FOER Letter to DOT Regarding Mendocino Railway RRIF Loan Application

Wednesday, November 17, 2021

The Honorable Carlos Monje
Undersecretary
U.S. Department of Transportation
1200 New Jersey Avenue, SE
Washington, D.C. 20590

Re: Mendocino Railway RRIF loan application

Dear Under Secretary Monje,

Friends of the Eel River (FOER) advocates for the protection and restoration of Northwestern California’s Eel River watershed and its critical but imperiled fisheries. For reasons we explain below, FOER is alarmed to learn that Mendocino Railway (aka California Western Railway, aka the Skunk Train) may be under consideration for a federal loan under the Railroad Rehabilitation & Improvement Financing (RRIF) program.

Mendocino Railway’s 2021 loan application has not yet been made accessible to the public, so our comments here are necessarily preliminary, but are based on the company’s previous applications for RRIF funding, as well as court records, public agency records, and press reports. Given what we do know, it is difficult for us to understand how Mendocino Railway, a company that has only ever operated excursion trains on a section of tracks isolated from the national rail network, might qualify for public funds intended for the rehabilitation and improvement of actual railroads.

Mendocino Railway owns a rail line from Willits to Ft Bragg, CA over the steep, rugged Coast Range. A collapsed tunnel on the line restricts the excursion trains and railbikes that Mendocino Railway does operate to going out to the tunnel and back to their point of origin. Mendocino Railway raised private funds to clear the tunnel after a previous collapse, but the tunnel failed again. If Mendocino Railway’s current application follows the lines of its previous applications, the company seeks funding to repair the collapsed tunnel. Our understanding is that such operating costs are not eligible for RRIF funding.

Mendocino Railway claims it will become an operating freight railroad, but there is nothing to suggest the line from Willits to Ft Bragg will become economically viable to operate as a freight line in the foreseeable future. The rail line Mendocino Railway uses was constructed for the former Georgia-Pacific mill at Ft Bragg. That mill is gone. The timber industry has restructured around more flexible road networks.

Nor is there any reasonable basis to credit Mendocino Railway’s claim that it could profitably operate a rail line hauling rock out of the Eel River canyon to ship from Ft Bragg. It is difficult to exaggerate how tiny the Ft Bragg harbor is. There is very little evidence of demand for rail transportation in the region around Willits and Ft Bragg, and none at all on the scale necessary to cover the costs of rebuilding and maintaining the necessary infrastructure.

The North Coast Railroad Authority (NCRA) line, through which the Mendocino Railway line might connect to the national rail system at Willits, has been inoperable north of Windsor, CA for more than two decades. As the NCRA noted in their letter to your office of November 3, their estimate of the cost of repairs needed to put the rail line from Willits south back into operation was at least $600 million. These challenges are orders of magnitude greater than the problems Mendocino Railway cannot overcome on its own line.

FOER’s greatest concern with Mendocino Railway’s RRIF application is that any public assistance to the company will help support an Offer of Financial Assistance, which Mendocino Railway has informed the Surface Transportation Board it is preparing for “all or a portion” of the North Coast Railroad Authority (NCRA) rail line from Willits north to Humboldt Bay.

Because a RRIF loan would improve Mendocino Railway’s ability to seize and operate a railroad on the line the NCRA now seeks to railbank for trail use, DOT should carefully consider the potential impacts on sensitive communities, critically important natural areas, threatened and endangered species, clean water, and other public trust values that would be significantly impaired by the reconstruction and operation of a freight rail line in one of North America’s most unstable landscapes.

As noted, Mendocino Railway may use RRIF funds in support of its efforts to claim “all or a portion of” the NCRA line. Therefore, DOT should analyze the several possible scenarios at hand, each of which promises significant impacts. Even reopening the relatively small portion of the NCRA line from Dos Rios to Willits, as Mendocino Railway has suggested it intends to do to ship rock out of Ft Bragg, would entail impacts on the mainstem Eel River and Outlet Creek.

In addition to Chinook salmon and steelhead, Outlet Creek is home to a critically imperiled population of the southernmost naturally spawning coho salmon on the planet. Coho, steelhead and Chinook in the Eel River are all listed as Threatened under the federal Endangered Species Act. Reconstruction and operation of freight rail line down Outlet Creek and the mainstem Eel River canyon would certainly cause take, impair the recovery, and not improbably result in jeopardy, to surviving Eel River salmon and steelhead. Thus, DOT should consult with the National Marine Fisheries Service regarding potential impacts to ESA listed Eel River fisheries before approving any grant of federal funds that may facilitate Mendocino Railway’s proposed actions.

