status.

 

[Everydaymatters]

The next time you are on the expressway into Chicago, take a look at the McDonalds up on the overpass. That is on land that was bought by eminent domain. Well, maybe because is isn't technically "land", it was given a pass.

 

[BCL]

The next time you are on the expressway into Chicago, take a look at the McDonalds up on the overpass. That is on land that was bought by eminent domain. Well, maybe because is isn't technically "land", it was given a pass.

Can't find anything about that. There was the "Skyway McDonald's" that was built next to a toll plaza for some reason. But that's closed.

I found this one in Oklahoma:

 

[MARC Rider]

Can't find anything about that. There was the "Skyway McDonald's" that was built next to a toll plaza for some reason. But that's closed.

I found this one in Oklahoma:

That looks exactly like the rest areas on the I-90 Tollway northwest of Chicago. In any event, I would think that the acquisition of land for most rest areas built for freeways are a pretty routine example of eminent domain. The land is purchased as an integral part of the highway. This includes the rest areas on toll roads that have commercial facilities, like a McDonald's. You think that the McDonald's Corporation or its franchisees own the land and building where the store is located? Of course not, the land and building is owned by the state and the commercial operator is a tenant or a concessionaire. So there is no case of a non-governmental entity using eminent domain to force a sale of somebody's property.

 

[BCL]

That looks exactly like the rest areas on the I-90 Tollway northwest of Chicago. In any event, I would think that the acquisition of land for most rest areas built for freeways are a pretty routine example of eminent domain. The land is purchased as an integral part of the highway. This includes the rest areas on toll roads that have commercial facilities, like a McDonald's. You think that the McDonald's Corporation or its franchisees own the land and building where the store is located? Of course not, the land and building is owned by the state and the commercial operator is a tenant or a concessionaire. So there is no case of a non-governmental entity using eminent domain to force a sale of somebody's property.

There have definitely been cases of eminent domain (or the threat of it) being used by public entities to acquire land to hand over to private developers. It might be a little bit different though since it's about clearly public entity exercising the authority and not a private company. This piece was from nearly 60 years ago.

https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1897&context=dlj
But railroads have a specific power as (mostly) private entities allowed to use eminent domain to provide service as a public good. This is in both federal and state law. The whole idea is that freight and passenger traffic are considered a public service. And the kicker is that they've also been able to profit off of the land for more than just rail traffic. They make a lot of money from utility lines going through railroad rights of way.

 

[railiner]

And the kicker is that they've also been able to profit off of the land for more than just rail traffic. They

That’s for sure! Just look up the history of any of the “Land Grant” railroads, where the government not only granted them the right of way to build the railroad, but alternating large sections of land on either side. The government, as well as the railroad, profited nicely from the vastly increased value of this land as a result of the railroads arrival.

 

[BCL]

That’s for sure! Just look up the history of any of the “Land Grant” railroads, where the government not only granted them the right of way to build the railroad, but alternating large sections of land on either side. The government, as well as the railroad, profited nicely from the vastly increased value of this land as a result of the railroads arrival.

I believe the large majority of federal land grants to the railroads were to build the Transcontinental Railway over 150 years ago. But that's pretty apparent in maps and satellite images. I don't believe the most of this land was necessarily granted for railroads to build tracks, but rather granted for them to own and potentially sell. And it sounds like they sold a lot of these to timber companies and farmers. Much of this was in the form of checkerboard patterns where the federal government kept alternate 1 square mile plots.

 

[MARC Rider]

I believe the large majority of federal land grants to the railroads were to build the Transcontinental Railway over 150 years ago. But that's pretty apparent in maps and satellite images. I don't believe the most of this land was necessarily granted for railroads to build tracks, but rather granted for them to own and potentially sell. And it sounds like they sold a lot of these to timber companies and farmers. Much of this was in the form of checkerboard patterns where the federal government kept alternate 1 square mile plots.

I think the original transcontinental railroads may have made more money selling land from their grants than they did running trains. The whole project was originally funded by the Feds, who sold government bonds and reimbursed the Union Pacific and Central Pacific with loans for the construction cost (in addition to the land grants). I'm not sure about the Central Pacific, but the Union Pacific was involved in a major scam called the Credit Mobilier scandal. The crooks got control of the Union Pacific and then also started and controlled a construction company called Credit Mobilier which the Union Pacific contracted to actually do the construction. Credit Mobilier grossly overbilled Union Pacific, with the crooks, of course, skimming off the difference. It became a really big scandal because some congressmen were the recipients of gifts of shares in Credit Mobilier. I think in the end all of the loans from the government to Union Pacific got paid back, but the shareholders and investors in the Union Pacific company (unless they were in the know and also had shares in Credit Mobilier) were screwed, and I think the Union Pacific actually went bankrupt for a while. All in all, the whole thing displayed the worst aspects of both socialism and capitalism. It shows the deep cultural origins of this country's inability to build large infrastructure projects at reasonable costs.

