Choo-choo Fantasies

Exposing this east-west rail nonsense before it gathers steam



Inside his carpeted Eureka offices, attorney Bill Barnum stood before a large map of the city and pointed to the upper right corner. "See who the author is?" he asked. The map, a handsome, sepia-colored lithograph, was created in 1938 by J.N. Lentell, a civil engineer and surveyor who first came to Humboldt County in 1891. All these years later, the map still fills Barnum with joy. "This is one of the most fun things you'll ever look at if you really care about local history," he said with a grin.

Gazing at the framed print, Barnum spoke whimsically about the city's rugged early industrial days, when all you needed to succeed was hard work, an idea and the money to see it through. Pointing to a rectangle near downtown he said, "My great-great-grandfather is the guy who founded this one, the Gross tract."

Barnum, 57, is deeply enamored of the past. "The history of things really imparts to me a lot of meaning," he said.

For several months now, Barnum has been meeting regularly with a group of likeminded men -- conservative, middle-aged history buffs who want to resurrect a 19th century idea and transform it into a reality here in the 21st. They're promoting the notion of building a new railroad east from Humboldt Bay, 125 miles up and over the coastal mountains to connect with the national rail system in Gerber, south of Red Bluff. The idea dates to the late 1800s, and the route they imagine for the line was first reconnoitered in 1909 by J.N. Lentell, the man who drew Barnum's beloved map (see sidebar).

Barnum himself advanced this idea more than 20 years ago. Then chairman of the Humboldt Bay Alliance for Economic Development, he advocated the project as an alternative to the landslide-plagued Eureka Southern line, which ran north-south. That line was later wiped out by storm damage in the winter of 1998-99 and remains severed with no credible plans for restoration on the horizon.

Before the sounds of one train fantasy had faded, another came roaring in. The east-west train idea has been gaining steam in recent months, with fuel provided by Eureka kazillionaire Rob Arkley. In a March 1 radio interview on KSLG he described himself as a one-man engine. "I have done a fair amount of work on this and spent my own money and dealt with people at high levels." He said he'd spoken to Union Pacific Railroad reps, private equity fund managers, "the Chinese," and government officials in both Sacramento and Washington, D.C. A spokesman for Union Pacific would say only that the company has been approached about a potential rail project.

Later that month Arkley went on KINS and declared that the project will not only turn Humboldt Bay into the first green port in the world, it will revitalize the entire region. "This is 1,000 to 1,500 union jobs, wealth being created in this county unlike anything we've seen; our kids will stay here; we will have our future again."

Now, local governments are climbing aboard, with the City of Eureka donning the engineer's cap. On Feb. 23 the City Council voted unanimously to pursue community development block grants from the state to pay for a feasibility study. The city has also hired former Harbor District CEO David Hull as a consultant to help gather political support from neighboring counties. The county Board of Supervisors has agreed to hear a presentation on the feasibility study. And Arkley suggested in a radio interview that he'll ask the public Headwaters Fund to pay for that study.

On April 12, government and business leaders were invited to an economic development forum put on by the Humboldt Economic and Land Plan (HELP), a shadowy, Arkley-backed group. There, Eureka City Manager David Tyson said that while he was once a skeptic, how's now a believer.

In Humboldt County, where the economic glory days of large-scale timber production are fading from memory and where our geographic isolation has only increased in recent years, this idea is enticing. Imagine our port bustling with business from the global marketplace. Ships loaded with Asian goods docking in our harbor, the freight being loaded onto eastbound trains. Goods from the American heartland arriving via rail and getting crane-lifted onto ships bound for Shanghai, Osaka and Cartagena. Our own goods flowing outward to the world. And jobs. Everywhere, jobs.

It's an alluring fantasy. Unfortunately, the challenges facing such an endeavor are so monumental, the money required to realize it so astronomical, that the east-west train is likely to remain mere fantasy for many, many years.


Let's take a look at a few of the challenges, starting with a big one: To date there has been scant evidence to suggest the railroad would have enough customers to justify the tremendous cost of building it. County Supervisor Mark Lovelace noted as much at a recent meeting. "I've heard all sorts of claims about this, about the market need, and I've asked repeatedly, one person after another, and I've not been able to find anyone who can give me a specific name or product or quantity of freight or anything about what would actually be shipped on this line."

