The United States Department of Justice, through Insignia/ESG, Inc. engaged LTK Engineering Services to perform an appraisal of the rail component of a barge/truck/rail transload property. A small portion of the property, including some railroad trackage, was being taken by condemnation due to reconstruction of an access road to an adjoining lock and dam. Even though small, the taking, left unmitigated, would have severed CSX’s access to the Terminal, along with access by the Wheeling and Lake Erie Railroad to an industrial complex.
The Department of Justice engaged Insignia/ESG and LTK to determine the loss of property value to Three Rivers Marine and Rail Terminal that the property taking would cause, as well as the cost of mitigation. Central to the appraisal was an in-depth analysis of the existing rail operation available to Three Rivers, as well as the options for rail operation after the taking. The value determination hinged on the overall potential utility of a marine/rail terminal property with different configurations of track and rail carrier access patterns. Although there were options for restoring CSX’s access, an unmitigated taking of track would have reduced track storage space available to Three Rivers and the ability to handle long blocks of cars. Both of these impacts could have had significant consequences on Three Rivers’s ability to attract future barge/rail transloading business.
LTK performed a comprehensive inventory of the rail facilities, including a condition assessment, and the serving rail carriers’ operations in servicing the terminal. One component of the value determination was based on the assets, developed from a reconstruction cost estimate of the rail facilities, less deprecation. The other component of value included analyzing potential terminal rail/barge transload capacity, particularly unit train handling using 286,000 pound gross weight rail cars. The unmitigated taking seriously impaired the terminal’s potential for handling whole train loads or even very long blocks of cars unless replacement tracks were located in an area of the terminal where they would consume valuable ground storage space. Another undesirable consequence was potentially reducing service from the regional rail carrier if their access to nearby industries were severed. Valuation analysis included the impact of higher rates from the potential loss of two-carrier service, and the potential loss of train load rates.
The analysis showed that it was prudent and cost effective to build the lock and dam access in a way that would provide for replacement trackage configured in the same manner as the tracks being taken. The replacement tracks were built shortly after the completion of the appraisal.