Canadian Pacific and Illinois officials face off in property battle

State officials seek to use eminent domain powers for highway work
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TEH1527234
Canadian Pacific's Bensenville Yard as seen from the window of a commercial flight that just took off from Chicago's O'Hare International Airport in September 2015.
Chris Guss
CHICAGO — Canadian Pacific is embroiled in a high-stakes battle with Illinois officials over use of the railroad’s vitally important yard next to Chicago’s O’Hare International Airport to build a multi-billion-dollar highway project.

After a preliminary round ended with a CP loss in U.S. District Court in Chicago, the fight is now being waged in Washington before the Surface Transportation Board. There, the Illinois State Toll Highway Authority is seeking the green light to condemn property in order to build a new toll road over CP rights-of-way and, ultimately, through CP’s Bensenville Yard.

CP contends, however, that these “irreplaceable” properties must remain intact because they are crucial to maintaining the fluidity and efficiency of CP itself and the nation’s other railroads.

“The proposed (condemnation) would indisputably interfere with current rail operations and that interference could prove disastrous to CP, its customers, and to the national rail network as a whole,” CP officials wrote in a lengthy filing in February with the STB.

Illinois Tollway officials, meanwhile, contend that CP’s intransigence is jeopardizing a $3.4-billion toll road designed to open up much-needed western access to the world’s second-busiest airport.

The Tollway has recruited some heavy political support. Both Illinois’ U.S. senators and a bipartisan group of 16 representatives have signed a letter to STB Chairwoman Ann Begeman urging the board to support the Tollway’s request and move quickly to proceed with the highway project.

But experts say the issue before the STB could easily drag out for an extended period. Meanwhile, the Tollway says it faces the loss of millions of dollars in additional construction costs — at least $200,000 for each month the project is delayed.

U.S. Rep. Dan Lipinski, D-Ill., is one of the supporters of the Tollway’s position, but as a member of the House Transportation and Infrastructure Committee, said he understands the STB’s role as overseer of the nation’s railroads.

“What this (dispute) really comes down to is, does CP have a case that there would be disruption to its operations if the tollway was able to put its road through CP property?” Lipinski says. “The Tollway has convinced me that it would not have an impact, but they have to convince the STB of that also.”

Both sides had been negotiating for years over the Tollway’s need to access the Bensenville Yard and CP right-of-way just north of the yard. The Bensenville Yard and tracks are operated by CP’s subsidiary, Soo Line Railroad Co.

CP reportedly asked for $114 million for land acquisition and improvements to the Bensenville Yard in March 2014. The Tollway’s offer wasn’t disclosed, but CP ultimately broke off talks, and Tollway Chairman Robert Schillerstrom called the move “mystifying and unbelievably irresponsible.”
WesternApproach
A reduced image of an Illinois Tollway project that would cross a portion of Canadian Pacific's Bensenville Yard to the west of O'Hare International Airport.
Illinois Tollway website
The immediate issue before the STB is the Tollway’s desire for permanent and temporary easements in order to construct five highway bridges over CP tracks running along the western edge of O’Hare. Union Pacific also runs track parallel to CP.

The Tollway’s massive program is known as the Elgin-O’Hare Western Access project. The $3.4-billion program involves construction of two new toll roads leading to and skirting O’Hare’s western edge. The interchange where the two toll roads will meet is the site where the Tollway wants to build its bridges. That interchange is also where the Tollway plans to access airport property for a proposed new terminal that some critics scoff is unlikely to be built any time soon.

Tollway officials call the interchange the “keystone” of their project; without it, the program “does not work.”

Each of the five bridges will only require one support pier on railroad property. The piers would be placed on a shared property line between CP and UP rights-of-way “and will leave ample room for future expansion of the railroads’ operations,” Tollway officials write in their STB filing.

Illinois officials say they've been negotiating a purchase price for acquisition of easements to cross UP’s tracks, and do not anticipate they will need to assert eminent domain authority to acquire property rights from UP.

The Tollway reportedly offered CP as much as $3.3 million for the easements. But it said CP broke off four years’ worth of negotiations in April 2016, and claimed that CP has “no intention of selling any interest in this property.”

CP’s representative declined comment to Trains News Wire regarding the dispute, but provided a copy of a letter CP’s Keith Creel sent Monday to the Illinois Congressional delegation.

Creel writes that there has never been an agreement to sell railroad property to the Tollway, and that negotiating away “irreplaceable rail capacity is not an option.”

