Winsted-Lester Prairie Journal, March 4, 2002

Dakota Rail corridor through Lester Prairie to be preserved

By Gail Lipe

The railroad line running through the heart of Lester Prairie will be preserved.

At least, that is the goal of the McLeod Regional Rail Authority.

The rail authority is part of a joint venture that owns approximately 44 miles of railroad line stretching from Hutchinson into Hennepin County.

But what does that mean? What is the McLeod Regional Rail Authority, and where did it come from? Are McLeod County residents paying local tax dollars to protect a transportation corridor?

"The total, only goal of the rail authority is to preserve the rail line as a public corridor," said Sheldon Nies, McLeod County commissioner and chairman of the rail authority.

In the early 1980s, Burlington Northern was going to abandon the 44 miles of track. Nies said the shippers on the line formed a shippers' association in an effort to keep the rail line open.

The state would only provide funding for a rail authority set up according to state statutes, so the shippers association worked to form one.

Nies said it needed the county to grant authority for the rail line to the rail authority, which the county board did on Jan. 8, 1985.

The rail authority received a matching grant from the state of approximately $500,000 to purchase the rail line from Burlington Northern. It matched that with $200,000, which came from the shippers along the line.

"The rail authority has never gotten any money from the county," said Nies.

Dakota Rail purchased the rail line through a contract for deed, which stated it would provide service until 2008. Rail America purchased Dakota Rail in December 1995, and the last train ran on the track on June 14, 2000.

On the line, there are 17 miles of track in McLeod County and 13 miles of track in both Carver and Hennepin counties. The rail authorities in the three counties worked together and with the state to buy the rail line from Rail America for approximately $6.5 million.

One-half of that was paid by the state, and the balance was split 65 percent Hennepin County, 17 percent Carver County and 18 percent McLeod County. That made McLeod Regional Rail Authority's share approximately $585,000, which the rail authority borrowed from the state, said Nies.

He said based upon the 17 plus years of sweat equity the rail authority put into the line, the state agreed to the loan.

The loan is a 25-year non-interest loan, with no payments due the first five years. After that, the loan payments will be $25,000 per year.

Nies said the lease agreements for property along the rail line amount to approximately $40,000 per year, and that will make the payments. There will not be any local tax dollars put into the rail authority.

"The state gave the rail authority the first five years to build its funds up and have a record of working with the tenants," he said.

He said property outside of the rail line right-of-way could be sold, but it would require the approval of all entities involved.

"The goal of the consortium is to maintain and keep the rail line as a public corridor," said Nies. "In order for any one of the entities to sell property, it has to have total agreement with the other three - the other two counties and the state. If one entity says no, the sale is off."

He said there are no plans of selling any of the property or doing anything in the near future.

According to Ron McGraw, attorney for the rail authority, a survey is being conducted of the shippers along the rail line. He said Hennepin County is the moving force, soliciting information from the shippers about whether they would use the rail line.

He said that was part of the agreement with the Federal Transportation Board in Washington, D.C.

Based on whether or not the shippers would use the track, another part of the agreement is that the rail authority seeks an operator for the line. If an operator is found, McGraw said it would have to be one that is willing to put money into fixing up the rail line.

Nies said the rail authority also may be involved in the proposed Twin Cities and Western Railroad switching station on the east side of Glencoe. He said it may serve as the fiscal agent if funding is needed from the state.

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