Covington's city staff contend that purchasing the city's 5.24-mile portion of the Norfolk Southern railroad corridor could potentially save the city money, produce revenue, be used to carry utility lines, be used for future transportation and protect the civic center site, if that project ever gets off the ground.
The potential benefits of purchasing the railroad corridor warrant further investigation, staff agreed, and Mayor Kim Carter said the city will be able to get financial information if it puts down $1,000 in non-refundable earnest money to show it's serious about a purchase.
City staff presented the benefits at Covington's strategic planning session Saturday. The council members agreed to gather more information and expressed support of paying $1,000 to gather relevant information, but they did not reach consensus on how to proceed, officials said.
Councilman Chris Smith previously voted to not pursue a purchase, but he said Tuesday that he is in favor of exploring the purchase if it could save the city money. He would not be interested in purchasing land outside city limits.
"It would not immediately be converted to any trail system, we would just be buying the raw land, not putting any additional money into it," Smith said.
Utility Director Bill Meecham and Transportation Manager Billy Skinner said the city has to pay a fee to the railroad and other property owners whenever it crosses the corridor with electricity, gas or water lines.
Within the last five years, the city has paid about $52,000 for various easements on the Norfolk Southern line, said grant writer Randy Conner, who has researched the railroad. The true cost would come if the city ever needs to run a utility line parallel to the railroad at any point. Those parallel easements are much more expensive than simply crossing the railroad.
"When you go parallel, that's big money," Skinner said.
Also, if a third party owned the corridor, it could choose to charge the city greater amounts to cross the line. Skinner said to date the railroad has not charged the city a lot. The city has to pay $1,500 for every easement application, Conner said.
In addition, if the city owned the corridor, it could charge telecommunications companies and other utility providers to cross the corridor, actually bringing in revenue to the city. This revenue would be discovered from the railroad if the $1,000 of earnest money was paid.
City Manager Steve Horton said the corridor could eventually be used for commuter rail at some point years or decades in the future, or it could even be used for freight rail again at some point, if any industries need it.
Horton said the purchase would also protect the civic center project. Originally, the city was going to pay $500,000 for a very small section of railroad corridor in downtown Covington. While the project is on hold indefinitely, it could be revisited in the future.
When asked why the railroad would sell the line if it could make money from it, Conner said Norfolk Southern is in the transportation business, and they would prefer getting a lump sum of money to invest elsewhere.
Smith and Councilman Keith Dalton want the city attorney to take the lead. Mayor Carter believes the attorneys should be involved, but she said she and Billy Skinner have historically been the contacts for the railroad and should continue to be involved.
Carter said her next step is to contact Newton County Chairman Kathy Morgan to find out whether the county is going to take action on the matter. Two grants totaling more than $1 million set aside for the purchase are both in the county's name.
County commissioners have not expressed a desire to pursue a purchase, and Morgan said previously she didn't know when the matter would be brought up again.
The city will explore whether the grants can be transferred, but newly-elected U.S. Rep. Austin Scott has commented.