Proponents cite a list of "missed opportunities." Hull, the former Harbor District CEO, said that in the last few years alone, Humboldt County has lost out on roughly $25 million in economic value because we lack a rail connection.

Asked for specifics, Hull said the biggest fish to get away was a company named Pasha that was looking for a West Coast port through which to ship cars to Asia. "It was about $21 million, I believe, of what we call economic value to the community -- jobs, tugs, stevedores," Hull said. He also cited a wind farm project east of Redding that needed parts imported, and iron ore exports from Colorado (both of which wound up going through the Port of Stockton).

It's not clear that the Port of Humboldt would have landed the Pasha contract even with an active rail line. Michael Pasha, the company's general manager, said company management considered 10 different ports. It ultimately chose the Port of Grays Harbor in Washington, but according to Gary Nelson, executive director of that port, Pasha's contract is not the type that would justify a new rail. "It's real transitory by nature," he said. There's not a lot of portside infrastructure required to export automobiles, and since shippers are always looking for the cheapest reliable alternative, Pasha could decide to relocate with little or no warning.

Other industry experts agreed. "Ports and harbors really don't dictate where commodities move," said Martin Callery, chief commercial officer for the Port of Coos Bay. "Shippers and steam ship lines have more to do with that than anything else."

In order to be financially stable, a port needs either a steady stream of bulk commodities (such as coal, grain or liquefied natural gas) or dedicated local industrial operations (sawmills or factories). Even with those in place, ports can fall prey to factors outside their control. Southern Pacific Railroad owned the Coos Bay branch line for almost 100 years before selling it to a smaller company in 1994. Callery said Class One railroads like Southern Pacific have mostly divested of short lines. "They want to move long trains long distances."

As timber and industrial shipping declined, traffic on the Coos Bay line grew thin. Over the last decade, Rail America, the company that purchased the Coos Bay line (among many others in North America) allowed the tracks to fall into disrepair. In 2007, Rail America shut down the Coos Bay line completely, leaving the port with only trucking options -- just like Humboldt.

"Over the last four or five years we've been able to access about $31 million in federal and state project money, so we are in the process of rehabbing the rail line," Callery said. But, he added, local industry helped leverage that public funding. Coos Bay still has two sawmills, an industrial mineral processing company and a plant that manufactures components for bridges, all of which will use the rail connection. "Had we not had existing industrial infrastructure here we would have been hard pressed to justify federal and state funding for rehabbing the line."

Humboldt County has no such local demand. Jacqueline Debets, the county's economic development coordinator, regularly speaks with business leaders from the region's "targets of opportunity" -- the eight local industries where jobs and wages have been steadily growing. "None of ‘em say we need rail," Debets said. "Even the lumber industry doesn't want to use the train. ... They're happy with trucks."

The Harbor District's new CEO, Jack Crider, understands the fickle nature of rail-based commerce on the West Coast. As executive director of two Oregon ports -- Tillamook Bay, then Astoria -- he saw firsthand how vulnerable port commerce is to instability -- economic instability as well as Mother Nature's. Around the turn of the 21st century, Tillamook, like the Port of Coos Bay, was largely shunned by Southern Pacific. The mainline operator wasn't making money off car-hire agreements with regional railroads. "They need fully loaded cars all the time," Crider said. "To supply them 100 miles away from the main line costs the Class Ones money." To stop the bleeding, Southern Pacific adjusted rates to encourage trucking, and train traffic evaporated overnight. Two months after Crider left Tillamook, the line blew out. It has not been rebuilt.

When Crider arrived in Astoria, the port's shipping business had dwindled to about 500 rail cars per year. "We built it back up to over 5,000 cars, and we were still struggling. Even at 5,000 cars a year we were still struggling to make that thing pay," Crider said. Not only was rail business capricious, but mudslides and washouts kept damaging the line's tunnels and bridges. "We spent $30 million on that railroad, and it never ended," Crider said.

Crider has grown skeptical of the sustainability of rail lines connecting to smaller ports, to say nothing of building one from scratch. "They just invested a ton of money in the Coos Bay line, and I'd bet anything that 10 years from now that thing's gonna be history, too," he said.