“If the Tollway proceeds with construction of the interchange as planned, either it will waste hundreds of millions, if not billions, of dollars more in building a project that cannot be completed, or it will harm CP’s rail operations and the national rail network and jeopardize the billions of dollars in public and private dollars that have been spent to address rail issues in the Chicago Terminal,” Creel writes.

CP believes the Tollway has other options that would not burden the rail network, Creel stated. The letter also rejected the “outrageous claim” that it was CP’s idea to route the toll road through “its most important rail yard in the country.”

With talks broken down, Tollway officials say they must now exercise eminent domain to acquire the bridge easements, and has petitioned the STB for a ruling that condemnation power “will not unreasonably interfere with railroad operations, and therefore is not preempted by federal law, namely the Interstate Commerce Commission Termination Act of 1995.

The Tollway’s petition only focuses on the bridges needed for the interchange; it does not seek access yet to the Bensenville Yard and describes its plans for the yard as only preliminary. CP takes issue with this.
CP
Just to the south lies Bensenville Yard. Tollway documents, including two voluminous environmental impact studies, have always depicted the south O’Hare “bypass” toll road cutting through Bensenville Yard.

In its petition to the STB, the Tollway officials write that during the past 11 years of highway project development, CP “never indicated it would completely refuse to allow access” to the west side of O’Hare or that it objected to the location of the interchange. Indeed, CP “remained silent” while multiple public agencies conducted hearings and studies.

The Tollway called an “eleventh hour suggestion” by the CP that it develop another route for the roadway “simply unreasonable.”

Tollway’s filing doesn’t paint this simply as a rail versus highway issue, however. A good deal of the agency’s filing describes the importance of O’Hare and its place in the national air transportation system. The airport is in the midst of a $13.3-billion modernization program, launched in 2005, that calls for reconfigured runways and upgraded terminal and support facilities, in a strategy to reduce delays and improve efficiency.

By the same token, CP says the bigger issue is interstate commerce. Its filing emphasizes Chicago’s crucial role as the heart of the North American rail network, with 500 freight trains and 800 passenger trains operating into and out of the city each day.

Six of the seven Class I freight railroads and three intermediate switch carriers operate in Chicago, handling 25 percent of all U.S. rail freight. CP said roughly 20 percent all CP traffic and 48 percent of all interchange traffic touched Chicago in 2016.

Nevertheless, Tollway officials say that Bensenville Yard is not at issue before the STB, and that its present concern is only with the bridge easements. However, CP contends it is “inevitable” that the interchange will lead to the Tollway’s need to cross the yard.

Tollway officials request that the STB rule before the end of March, so that bridge contracts can be awarded in July with the start of construction to begin this fall.

Transportation experts such as De Paul University’s Joseph Schwieterman says the STB will be cautious and quick decision is unlikely.

“There’s a lot at stake here,” Schwieterman says. “There’s good chance a precedent will be set that can affect future projects.”

In its 142-page filing last month, CP argues the Tollway “ignores a deep and wide well of authority holding” that takings of rail property for conflicting use are preempted.

The railroad’s filing says the property at issue, Bensenville Yard and the right-of-way, are two of the most important rail operating properties in CP’s entire system, and are the “fragile and already congested heart of the national rail network.”

The railroad says the bridge construction would require shutting down CP’s mainline track repeatedly for up to 14 hours at a time over an extended period, “which would be enormously disruptive to interstate rail operations and would jeopardize the fluidity of an already congested Chicago rail network.”

The takings would also prevent CP from adding capacity in the right of way to meet demand for rail service during the five-year construction period and would permanently limit CP’s ability to add capacity after construction ends, according to the filing.

Furthermore, the railroad argues, once the interchange is completed, the Tollway would be locked into a route through the yard for the southern leg of the western bypass, connecting the interchange to Interstate 294 south of the yard.

Completing the bypass would require that the Tollway acquire 35 to 40 acres of Bensenville yard, “which would disrupt CP’s operations at this critical yard,” railroad officials say.

The railroad disputes the Tollway’s contention that it has no other alternatives, saying other options that would not burden interstate rail transportation do exist, but that the Tollway refuses to consider them, “evidently due to local politics.”

“Thus, while the Tollway seeks to portray CP as standing in the way of construction of a project of regional and national significance,” according to the railroad filing, “the reality is that this dispute is a matter of the Tollway placing local interests over national interests in a sound rail system.”

NEWSWIRETrains News Wire

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