The City of Charlotte, N.C., and the Virginia Passenger Rail Authority (VPRA) each filed separate petitions for exemptions to the Surface Transportation Board (STB) to acquire and operate certain assets of Norfolk Southern’s (NS) track in North Carolina’s Mecklenburg and Iredell Counties and in Virginia’s Fairfax and Prince William Counties, respectively. STB granted both petitions.
On Aug. 16, in Docket No. FD 36785, CITY OF CHARLOTTE, N.C.—ACQUISITION EXEMPTION— NORFOLK SOUTHERN RAILWAY COMPANY, STB ruled that the City of Charlotte, N.C. (the City), “does not need Board authority to acquire certain rail assets owned by Norfolk Southern. The Board therefore grants the City’s motion to dismiss its notice seeking such authority. In this decision, the Board grants the motion of the City), a non-carrier, to dismiss its verified notice of exemption to acquire from NS an approximately 29.04-mile segment of rail line … The Board finds that the proposed transaction would not constitute the acquisition of a rail line under 49 U.S.C. § 10901 because NS would be selling only the physical assets of the rail line while retaining a permanent and exclusive freight rail operating easement to fulfill the freight rail common carrier obligation, and the City would not be able to unduly interfere with NS’s ability to provide freight rail service pursuant to the agreements between the City and NS. The proposed transaction therefore does not require authority from the Board.”
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According to Charlotte’s petition for exemption (download below), the city seeks to acquire from NS certain interests in roughly 29.04 miles of railroad right-of-way—part of NS’s “O Line”—located in Mecklenburg and Iredell Counties, N.C., and extending between mileposts O-0.04 at Charlotte, N.C., and O29.08 at Mooresville, N.C., as part of the planned expansion of the Charlotte Area Transit System (CATS) regional transit network “to better link northern suburban communities with the City of Charlotte.”
Charlotte will acquire the assets from NS subject to the Class I’s “retention of a permanent and exclusive easement as necessary for NS to continue to fulfill its common carrier and related freight services.”
Notably, the purchase agreement and comprehensive agreement expressly prohibit Charlotte from:
- “Providing freight service to customers located along the assets; and
- “Unreasonably interfering with NS’s exercise of its retained freight service rights and obligations over the assets.”
NS, according to the petition for exemption, will continue to operate over and provide freight service to customers over, on, and connecting to the assets after Charlotte’s purchase of the assets pursuant to the retained easement. Charlotte, through CATS, will provide commuter transit service over the assets. Charlotte will be contractually foreclosed from:
- “Providing freight rail service over the assets, and
- “Unreasonably interfering with NS’s provision of freight service over the assets.”
The STB on June 26 announced that the transaction may be consummated on or after July 10, 2024, the effective date of exemption (30 days after the verified notice of exemption was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) maybe filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than July 3, 2024 (at least seven days before the exemption becomes effective).
Separately, the VPRA petitioned the STB for an exemption from the requirements of 49 U.S.C. § 10901 for the acquisition by VPRA of certain real property, track, other improvements and a passenger rail service easement from NS located in Fairfax and Prince William Counties, and the cities of Manassas Park, Manassas and Alexandria, Va. Rail Regulatory Law, headed by noted attorney Kevin M. Sheys, filed the petition (download below). According to the petition for exemption, VPRA and NS reached an agreement pursuant to which VPRA will acquire from NS the land, tracks, and other improvements between (1) approximately MP 10.76 and MP 32.75 (the “Manassas Line”) and (2) approximately MP 9.25 and MP 10.76 (the “Seminary Passage”). The STB on Aug. 16 granted VPRA’s petition.
NS will retain an easement on the subject property to fulfill its common carrier obligation and other freight rail services pursuant to transportation agreements under 49 U.S.C. 10709 or other rights and responsibilities under the ICC Termination Act of 1995.4 VPRA also will acquire a passenger rail operating easement on the lines between approximately MP 32.75 and MP 33.6 (the “Manassas Segment”).
