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Hey everyone, I know I have not done a discussion in forever, but I have a question to ask. Would reopening the line from Samoa to South Fork be profitable? I was speaking with Michael Presson, and he said that NCRA has handed over most of the line to NWP. As of last friday,  they signed a new deal to rehabilitate the tracks up to Scotia Bluffs to ship lumber products out by rail.  This was according to SVP of NWP.

He also said that their overall plan was to reach all the way to Eureka, but where would the money come in order to do that? 

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I'm really not sure I follow much of anything you said.  Let's break this up into parts. 

I was speaking with Michael Presson, and he said that NCRA has handed over most of the line to NWP.

NCRA contracted freight operations out to the present NWP in 2006.  At the moment NWP is providing its service over the line south of Windsor over the permanent freight easement NCRA has over SMART's railroad.  Healdsburg is the dividing point between SMART ownership to the south and NCRA ownership to the north.

As of last friday,  they signed a new deal to rehabilitate the tracks up to Scotia Bluffs to ship lumber products out by rail.  This was according to SVP of NWP.

Huh?  To Scotia Bluffs from where?  I'm highly suspicious of this.  More on this below.

He also said that their overall plan was to reach all the way to Eureka, but where would the money come in order to do that? 

This has long been NCRA's stated goal.  However, the Draft Strategic Plan linked to in the Lost Coast Outpost article several threads down- the article reports the NCRA board approved it on an 8-0 vote- states there is no present economic justification to repair the line from South Fork to Willits (estimated restoration costs start at $600 million and go up), and the Draft plan proposes to transfer the right-of-way to some other entity or group of entities for railbanking and conversion to some sort of a recrational trail, subject to reversion to a railroad should it become feasible to so do in the future.  As for money, the strategic plan's executive summary (available at https://lostcoastoutpost.com/loco-media/loco-media/blog/post/20042/...) has a telling passage.

"...During this interim period NCRA requires a dedicated source of annual operations and maintenance funding from the state that is sufficient to address these responsibilities and enable NCRA to aggressively pursue and effectively manage additional funding for restoration of rail service where it is practical to do so."

It should be noted NCRA at present does not get anything like this from the state, so this would fall under the heading of new state spending.

Finally, to the first question you asked:

"Would reopening the line from Samoa to South Fork be profitable?"

So, the Draft Strategic Plan says the following about this subject.

"NWP Co., in conjunction with NCRA, has identified portions of the line where return of freight service is economically feasible.  NWP Co. is preparing a separate business plan which is expected to address the viability of freight rail in the following areas...From South Fork to Eureka, Arcata, and Samoa, along with a tourist train.  SHippers that have expressed interest include Humboldt Redwood Company, gravel operators and contractors, many of whom work with both the County and CalTrans, including Eureka Ready Mix, Mercer Fraser, Thomas R. Bess Inc. and Jack Noble."

"Phase 5- South Fork to Eureka Rehabilitation.  This 46.5 mile section is estimated to cost $47 million and includes vegetation clearing, upgrading of track, culvert cleaning and replacement, replacement of the Van Duzen bridge steel spans, timber bridge repairs, repairs to three tunnels and crossing signal and surface repairs and replacements."

"Phase 6- North Humboldt Bay Rail Corridor- Repairs for the 16.5-mile phase include track upgrades, brush cutting and vegetation removal, embankment repairs, culver repairs and cleaning, timber bridge repairs, crossing and signal repairs and upgrades for a total estimated $15 million."

"Work toward obtaining grant and private funding to complete phase improvements to restore freight service from Cloverdale to Willits and establish a freight belt line and tourist train around Humboldt Bay."

"Restoration in Humboldt County, where feasible, may proceed independently of restoration from Windsor north, if funding sources are identified and accessed."

So, this Draft Plan is what NCRA is going to submit to the California Transportation Commission at their meeting next week, January 31-February 1st.  CTC, as has been reported elsewhere, has ordered NCRA to come up with a business plan or otherwise start writing up a proposal outlining how NCRA would cease operations.  This is why I'm more than a little suspicious of any contracts being written for resumption of anything on the far north end- seems to be very premature, given that CTC would need to weight in on NCRA's future, and there would in all likelihood need to be some action at the California state legislature to provide NCRA some sort of stable funding stream before it could really start looking for any additional money. 