One of the most important of the public values Mendocino Railway threatens with its proposal to seize the NCRA line for private gain is the ability of Humboldt County citizens to use their public right of way as public trails. Completion of the critical Humboldt Bay Trail South project, which will finally allow safe bicycle access between Eureka and Arcata, depends on completion of the NCRA’s proposed railbanking. Both the railbanking effort and the trail project are now threatened by Mendocino Railway’s effort to acquire the NCRA line for its own purposes. Mendocino Railway dismisses these concerns in its filing with the Surface Transportation Board. The Department should not.

Thus, we urge DOT to ensure that prior to any loan approval, the Department carefully and fully consider the range and extent of the impacts on the environment, fish and wildlife, and human communities that could result from Mendocino Railway’s actions. Certainly, the details of Mendocino Railway’s proposed action must be fully disclosed and analyzed under the National Environmental Policy Act (NEPA), but it will also be essential to consider the probable impacts to salmon and steelhead listed under the federal ESA, to clean water, to public health and a range of other public trust values. As well, the Department should analyze the climate impacts of Mendocino Railway’s current and proposed operations, including of course the carbon footprint of its excursion train customers, the bulk of whom must necessarily drive long distances for a short train ride out of Willits or Ft Bragg.

It is important the Department ask hard questions about the financial and legal soundness of Mendocino Railway’s professed plans. While the city of Ft Bragg sponsored Mendocino Railway’s unsuccessful 2020 RRIF grant application, it has now withdrawn its support for the company’s efforts to secure public funds. The locus of Mendocino Railway’s falling out with the city of Ft Bragg appears to be a parcel which both the city and the company sought to acquire. When it was unsuccessful in arranging a purchase, Mendocino Railway attempted to acquire the property by eminent domain. The city has now filed litigation challenging Mendocino Railway’s claim to be, as an operating railroad, a public utility entitled to use eminent domain.

As well, there is the nagging question of the toxic waste site at Mendocino Railway’s Ft Bragg property, the former Georgia Pacific mill. The California Department of Toxic Substance Control’s EnviroStor website[1] reports that

California Western Railroad completed a Resource Conservation and Recovery Act (RCRA) Facility Investigation (RFI) of the maintenance facility in Fort Bragg in 2013. Based on the results of the RFI, additional work is needed to investigate lead, arsenic and petroleum and groundwater. As of September 2018, this investigation has not been completed because of limited financial resources of California Western Railroad. DTSC expects the investigation to begin in 2019. (emphasis added)

Clearly, Mendocino Railway has a number of financial, and perhaps legal, problems to overcome.

Thus, it is striking that on August 16 of this year, both Mendocino Railway and an LLC chartered in Sheridan, WY filed notices with the Surface Transportation Board of their intent to file Offers of Financial Assistance in the NCRA’s proceeding proposing to railbank its line from Willits to Humboldt Bay to construct the Great Redwood Trail. Such Offers of Financial Assistance are in their essence federal eminent domain actions that would short circuit the NCRA’s proposal to railbank its line. The NCRA line, the costliest line in the country to maintain, would be so expensive to rebuild and operate that a very high volume of freight would be necessary to service the capital investment.

Only coal offers even a fraction of the volume of freight necessary to service the enormous costs of rebuilding the NCRA line through the Eel River canyon. A high traffic coal train would literally poison the Eel River’s clean water, bury its critical salmon and steelhead habitat in slides and sediment, and cause generations of lasting harm to vulnerable communities along the line from Napa to Humboldt Bay.

We are concerned that Mendocino Railway is coordinating its efforts with the Sheridan LLC, which we now know to be a front for coal interests associated with the Crow Tribe. The coal such an operation would ship to Asia to be burned would return to us as airborne mercury; as droughts, wildfires and flooding; as increased risk for each human and every ecosystem on Earth. Under no circumstances should taxpayer funds support such a comprehensively counterproductive proposal.

Conclusion

Neither Mendocino Railway nor its proposed work merit public funding. Both are high risk and likely to cause substantial harm if empowered by RRIF funding.

Thank you for your attention to these difficult questions.

 

Sincerely yours,

Scott Greacen
Conservation Director

 

[1] see California Department of Toxic Substances EviroStor, California Western Railroad (80001451), website, 2021.