Extension filed to save rail line

An Oklahoma-based short-line railroad company has asked the U.S. Surface Transportation Board for an extension of time to file an offer to buy an historic railroad line along the New River in Anderson County that its current owner wants to abandon and remove.

Arkansas-Oklahoma Railroad Co. of Wilburton, Oklahoma, filed its request for an extension with the STB on the deadline date, June 3, and that filing was challenged on June 4 by Nicholasville, Kentucky-based R.J. Corman, current owner of the line.

The 42-mile scenic and historic line runs along the river from Fork Mountain in remote western Anderson County to Oneida, but has not been used since National Coal Corp. stopped operating a deep mine in the Fork Mountain area in May 2013.

If Corman has its way, the rail line might soon be scrapped and turned into a hike-and-bike trail. Arkansas-Oklahoma Railroad wants to restore and reopen the line to carry tourist excursion trains and possibly coal from the vast reserves still available in the area.

Anderson County Mayor Terry Frank is helping lead an effort to save the line, which was started in the late 19th century to haul timber and coal out of rural Anderson County. On June 4, she filed a letter with the STB in support of Arkansas-Oklahoma Railroad’s request for an extension.

Frank said in her letter that the North East Tennessee Railroad Authority, comprising the counties of Anderson, Scott and Campbell through which the line runs, plans to meet electronically Tuesday, June 16, to discuss ways to assist Arkansas-Oklahoma Railroad in its efforts to save the railroad.

Also submitting a letter in favor of the proposed purchaser was the Tennessee Mining Association.

The mining association said it has “grave concerns regarding the potential abandonment of the Oneida rail line in Scott, Campbell, and Anderson Counties, Tennessee, proposed by R.J. Corman Railroad Property, LLC.”

“Abandonment of this line would jeopardize any future utilization of coal reserves in this area by Tennessee miners,” the association said in its letter to the STB. “As an organization that supports the critical operation of the mining industry in the state of Tennessee, TMA adamantly opposes this action. This letter serves as support of offeror Arkansas-Oklahoma Railroad Co.’s Motion to Extend Time to File Offer of Financial Assistance.”

The association also argued, “Preservation of this rail line will protect future, affordable access by Tennessee mining companies to undeveloped coal reserves in Anderson County, in addition to supporting imminent freight needs. Active mining operations serve to provide critical reserves for electricity and numerous well-paying jobs in this rural area of the state.”

Also at issue is a huge increase in the price R.J. Corman is now seeking for the rail line, which it said earlier this year it would sell to Arkansas-Oklahoma Railroad for $2.75 million.

The new price as quoted in R.J. Corman’s latest filings is $4.234 million. R.J. Corman has said that all it intends to do with the rail line, if it is permitted to abandon it, is to pull up the track and ties and sell them as surplus.

Owned by Norfolk Southern Corp. (formerly The Southern Railway) from 1973 until Knoxville-based National Coal Corp. bought it in 2006 for $2 million, the line was begun in 1889 and extended to its current terminus at a now-abandoned coal preparation plant at Devonia in 1912.

When National Coal was on the verge of bankruptcy in 2010, it sold the line to R.J. Corman for $3 million, and it was used to haul coal out of the Fork Mountain area from a deep mine and a surface mine until those operations shut down in 2013. Since then, the line has not been used, and has fallen into disrepair.

Part of the line from Huntsville in Scott County to Indian Fork in Anderson County did have a short life as a tourist excursion route from 2008 to 2010 when Scotty Phillips, owner of the New River General Store at Devonia, and a partner started the New River Scenic Railway.

They ran the train – consisting of a vintage 1951 Alco RS3 diesel locomotive and two passenger cars – until shortly after R.J. Corman bought the rail line from National Coal and proceeded to terminate the excursion operation’s rights to use the tracks.

The former New River Scenic Railway engine and two rail cars – which Phillips brought here from Arizona -- have sat abandoned on a siding behind the Devonia coal-prep plant along Tennessee Route 116 since 2010, and all three units have been heavily vandalized.

During a recent conversation with The Courier News at the country store Phillips has operated since taking it over from his grandfather in 1982, he said he would like to see another tourist train come to the New River on the rail line, which passes just behind his store on the banks of the river.

“But I won’t be the one running it,” he said of a possible new version of the New River Scenic Railway. “We don’t have the money it would take to get back into that business.”

He said it would cost “lots of money” to rehabilitate the engine and passenger cars on the siding in Devonia, and there are estimates that it would cost at least $600,000 to rehab the rail line itself from Oneida to Devonia, as it has been abandoned and not maintained for the past seven years. There is even a large landslide near the Oneida end of the line that would have to be cleared.

R.J. Corman filed a notice with the STB on March 9 of intent to abandon the line, and on March 19, 2020, the Arkansas-Oklahoma Railroad Co. filed with the board a “notice of intent to file an offer of financial assistance” to purchase the line from R.J. Corman, and subsequently was given the price of $2.75 million.

But Arkansas-Oklahoma Railroad missed a filing deadline in April to make good on its offer, blaming the coronavirus shutdowns and failure of R.J. Corman to provide details about the line that the buyers could use to determine its value.

Subsequently, the STB authorized the use of the line as a trail under control of the Cumberland Trail Conference once R.J. Corman abandons it.

But Arkansas-Oklahoma won a stay of that order and an extension of its time period to file an offer for the rail line until June 9, or to file for another extension no later than June 3, which it did.

“We are hoping that Arkansas-Oklahoma Railroad will come up with an offer, and they have told us that they have a tourist operation that wants to use the line for excursions,” Frank said last week.

She also noted that there are still significant coal reserves in the areas that are served by the rail line, controlled by National Coal, part of a company owned by West Virginia Gov. Jim Justice.

“Once a rail line is abandoned and the tracks are pulled up, it’s nearly impossible to ever get it back,” Frank said.