I would be very interested in seeing NWP's business plan for the north end once it is complete.  Obviously they see something there if they consider restoring that part of the line to be feasible.  Personally, I have my extreme doubts....we're talking about a total estimated investment of $62 million to reopen that part of the railroad.  If it comes from private funding, whoever fronts the money is going to want to see some sort of a return on investment.  If it can't be privately financed, then the public gets to pick up the tab, through either special appropriations or grants, in either case almost assuredly derived in one way or another from tax revenues.  If they can get the line reopened and not have to necessarily finance all that work out of future operating revenues, then it comes down to a matter of can that isolated piece of railroad provide service at a price point and service level that both allows the railroad to pay for itself and be competitive with other transportation modes?  Since there would be no direct rail connection to the outside world, the only reasonable way this could work would be if whatever traffic they might handle goes through port facilities in Humboldt Bay, either by wholesale reloading cars to and from ships or barging railcars between the bay and somewhere else that still has a rail ferry slip.  Either of those would require additional port facilities or development that don't seem to be captured in the cost estimates.  I find it extremely difficult to see how that kind of a setup would be anywhere near competitive with trucks to reloads in Redding or even Willits for that matter.  There might be some ability to handle gravel and other construction supplies as intraline movements on the north end, but again I have trouble with the idea they could be competitive for that traffic.  The statement that such an isolated operation might be feasible also seems to fly in the face of the last comprehensive study NCRA did that concluded individual parts of the line could not be viably operated as independent segments...way back in 2003:

https://lostcoastoutpost.com/loco-media/loco-media/blog/post/20042/...

Bottom line, NWP and NCRA seem to think they have something, I have trouble seeing how it could be what they think it will be, and there seems to be some huge obstacles and pitfalls between where they now are and where they need to be before they can start really contemplating this project.  However, I don't have all the information they have either.  It will be interesting to see what comes out of the CTC meeting next week.

Jeff Moore

Elko, NV

 

Mr. Moore:

Many thanks for your analysis and contribution. 

Car loadings out of Eureka were significantly curtailed after the forest products industry was decimated by environmental claims that the industry was endangering the spotted owl in old growth forests.  It turns out that the spotted owl was being endangered by another owl, the barred owl which took habitat away from the spotted owl.  Of course, environmentalists aren't interested in truth, they just want to shut everything down and will use any excuse, including the "climate change" catch-all, to stop any and all economic development.

I remain optimistic that the environmental scam that was perpetuated on the N. California timber industry will eventually be rectified.  Should a renaissance take place, it may make sense to rebuild the line all the way to Eureka, but it would be hugely expensive.  Without a large demand for outbound timber or gravel shipments, it's impossible to justify the rehabilitation of roughly 300 miles of trackage that's been neglected for almost 20 years, especially with the 100 miles through the Eel river canyon in a very advanced state of decay.

AFAIK NCRA has always stated that an isolated short line at that north end would never be feasible as a going concern, but it seems the idea could have merit if the goal was to ship gravel north to waiting trucks.  As for tourist trains, I'm all for it, but these are difficult to make profitable.  Eureka Southern couldn't pull it off, but perhaps the profitable Wine Train can lead the way here.  Of course, numerically speaking, there are many more tourists to the Napa Valley than to Eureka or the Avenue of the Giants.  Personally, I do like Napa and Sonoma, but for stunningly beautiful scenery N. California is breathtaking.

Thank you for this information Jeff, I will be more cautious about believing what he says. I thought he was being truthful.

Who is Micheal Presson?

Supposedly he said that he is a sub contractor with NWP, I am starting not to believe what he says. He is a friend of mine.

"SVP" of NWP????

AFAIK NWP doesn't have a senior VP position.  Who is this?

A quick web search shows SVP is a consulting firm and this guy works for them. The plot thickens. Emilio, where did you run into this guy and what's his roll with the NCRA/NWP? 

He claims to be a sub contractor with NWP, and he said he has been on track inspection crews. I was reading about him on the Facebook group, and apparently he is a big fake. I ran into him on a train orders page, and he and I became friends.

I was just reading the comments under your post on FB,  looks like a guy to take his words for what they are worth....not much. 

Emilio:

This "friend" of yours, could it be our friend Tommy?  Kinda sounds like his/hers MO.

To the discussion on Michael Presson, don't overlook the possibility there may very well be preliminary studies and other background work ongoing in association with the business plan or other preliminary efforts associated with reopening the Samoa-South Fork and Willits-Windsor lines.  He could very well be involved in something like that as he could be doing anything else. 

To Dave S...yes, the spotted owl did have an impact, but it's not fair to blame all of the decline of the timber industry on the listing decision for that bird.  The redwood lumber industry on the north coast entered a steep tailspin starting in the middle to late 1970s.  The spotted owl was not placed on the endangered species list until 1990.  Advocates for both environmentalism and industry like to boil everything down to a black or white issue and point fingers at the other and scream how it's all their fault, if only they would go away all our problems would be solved.  When it came to the spotted owl the science the U.S. Fish & Wildlife Service relied upon showed a definite link between the rapid decline of old growth forests and the owl populations.  Not to say the owl could not live in other than old growth, as they have been shown to so do.  Also not to say that the barred owl did not have its own impact to the spotted owl, as that link has been demonstrated as well.  However, wildlife biologists had been documenting spotted owl declines well before the barred owl first showed up in Oregon in 1974, the barred owl only exacerbated a population already in trouble due to the loss of preferred habitat.

