Never let a good rail merger go to waste

When large U.S. freight railroads seek federal regulatory approval to merge, stakeholders including shippers, competitors and state and local governments typically demand concessions in exchange for their support — even stakeholders that have little to lose.

Such is the case with Amtrak's announced support of the proposed Canadian Pacific Rail (CPR)-Kansas City Southern (KCS) merger, which will connect CPR's Minnesota, Upper Midwest and Canadian prairie province network with KCS's Texas and Louisiana routes at Kansas City.

Amtrak, which uses CPR tracks between the Twin Cities and Chicago but has no KCS operations, will be unaffected by this merger. But that hasn't stopped it from seeking concessions from CPR, which readily complied by permitting Amtrak to operate post-merger over KCS's tracks between Baton Rouge and New Orleans.

This would not have happened otherwise, as the route today is congested with slow-moving, highly profitable chemical, agricultural and hazardous materials freight traffic that will create operating havoc with the high-speed Amtrak trains. Yet, disruptive and costly as this will be, CPR somehow deemed it worthwhile to gain Amtrak support.

One can only wonder, then, what CPR would offer a stakeholder facing tangible, merger-driven losses.

Turns out, there is such a stakeholder — and it is us. The Twin Cities economy will take a $15 million annual payroll hit when CPR consolidates its U.S. headquarters in Kansas City and vacates its downtown Minneapolis office building. Given this impact, local civic interests should seek offsetting restitution, ideally through the sustainable redevelopment of local CPR properties of diminishing commercial value to the railroad. Three such properties in Minneapolis and St. Paul come to mind:

The Highland Park Spur, an idle 3.5-mile right of way connecting St. Paul's West End and Highland Park districts, whose tracks once served the shuttered Ford plant. It has significant redevelopment potential due to its neighborhood connectivity, a uniformly wide pathway parallel to arterial roadways and proximity to MSP airport and the Mississippi River.

The Greenway Extension Spur, a 2.6-mile east-west pathway connecting the Hiawatha Industrial Spur at Lake Street with the CPR main line in St. Paul via the Short Line Bridge over the Mississippi River. Repurposed, it would be the key link in a transformative trail/transit network that would extend the popular Midtown Greenway into St. Paul's Midway district and beyond.

Converting these declining freight rights of way into public assets more compatible with evolving trackside land use will turn 70 acres of scarce urban corridor real estate into bike/hike trail extensions, off-street transitways, utility easements, green space and strategically placed roadways offering congestion and emissions relief to traffic-challenged locales like St. Paul's emerging Highland Bridge development.

The cost of doing nothing could be steep, should CPR's post-merger Kansas City-based real estate contractors exploit this area's red-hot property market and sell off in piecemeal fashion key parcels of these corridors, thereby frustrating the public benefits outlined above. How steep? Consider the $100 million cost for that half-mile long, "shallow tunnel" needed to complete Met Council's Southwest Light Rail project through the Cedar Lake area of Minneapolis because part of the original, much wider, right of way was sold to a townhouse developer in the 1970s following, yes, a railroad merger.

Twin Cities civic and political leaders should act now to acquire ownership and control of these underperforming CPR pathways, given the unique and fleeting negotiating leverage at their disposal. Leverage matters, as Met Council has also learned from its failed negotiations with another freight railroad to allow its Blue Line extension trains to run over an underperforming freight corridor serving the northwest suburbs.

That railroad said "no" simply because it could. Don't let this railroad say "no" simply because we won't ask.