Newton Falls rail project demands Jefferson, Lewis involvement

Rotten railroad ties lie along a rail line outside Natural Bridge, part of the line that would be repaired. Photo by Stephen Swofford, Watertown Daily Times.

Rotten railroad ties lie along a rail line outside Natural Bridge, part of the line that would be repaired. Photo by Stephen Swofford, Watertown Daily Times.

A St. Lawrence County project to rebuild the rail line between Newton Falls and Carthage requires the involvement of Jefferson and Lewis counties in order to proceed.

Under a settlement reached in 2012 between St. Lawrence County and the Mohawk, Adirondack and Northern Railroad Corp., it was agreed that any future work would require a uniform payment-in-lieu-of-taxes agreement among St. Lawrence, Jefferson and Lewis counties — the counties the rail line passes through.

Without the PILOT, the St. Lawrence County Industrial Development Agency won’t be able to utilize a $9.9 million grant awarded by the Empire State Development Corp. for rebuilding a 43-mile stretch between Carthage in Jefferson County and Newton Falls.

St. Lawrence IDA Chief Executive Officer Patrick J. Kelly said the uniform PILOT has to work differently than typical property tax abatement allowed under such agreements. He said the PILOT would instead be based on the performance of the railroad — the more rail cars that move back and forth on the line, the more the railroad has to pay in lieu of taxes, which would be spread out to taxing jurisdictions as revenue.

For construction, the ESD grant would only cover costs for replacing the railroad tracks. Any additional work that needs to be done, including the rehabilitation of railroad crossings, would require additional funding, Mr. Kelly said. He noted the county has been approved to receive a $234,000 grant from the Northern Border Commission to complete the crossing work on the St. Lawrence County side.

Donald C. Alexander, CEO of the Jefferson County Local Development Corp., said railroad crossing work also needs to be done in Jefferson County, which will require additional grants separate from the one obtained by the St. Lawrence IDA.

He said the JCLDC is eyeing three crossings in the village of Carthage that need to be repaired when construction begins in St. Lawrence County.

But before work in Jefferson County can start, the JCLDC needs to have its PILOT approved. Mr. Alexander said the state Department of Transportation has approved the PILOT, and it is currently being vetted by other state agencies. When that is complete, the PILOT will need to be approved by taxing jurisdictions, which are Jefferson County, the town of Wilna, the village of Carthage and Carthage Central School District. Mr. Alexander said the school district already plans to approve the PILOT.

The Jefferson County PILOT, he said, has been in the works for a while, and with St. Lawrence County planning to begin construction this summer, the PILOT needs to be approved with haste.

“We are at a point where we have to get this done for St. Lawrence County so they can pick up on some of this development,” he said. “This has been ongoing for some time, and right now we’re at crunch time, and if we can pull this off, we need to work as quickly as we can.”

Lewis County Industrial Development Agency Executive Director Eric J. Virkler said his county is still negotiating its PILOT with the railroad company and that no crossing reconstruction is planned at this time.

Mr. Kelly has said that reopening the railroad, which ceased operations in the late 1990’s, could help redevelop the closed Jones & Laughlin Steel Co. plant in Star Lake and the former Newton Falls Paper Mill.

On the Jefferson County side, Mr. Alexander said the PILOT and subsequent crossing repairs would also be beneficial to local businesses that depend on rail, including Slack Chemical Company Inc., in Carthage.

“Ultimately, we all want to work together and get to a common ground where the rail line is operable and providing economic value,” Mr. Kelly said.

The Development Authority of the North Country will oversee project engineering. Rhinehart Railroad Construction Inc., a Maryland-based company, was awarded a $6.8 million contract in February to rebuild the line.

By Brian Molongoski, Watertown Daily Times