When you step back and start looking at the involved timelines, the timber industry on the north coast really hit its peak in the late 1950s through the early 1970s, then fell off rapidly after that.  The decline can be seen in NWP carloadings, which dropped from 65,000 in 1975 to 16,000 in 1982.  When the NWP applied for authority to abandon the line north of Willits in 1983, it cited the following factors as having caused the business declines:

1.  Frequent and extended line closures due to storms.

2.  Underutilization of the line by rail shippers, coupled with high maintenance costs.

3.  Permanent loss of rail traffic due to the frequent closures and service disruptions.

4.  Lumber competition from Canada and the Southeast greatly reducing north coast lumber sales and rail usage to eastern and midwestern markets.

5.  Steadily increasing use of trucks to markets where rail service had once been dominant.

6.  Reduction in prime timber cutting areas due the creation and enlargement of Redwood National Park.

7.  Continuing public subsidy of truckers through state construction and maintenance of the highway system.

Note in all these factors only one had anything to do with logging levels, that being Redwood National Park, which did voluntarily remove a lot of what at the time was second growth redwood and Douglas fir- plus a few remnant old growth stands- from industry ownership.  In addition to the above, one cannot overlook the decimating impact the stagflation and recessionary years had on the industry in that same time period.  I think the evidence is pretty strong as well that the industry cut far too many trees in the boom years of the late 1940s through the early 1970s, and by the middle 1970s competition for remaining timber sources coupled with all the other problems caused many mills to shut down.   

I find it fascinating to note that when the Eureka Southern came into existence in 1984 it served a grand total of eleven forest products plants in the greater Eureka area, specifically Simpson Timber Company in Korbel; Blue Lake Forest Products in Glendale; Louisiana Pacific flakeboard plant in Korblex; Sierra Pacific Industries near Manila; Louisiana Pacific in Samoa; Arcata Redwood between Arcata and Eureka; Schmidbauer in Eureka; Pacific Lumber in Fortuna; Louisiana Pacific in Carlotta; Eel River Sawmills in Stone; and Pacific Lumber in Scotia.  Eureka Southern's break even point as per Fred Stindt's NWP Volume 2 book was 30 cars a day, a number it rarely attained.  Thirty cars a day figures out to about 7,800 loads a year, far less than the 16,000 the NWP handled a scant two years before.  For comparison, the best month carload total North Coast Railroad ever handled was 605 loads in August 1994, which is essentially right at that 30 cars per working day figure.  Otherwise, North Coast averaged around 4,000-4,500 cars a year during it's operating life, which is something like 15-17 loads each working day.   

What makes this all relevant to the spotted owl discussion is that the first of these forest products plants to actually close after the spotted owl listing decision was the Louisiana Pacific plant in Samoa, and that didn't happen until sometime in the 1995 or later time frame, or at least five years after the listing.  The rest of the plants were still in operation when the NWP closed in the first days of 1998.  Only two remain in operation today.  Here's the order at year in which the rest of the mills shut down:

Louisiana Pacific Flakeboard- circa 1998

Eel River Sawmills- 2000/2001

Blue Lake Forest Products- 2002

Pacific Lumber- Carlotta- Formerly Louisiana Pacific- 2004

Pacific Lumber- Fortuna- 2005

California Redwood Company (formerly Simpson and Arcata Redwood)- 2015. 

Sierra Pacific- 2016

The only two forest product plants still running on the north coast are Schmidbauer in Eureka and part of the old Pacific Lumber plant in Scotia, now operated by Humboldt Redwood, though large parts of it closed down in the early 2000s.  That being said, the Schmidbauer interests have purchased the old Simpson/California Redwood mill in Korbel and should have it back up and running sometime in 2018. 

Bottom line, it's hard to tie any of these down to only the spotted owl issue.  Same for the wave of closures that happened well before the owl.  Basic economics, competition, paying one way or another for past exploitations of the forests, California's business and tax environment, sometimes draconian timber harvest practice rules designed to accommodate logging while preserving other important resources and species, environmental litigation, and a host of other issues have all combined to create the situation that now is.  The industry on the north coast figured out pretty quick how to continue logging around the owl when it became an issue.  A couple sweeps across the north coast area in Google Earth shows plenty of very recent logging operations and lots of scars of slightly older logging that are in various stages of regrowth.

One edit...as for tourist trains, those would almost certainly be operated baring some major difficulty by the Timber Heritage Association.  Getting such a train up and running around the Eureka area has, along with a redwood logging museum, been the overall goal of that organization for many decades now.  I agree such an operation would be risky, especially given that pretty much everything the group owns would require small to large fortunes to make operational.  Stations, bathrooms, parking, advertising, insurance, and a lot of other costs would also need to be budgeted for in any tourist operations.  It could work, but would take some serious resources to get off the ground and then keep going once running. 

I think I've gone on long enough for tonight.

Jeff Moore

Elko, NV 

   

 

    

Mr. Moor:

Many thanks for the thought and effort you invested into the above replies.  Very good information and a valuable contribution to this site!  It seems you might have enough material to write a well-researched book on the decline of the NWP, perhaps complimenting Fred Codini's work.

Cheers!

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