Elliston intermodal rail yard fight goes to state Supreme Court

Montgomery County says using public money to help Norfolk Southern build a transfer site in Elliston would be unconstitutional.

By Jeff Sturgeon, Roanoke Times – 5/20/2010

Frank Howard is fed up waiting for a final decision on the Elliston intermodal rail yard.

Given the possibility the Norfolk Southern Corp. project will claim his land, he said he doesn’t know whether to invest in his home or let it go to avoid wasting money.

He doesn’t know whether to move or stay.

“I just hate for the thing to keep dragging out, dragging out,” Howard said. “It’s been almost four years. It gets on your nerves, you know?”

Howard, 75, will have to wait a bit longer.

Trying a last time to block the rail yard, Montgomery County has won a date before the Virginia Supreme Court to argue the project doesn’t qualify for public funding.

The court announced Wednesday it will review a lower-court decision that allows the state to pay 70 percent of the cost of the $35 million facility.

Although the case is far from over, the high court’s acceptance of the case is a win for the county. With its legal bill amounting to $192,343 through April, this is the final chance for the county’s lawsuit.

“We are pleased that the state’s highest court recognizes the merits of our case,” Montgomery County Board of Supervisors Chairwoman Annette Perkins said in a prepared statement.

The case has divided an eastern Montgomery County community and challenges the state’s use of public funds for private projects.

Norfolk Southern proposes to convert 65 acres of eastern Montgomery farmland to a partially-paved rail yard for transferring freight containers between trucks and trains. Although the railroad has bought several parcels of land and in January demolished buildings and structures on them, construction has not begun.

Railroad spokesman Robin Chapman said the railroad had no comment on Wednesday’s decision to revive the county’s legal challenge but would argue the matter in the high court.

The railroad is counting on the project — especially the state funds — to support increased freight shipments on its soon-to-commence Heartland Corridor train service connecting the ports of Virginia with Midwest markets.

The Virginia Department of Rail and Public Transportation, which has defended its decision to authorize public funds for the railroad’s project, declined to comment.

From a statistical standpoint, the odds are favorable for a county win now that the high court has taken the case.

The Supreme Court historically reverses the lower court about 60 percent of the time once it accepts a case for review, said Steve Emmert, chairman of the appellate practice section of the Virginia Bar Association. It rejects the rest, in which case the lower court’s decision is final.

The county overcame the odds by being heard. Just 20 percent of civil cases are, Emmert said.

The court will hear arguments possibly in November and more probably in January, according to Lesley David, a deputy clerk.

In Elliston on Wednesday morning, shopkeeper Lucy Clark said the project has divided the small community.

“Half of them are for the railroad and half of them are against it,” said Clark, who co-owns Sunset Deli Mart, the closest retail business to the project site.

The county board of supervisors opposes the project on a host of nonlegal grounds including environmental and traffic impacts — but by law has no say in the matter. Federal law exempts railroad facilities such as this one from local review.

In court, the county has challenged a plan for the state to reimburse the railroad’s yard expenses to the tune of $26 million, saying the proposed use of tax proceeds would represent an unconstitutional giveaway of public money to a private entity.

The county also argues that the state cannot be a party to or have an interest in improvements other than public roads. If the state wants to support such a project, it should first amend the constitution, the county’s appeal said.

Without public funds the project won’t be built, the railroad has said.

Virginia has agreed to co-fund the project out of its Rail Enhancement Fund, which was set up by the General Assembly to support select freight and passenger rail projects offering public benefits to a region of the state or the state. The source of the money is a tax on car rentals.

The fund has or will allocate money to such other projects as a rail yard reconstruction at Norfolk International Terminals, a coastal port; Norfolk Southern track and terminal improvements in the Interstate 81 corridor; CSX rail yard improvements near Suffolk; and various passenger rail projects.

The last time the matter was in court, a Richmond Circuit Court judge on Nov. 18 rejected the county’s challenge, saying that because the intermodal yard would assist with the shifting of freight from trucks to rail, the yard has a public purpose justifying an expenditure of tax dollars.

The county contends the judge misapplied an exception that says the state can take an interest in projects that support the functions of government.