Beltline Brawl

Who would believe that the City of Alameda and the two largest railroads in the West would both make misleading statements in legal filings to the Federal Surface Transportation Board? The story is convoluted, but it boils down to an $18 million property in the middle of Alameda that used to be the Alameda Beltline Railroad Yard. Interestingly enough, virtually all of the tracks accessing this yard have been illegally removed.

The City has a 1925 contract with the Alameda Beltline Railroad Company that allows the City to buy back the railroad for $30,000 plus the cost of any extensions. The 22-acre Beltline Yard is part of those extensions, and its owners (Burlington Northern Santa Fe - BNSF and Union Pacific - UP) don’t want to sell at cost. The City wants to enforce the contract, and then keep much of the land as open space.

BNSF is handling the legal defense (co-owner UP handled the operations when there was business) and has demonstrated that fertile minds are at work. First, they claimed that the language violated the fraud provisions of California law. They won this one, but the City reversed it on appeal, and a final trial about the contract is scheduled for April 2006 in state court.

Now this is where things get slightly wacky. On Dec. 9, 2005, the City filed an Exemption Petition with the Surface Transportation Board (yes, they call it the Surf Board for short) for Federal approval of an expedited takeover of the Alameda Beltline, once its state court case was settled.

In order to purchase a working railroad, an entity must have approval from the Surf Board, which regulates railroads. Thus the City claimed, with a straight face, that they wanted to get in the railroad business and planned to hire the Union Pacific to operate the line (the UP currently holds trackage rights to operate the railroad).

The City did point out it was in a dispute with the owners, who were likely to assert that there can be no sale without Federal approval from the Surf Board, and thus, the City was seeking such approval. But the City couldn’t stop there. They went on to assert that the City sought this acquisition for continued operation of a non-working, and virtually non-existent, railroad.

The City knows full well there is no operation, as much of the track has been illegally removed, and whole houses now sit on the parts of the former mainline right-of-way. In fact, the City notes the last movement was in 2003 when the largely unheralded Alameda Beltline quietly folded its tent.

Then comes the BNSF with its emergency reply and Motion to Stay the proceedings on Dec.15. The BNSF accuses the City of attempting to grab an $18 million parcel for a nominal payment of $30,000. They further accuse the City of intending to abandon the railroad once they acquire it (blithely ignoring the fact that they have ripped up much of the track already).

The BNSF asks for a stay of the City’s Exemption Petition, saying with a straight face, a stay is warranted… to assure the public interest in adequate rail transportation in the City of Alameda is maintained and to protect the public against scam transactions that damage the integrity of the national rail system and the Board’s process for regulating the system.

In one fell swoop, the BNSF manages to put more hypocrisy in one sentence then was perhaps ever before possible. They have assured the public interest in adequate rail transportation by illegally tearing up the tracks and selling property on the mainline of the Alameda Beltline. While BNSF worries about the City’s so-called scam transaction to damage the integrity of the national rail system, they have no problem physically damaging their own railroad by ripping out the tracks, starting at Mile Post 0 where the railway enters Alameda.

And talk about damaging the integrity of the Surf Board’s processes — the Alameda Beltline was supposed to get the Board’s authority before ripping up the tracks, but a formal abandonment might have tipped the City into invoking its contract. So they went ahead without Board authority and ripped it out anyway.

Now both the City and the railroad claim it’s a working line, and BNSF claims that the Beltline Yard is integral to the provision of freight service in interstate commerce (this is a property that is physically severed from the rest of the railway by about a mile and a half).

Hyperbole finally takes the day when BNSF claims in its Dec. 15 Motion and Reply that this proceeding involves the potential dismemberment of a vital link in national rail network. Any impartial observer would certainly declare that last bit entirely false and certainly misleading. Interestingly enough, you are not allowed to mislead the Surf Board and if caught, your Petition becomes immediately void. Hilariously enough, BNSF accuses the City of providing misleading information and argues that the City’s Petition should be declared void.

In one example, the statements are simply, flat out false. In a supplementary pleading BNSF just digs itself in deeper), they said, ABL has sold certain parcels of real estate along the line. The sold parcels… are extraneous to continued rail service… and the corridor remains intact.

If the corridor is intact, then we can assume that the railroad plans to tunnel through the new homes built on its mainline right-of-way?

So what happens next depends on the Apr. ’06 court appearance where the seemingly straight-forward contract language will be tested. Then, sooner or later, red-faced attorneys, most notably Sidney L. Strickland, Jr. for the BNSF, will have to go hat-in-hand to the Surf Board to set the record straight and finally get abandonment authority for this vital section of the national railroad system.

The best part is we get to watch all these players squirm, while valiantly trying to pretend they have not painted themselves into a corner.