Gov. Pete Wilson has granted state officials the right to use eminent domain to acquire 20 miles of railroad tracks for creation of the Alameda Corridor, a transportation link between Southland ports and Downtown Los Angeles.
A bill signed late Tuesday night gives Caltrans the power to condemn the railroad property and offer it at fair market value for the project.
Although it leaves the ultimate decision in the hands of Wilson appointees, the action gives port officials an important weapon as they seek to negotiate with Southern Pacific Transportation Co. The railroad is demanding $260 million for the land, or more than four times the value set by government appraisers.
The $1.8-billion Alameda Corridor would reach between the ports and Downtown Los Angeles, allowing trains to travel at 40 m.p.h. in areas where cargo currently moves by trucks on crowded roads or by rail cars sometimes traveling at 5 m.p.h. Supporters say the project, which would place the train tracks in open trenches, would ease traffic, lessen air pollution and create thousands of local jobs.
In signing the bill, Wilson maintained that eminent domain should be used “as an avenue of last resort” and urged both sides to once again negotiate.
But Southern Pacific attorney Tom Houston said railroad officials would not sit at the bargaining table.
“We had a deal--$260 million--that’s the deal. What’s to negotiate?” he said. “We went to our minimum price and that’s it. Anything less is way too damaging to Southern Pacific from a business point of view. It’s a dead deal.”
But project officials said they believed that Southern Pacific was posturing to enhance its bargaining clout.
“That’s their negotiating position,” said Gill Hicks, general manager of the Alameda Corridor Transportation Authority. “I cannot imagine the whole thing is dead. There is so much support, so much political momentum for the project--and the railroads need it. I’m confident that eventually all the parties will get back together, though there may be tough statements made before then.”
In June, officials from the ports of Long Beach and Los Angeles tentatively agreed to purchase the right of way from Southern Pacific for $260 million. But that deal recently came under closer scrutiny by Mayor Richard Riordan’s five newly appointed harbor commissioners and amid charges of profiteering by state regulators.
Citing concerns about title issues, lack of an operating agreement among the three competing railroads--Southern Pacific, Union Pacific and Santa Fe--and environmental cleanup, officials from both ports recently terminated the agreement.
Assemblywoman Juanita McDonald (D-Carson), the bill’s author, said she hopes that all parties in the dispute “can come back to the table to try to work out some solutions and negotiate in the best interest of all involved. If Southern Pacific doesn’t want to negotiate; then Caltrans will step in.”
One possible hurdle to acquisition of the railroad property is the federal Interstate Commerce Commission’s jurisdiction over the railroad industry. But McDonald said she will talk with Transportation Secretary Federico Pena’s office today about obtaining its approval.
“At this point, we cannot comment on the overall implications until we get a decision about how much jurisdiction ICC would have,” said Yvonne Avila, spokeswoman for the Port of Long Beach. “We are taking a wait-and-see attitude.”
When negotiations first began, Southern Pacific asked for $500 million. Two appraisals valued the land at $60 million and $78 million. The $260-million price tag was reached as a means of compensating Southern Pacific for its land and for having to share with competitors what would be a modernized corridor.
Under the plan, the separate sets of tracks currently maintained by the three railroads would be consolidated into the one corridor.