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Specter of eminent domain chills support for CSX cargo project near Selma

CSX announced plans in 2016 to build major container hub near Rocky Mount

Railroad behemoth CSX announced in 2016 it would make Rocky Mount an East Coast hub for shipping and receiving cargo containers. The company will build the Carolina Connector, an “intermodal terminal”. The terminal will draw and reroute containers
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Railroad behemoth CSX announced in 2016 it would make Rocky Mount an East Coast hub for shipping and receiving cargo containers. The company will build the Carolina Connector, an “intermodal terminal”. The terminal will draw and reroute containers

State and local elected leaders were effusive, at first, in their praise for a CSX plan to build a $272 million railroad-truck cargo hub in Johnston County. But their approval turned quickly to rejection because of two words: eminent domain.

County officials and Gov. Pat McCrory may not have been prepared for a backlash that began building within hours of the CSX announcement on Jan. 14. Contacting the owners of 450 acres along Interstate 95 near Selma that day, railroad representatives let them know they would not have a choice about whether to sell the property.

“He made it very clear that we had to decide on a price,” said Trent Lassiter of Selma, who operates a music and events venue called The Farm. “And if we did not decide on a price, it would go to the next step.”

Railroads and public utilities have the power of eminent domain under state law in North Carolina and in many states. Just as the state Department of Transportation can condemn land for a new highway, CSX can take the land it needs for tracks and other railroad facilities. If negotiations fail, the courts will decide on a fair price.

Tony Braswell, chairman of the Johnston County commissioners, initially said the CSX project would bring jobs to the county and Eastern North Carolina.

“We need that boost,” Braswell said Jan. 14.

But landowners complained, and he expressed second thoughts just days later. On Jan. 20, announcing that the commissioners had rejected the project, Braswell said CSX’s tactics had left him “disappointed and appalled.”

McCrory’s turnaround took a few days longer.

On Jan. 14 the governor called the CSX project “precisely what was envisioned” when he championed changes in state law to focus spending on transportation projects with demonstrated economic benefits. But Tuesday, citing “serious land issues” and the Johnston commissioners’ vote, McCrory’s office declared that the CSX I-95 site “does not appear to be a viable option.”

McCrory and Johnston officials said they hoped CSX would find another site for the cargo hub. But CSX said several times that it is not considering an alternate location.

CSX still committed

Railroad officials signaled Wednesday that they were undeterred by McCrory’s reversal.

“CSX is committed to this infrastructure project which will create jobs, deliver a distinct competitive advantage for large and small businesses, and spur economic development,” CSX spokeswoman Kristin Seay said by email. “We look forward to working with all interested stakeholders to address concerns and move the project forward.”

The freight terminal, dubbed CCX or the Carolina Connector, would use robotic cranes to transfer shipping containers between trains, and between trains and trucks – handling as many as 900,000 containers a year.

CSX said the project, which could be completed by the end of 2019, would create 300 construction jobs, employ 300 CSX workers, and could spawn 1,500 jobs across the state in coming years. By increasing rail freight shipments along the eastern seaboard, CSX said, the terminal could reduce truck traffic.

CSX, based in Jacksonville, Fla., proposes to spend $150 million and is seeking $100 million from North Carolina’s State Transportation Improvement Program, which funds highway and other transportation projects.

Hoping for a boost in cargo shipments through the container port at Wilmington, the State Ports Authority passed a resolution supporting the CCX project Wednesday.

‘Visceral reaction’

Eminent domain has played a central role in railroad history.

“Railroads are considered as performing a public function, just like power companies and other utilities,” said Charles A. Szypszak, a professor at the UNC School of Government. “So the state governments basically delegate that eminent domain power to them.”

It’s an issue a lot of conservatives have a sort of visceral reaction to.

Andy Taylor, N.C. State University political scientist

Conservatives have campaigned over the past decade to curtail eminent domain powers, especially when used to take property for the benefit of private companies.

“It is, interestingly, an issue that often pits Republicans against businesses, as is the case here,” said Andy Taylor, an N.C. State University political scientist. “It’s an issue a lot of conservatives have a sort of visceral reaction to.”

Americans for Prosperity, a conservative advocacy group, criticized the CSX plan and called for a state constitutional amendment to protect landowners from “forced confiscation of their property” by private companies such as CSX.

Rep. Paul Stam, an Apex Republican, is the sponsor of a bill passed last year by the House, but not the Senate, to bar the use of eminent domain to acquire land for some types of private uses – such as hotels that might be built at train stations. Stam said the measure probably would not interfere with CSX plans for a freight terminal.

“If there was no eminent domain for railroads in general, you couldn’t have a railroad,” Stam said. “If you don’t have eminent domain for highways, you can’t build a straight highway. Because somebody would hold out, and your highway would have to run around Mr. Jones’ house.”

Eminent domain was an issue in February 2010 when CSX announced a $120 million project to double the size of its rail yard in Worcester, Mass. When negotiations stalled, CSX initiated eminent domain proceedings for several parcels in August 2010.

But by February 2011, the railroad had agreed on purchase prices for each tract, without condemning any of them. The Worcester Telegram & Gazette reported that the purchase prices ranged from twice to 10 times the appraised tax values.

In Johnston County, Gerald Peedin’s 128 acres are the most CSX wants from any one landowner. The land is wooded or so soggy that he cannot farm it. But – after his abrupt encounter with the CSX representative – Peedin is unwilling to sell.

“Their way of approaching me made me think I may not be able to believe them down the road,” Peedin said. “Usually when someone wants to do something fast, they do it because they don’t want you to learn much more about it.”

If they need this project, I hope they get the project somewhere. But it’s not right to take somebody’s land against their will.

Trent Lassiter, Selma landowner

This isn’t the first time Peedin’s land has been targeted for a major infrastructure project. The proposed path of Dominion Power’s Atlantic Coast Pipeline also cuts through his property, but he said the pipeline company sent him a letter early in the process.

“In my case, in our case, we probably passed up a bunch of money” from CSX, Peedin said. “But we value community more. This is not a rich area, but people respect each other.”

The Farm owner Trent Lassiter said the CSX representative told him the railroad wants to buy the land it needs by July.

“We survive here off weddings and other events we book ahead for a year and a half,” Lassiter said. “He told me not to book anything for this fall.

“If they need this project, I hope they get the project somewhere. But it’s not right to take somebody’s land against their will,” Lassiter said.

Braswell, the Johnston commissioner, agreed.

“I’ve never seen such a lose-lose situation in all the years I’ve been in politics,” Braswell said. “We desperately need this project for I-95. But if it’s the wrong place, it’s the wrong place.”

McCrory faces a challenger in the March 2015 Republican primary. Braswell also has primary competition in his quest for a vacant seat in the state House.

N.C. State’s Taylor noted that elected officials often are particularly sensitive to public concerns in election years.

“It’s interesting that there was support for CSX’s plans,” Taylor said. “Then there was significant public opposition, and now the position has changed.”

Bruce Siceloff: 919-829-4527, @Road_Worrier

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