If the Port of Humboldt wants to rise above the economic turbulence that buffets other small ports, it would require not only a reliable rail line -- one that rarely if ever falls prey to washouts, landslides or collapsed bridges and tunnels -- it would also need a reliable supply of commodities in volumes large enough to consistently fill rail cars moving in both directions.

There are rumors that Arkley has a connection with a coal interest in Wyoming. Most bulk commodities leave the West Coast through the Port of Stockton, but Coos Bay and five other ports in the northwest are pursuing a deal to build a new coal export terminal. David Koch, acting CEO of the Port of Coos Bay, told Oregon Public Broadcasting that the terminal would export up to 10 million tons of coal per year. It would be extracted from the Powder River Basin in Wyoming and Montana and shipped to Asian markets, where demand has been growing. Environmental groups oppose the efforts, citing the health and environmental impacts of coal dust and diesel emissions.

The ports pursuing coal exports are engaged in talks with international players. In Coos Bay, port officials are actively negotiating with a terminal operator (Metro Ports), a mining company (Mitsui) and an unnamed Asian electrical company. In Humboldt County, the only documents supporting the east-west rail idea are J.N. Lintell's 103-year-old field notes. Last fall, the Harbor District considered and swiftly rejected a proposal to spend $275,000 in federal transportation money on a feasibility study. District Chair Mike Wilson said there was "no basis in policy or fact" to justify spending that much in limited resources.

In his KSLG interview, Arkley claimed that research has been done, but his representatives declined to provide any documentation. No one has even offered to pay for the feasibility study.

"The City of Eureka was very, very specific that they weren't going to spend any general fund money on this at all," said Hull, the city's consultant. "And everywhere I've gone it's the same thing,"

The city is spending money on Hull's consulting contract -- not to exceed $1,500, according to City Manager David Tyson. And Tyson has spent the city's time and money promoting the idea to neighboring jurisdictions. (In February he rented a car and drove to Red Bluff, where he gave a PowerPoint presentation to Upstate California, a regional marketing group. Travel expenses came to $331.)

Plenty of agencies have given moral support. The boards of supervisors in Trinity and Tehama counties have joined the call for a feasibility study, as have local unions, the Humboldt Redwood Co., the Greater Eureka Chamber of Commerce, the Wiyot Tribe, the Northwestern Pacific Railroad and officials from both Shasta-Trinity and Six Rivers National Forests. But none has chipped in so much as a dime.


Assuming someone does pony up $250,000 or more for a feasibility study, what exactly will it tell us? Hull says it will answer a number of key questions: Can the railroad physically be built? What's the best route? Who owns the land along the way? Who might operate the line? What are the permitting needs and environmental issues? How long will it take to build? And how much will it cost?

Lovelace said all of these questions are irrelevant until market demand has been established. "I have no doubt that for some amount of money a railroad can be built," he said at the May 8 supervisors meeting.

The feasibility study would not analyze demand, nor would it address a slew of other key issues -- who might pay for the project, what port improvements might be required, how much the route would cost to maintain, and how much traffic would be necessary to keep it financially viable while paying off the debt.

Setting all that aside for a moment, let's consider the challenges of simply building the thing. The first step would be establishing a right of way through multiple private tracts and two national forests. Unless government agencies seize the land via eminent domain, project proponents would need to entice every individual landowner to allow freight trains through their property on a regular basis. Then the general public would need to be convinced to let trains through both the Shasta-Trinity and Six Rivers national forests.

Chris Neary is the attorney for the North Coast Railroad Authority (NCRA), the public agency that owns the defunct north-south route through the Eel River canyon, so he knows a bit about regulatory struggles. "Getting the public to agree that you can use the national forest, I see that as a 10-year process," Neary said.

Project plans would need to satisfy both the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA). And the railroad would have to cut a swath through miles of rugged forestland without running afoul of the Endangered Species Act.

Local watchdogs are already dubious.

"It would be an environmental disaster," said Andrew Orahoski, conservation director for the Environmental Protection Information Center (EPIC). The route would invade the habitat of several species on the brink of extinction, he said. And then there's the geology. "You can imagine a rail line being built on some of the most unstable ground in the whole country," he said.