 

[GDRRiley]

Kinda hard to make money as a freight carrying railroad when you've been cut off from the national network
Work to get to cloverdale is going to start soon but that still leaves a 55mi gap
now maybe they could do the most minor work and get the last 55mi to class 2 standards but I don't see that happening without some big customers willing to ship via rail and with UP at the other end god luck

 

[Devil's Advocate]

Sounds like the Mendocino Railway needs to hire the Bayside Canadian Railway as a consultant on bureaucratic manipulation.

 

[Alice]

The current issues of the Skunk being a tourist attraction date back to a court decision that flabbergasted me at the time. I think it was probably in the 70s but I didn't look this up.

The lumber company that owned the tracks and adjacent land between Willits and Fort Bragg had granted a bunch of 99 year leases for cabins along their lumber road (the truck road). On the tracks they ran freight weekdays and tourists on weekends. They also had a mail contract.

Over the years, those lightly used cabins were enlarged by many of the owners into full-time residences (looking like log mansions to me) with considerable car traffic by families and guests. This created a conflict on the truck road, a one-lane somewhat curvy 55mph dirt road where traffic was handled by a dispatch similar to trains. You can see where this works with occasional civilian traffic but became a problem for the logging trucks.

The logging company did not renew the leases when they ended, the cabin owners sued, and the court sided against the trucking company. This put a big dent in their logging business at the time. Government decisions later probably would have finished them off anyway as it has many of the other redwood logging here.

I believe two different tourist lines have tried operating the train. That was working until one of the tunnels collapsed and the tourist line could not raise funds from donors, and couldn't get a government or corporate grant. (They tried all three.)

 

[Alice]

Kinda hard to make money as a freight carrying railroad when you've been cut off from the national network
Work to get to cloverdale is going to start soon but that still leaves a 55mi gap
now maybe they could do the most minor work and get the last 55mi to class 2 standards but I don't see that happening without some big customers willing to ship via rail and with UP at the other end god luck

The lumber railroad ran redwood logs to the mill near Fort Bragg, which is also a seaport. The mill closed with most of the others in California maybe 20 years or so ago.

 

[GDRRiley]

The lumber railroad ran redwood logs to the mill near Fort Bragg, which is also a seaport. The mill closed with most of the others in California maybe 20 years or so ago.

Theres a few left in Ukiah and other places but yeah most of the original key traffic on the old NWP now SMART main has dried up meaning rail back to California Western Railroad is going to be a while if ever

 

[BCL]

This was a couple of weeks ago, but here's an update.

https://www.pressdemocrat.com/artic...to-set-aside-ruling-against-skunk-train-owne/​

The railway claims it has authority as a public utility to acquire the property at a fair price for the greater public good.​

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But Nadel disputed their claim, saying it is unsupported by the railway’s function as an excursion train. She said a tunnel collapse outside Fort Bragg has precluded it since 2015 even from running the full length of the track between Fort Bragg and Willits, preventing its use for freight hauling, even if there was demand.​

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There were no indications of passenger travel either, beyond the out-and-back runs from each end of the line popular to tourists, she said.​

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Nadel also said there were no contracts, papers or other evidence to support Block’s assertion that the Mendocino Railway’s sister company, Northern Sierra Railroad, managed the freight operations sufficient to fulfill the railway’s obligations as a common carrier up until January 2022, when the railway took over.​

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Nadel also pointed to the railway’s early conception of creating a campground and RV park, along with a train station, at the park. The railway and its president, Robert Pinoli, said only last year the property was needed for maintenance and repair facilities, a rail yard, cargo transfer facilities, and office and train platform, she wrote.​

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In seeking to reopen arguments in the case, Block had offered as new evidence a May 2 letter from the U.S. Railroad Retirement Board received by Mendocino Railway after Nadel released her initial decision. He said it confirms the railway is an authentic, federally regulated common carrier and contradicts another letter from the same body offered at trial.​

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But Block finally said Friday, “Nothing I can say will change the court’s mind,” noted his objections were on the record, and the hearing was over.​

The article includes a link to the California PUC letter confirming that they considered the Skunk Train to be a regulated Class III railroad but not a public utility.

https://srp-prod-public-pdfs.s3-us-west-2.amazonaws.com/mw67MIZ556YgUfd0EHexvr3obww.pdf