In northern California and southern Oregon, the Pacific Coast Ranges are riddled with a sticky, gravelly clay called "blue goo." Deposited by mudstones in the region's geologic shear zones, the goo has a bluish-gray color and tends to bend and buckle like plastic. Its presence in the Eel River canyon is largely responsible for the failure of the north-south rail. It's also found in South Fork Mountain, which lies between Eureka and Gerber.

Bill Kier is a natural resources policy consultant who has worked for the Department of Fish and Game and directed the state Senate's office for research and policy development. Now a board member on the NCRA, Kier said he finds the east-west rail idea unrealistic, to say the least.

"Based upon my 50-year-long career in natural resources and environmental policy, I find approval of a project of this scale -- across two national forests -- absolutely unfathomable," Kier said.

Then there's the port, which is currently not equipped to handle the volume of shipping traffic a successful rail line would require. "If you're gonna make several hundred million dollars' worth of investment to build a new rail line, you've also got to have it here on the terminus side," said Crider, the Harbor District CEO.

Eel River currents are constantly depositing sediments into Humboldt Bay. In order to maintain adequate channel depth, the Army Corps of Engineers must regularly dredge the harbor. A steady flow of shipping traffic would increase the dredging demands, especially as the shipping industry transitions to so-called "Post-Panamax" supertankers and container ships, which are dramatically larger than most existing ships. (An expansion of the Panama Canal is under way and is expected to reduce container ship traffic to West Coast ports.) New rail service would also require expanded docking facilities and infrastructure upgrades, none of which would be considered in the feasibility study.

The study is supposed to provide an estimated price tag for the rail portion of the project. So far, guesses vary wildly. "I've seen it all over the map," Hull said. Arkley told KSLG DJ John Matthews it will cost "half a billion." At a recent supervisors' meeting Supervisor Lovelace suggested "one or two billion." As for who might pay for it, that remains anyone's guess.


Even as a pipe dream, the east-west rail project serves certain purposes. For one thing, it has become the latest wedge issue dividing the community. In his Eureka law office, Barnum drew a contrast between guys like him who ask the big questions and those who want the region to remain stagnant. "I really believe that somebody -- and I think it should be me and those who agree with me -- we need to be aggressively investigating what might be," he said. On the other side you have the "naysayers."

"I think there's a significant portion of our community who want to see no change, no growth in our economy," Barnum said.

Arkley took it a step further, throwing down the gauntlet to anyone who might dare oppose the project. "Look," he told KINS "Talk Shop" host Brian Papstein, "the fact is [rail connectivity] polls over 80 percent in Humboldt County. Anyone who wants to oppose it, any politician who wants to take up a stand and oppose it, let's do it. We showed you with Marina Center what will happen. Let's do it here again."

Asked how long it will take to lay the track Arkley spoke confidently: "Months, not years."

As with Marina Center, Arkley's planned waterfront development in Eureka, the east-west rail project is being positioned as a litmus test: Those who support it are in favor of jobs, prosperity and a future for our children. Those who oppose or challenge it in any way must not want the rest of those things.

Like the east-west train idea itself, this line of reasoning ignores reams of economic development data and years of work from local leaders. In 2003 the Harbor District collaborated with the City of Eureka and Humboldt County to commission a harbor revitalization study. Prepared by the consulting firm Parsons Brinckerhoff, the study concluded that the best way to capitalize on our port was not through major importing and exporting but a range of more modest endeavors: increased aquaculture such as oyster farming, marine-dependent industrial projects, tourism and marine science.

Jack Crider, the new Harbor District CEO, sees plenty of potential for our bay. A loading crane and improved docking facilities could allow us to load containers with local wood products, then put them on barges to other large ports. He also likes the idea of getting Humboldt Bay incorporated into a short-sea shipping network.

Meanwhile the county has developed a master plan for the town of Samoa, rezoning part of the peninsula to allow a coastal industrial site, modernize the infrastructure and develop new live/work space ("Samoa 2.0," June 9, 2011). The Harbor District is also working on transportation and industrial development on the Samoa Peninsula and has made progress on expanding oyster farming ("The World is Yours, Oyster Farmer," April 5). And through an updated Prosperity initiative, the county has worked to identify and nurture existing areas of economic growth, including management and innovation services, niche manufacturing and specialty agriculture, food and beverage production.

Unlike the east-west train, these ideas exist in the realm of reality.


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