VPRA, according to the petition for exemption, also will acquire other land, track and improvements, including (1) a continuous strip of land defined in the CRA as the Broad Run Corridor, adjacent to the NS line of railroad between approximately MP 33.6 and MP 36.23, (2) land, tracks, and other improvements defined in the CRA as the NRV Station Parcel adjacent to the NS line of railroad between approximately MP N289.86 and MP N290.20, and (3) land, tracks, and other improvements at or near MP NB300.0 in Radford, Va. However, unlike the subject property, all of the other land to be acquired by VPRA either does not include track or the included track constitutes spur or sidetracks within the meaning of 49 U.S.C. § 10906.
Accordingly, the acquisition of this land, track and improvements does not require STB exemption or approval under 49 U.S.C. § 10901, according to VPRA.
VPRA also will have contractual passenger rail operating rights, including: (1) additional intercity passenger rail frequencies on NS lines between Alexandria and Roanoke, later extended to a new station (the NRV Station) in Radford, Va.; (2) operating rights on the line between approximately MP N257.5 (Roanoke Station) and either MP N289.86 (to a station parcel in Christiansburg, Va.)10 or MP NB300.0 (to a parcel in Radford, Va.) for a passenger trail layover facility; and (3) operating rights on the lines between approximately MP 33.6 and MP 36.0 for temporary access to Broad Run Station while a new access track is constructed.
The acquisition of these contractual rights does not require STB exemption or approval under 49 U.S.C. § 10901 because they “do not involve the acquisition of a line of railroad under the statute,” according to VPRA.
Aug. 28 Update
On Sept. 3, the Charlotte City Council will decide whether to spend $92 million to purchase railroad tracks and land for the Red Line project, according to multiple news reports.
According to reports by The Charlotte Observer and WBTV, the $92 million investment would be broken up into two purchases, with the first going toward buying the 22-mile O-Line from NS for $74 million, and $17 million to buy 1.6 acres of land near the Gateway Station, where a platform would be built.
The Gateway Station will be located at the intersection of West Trade and Graham streets on the edge of Uptown, which would “tentatively be the point where the Red Line would depart,” according to the WBTV report.
A difference in the plan discussed during a Monday presentation to Charlotte City Council, is that the Red Line commuter rail would no longer connect Uptown to Mooresville, but would instead end in Davidson. Despite that, “an agreement could eventually be reached to extend service into Iredell County,” according to the WBTV report.
It would cost an additional $17.75 million to purchase the 7-mile stretch of O-Line tracks in Iredell County, according to Monday’s presentation, reported The Charlotte Observer. The city’s agreement with NS would allow for the future purchase of all sevem miles, a portion of it or a lease-like agreement for access.
Earlier this month, the city proposed a one-cent sales tax increase across Mecklenburg County to help pay for the line, according to the WBTV report.
The proposed tax would have to “pass the state General Assembly before it could be added to the November 2025 ballot for voters to decide on.”
According to The Charlotte Observer report, “Charlotte plans to use short-term debt for the Red Line purchase. The proposed state bill ensures the city can be reimbursed for the purchase with the new sales tax. Charlotte would own the corridor until a new transit authority is created, which would then take ownership of the railway and operate the Red Line commuter rail. That’s in the draft bill the legislature also needs to approve.”
The rail corridor’s appraised tax value is $69.2 million, and the Gateway right-of-way’s is $15.9 million, city staff told council members, according to The Charlotte Observer report.
Under the proposed agreement, NS would still be allowed to use the tracks infrequently for freight trains, according to The Charlotte Observer report.
The Charlotte City Council will vote on the purchase during its Sept. 3 meeting. NS has given the city a deadline to close on the purchase by Sept. 9.
Sept. 4 Update
The Charlotte City Council on Sept. 3 voted to make the Red Line a reality, according to a WSCO-TV report.
According to the report, funding for the project means that the city is also looking at a sales tax increase. The council approved that proposal on Tuesday night, which will now get sent to lawmakers in Raleigh for their approval. If the legislature approves the tax increase, WSCO-TV reports that Mecklenburg County voters “will likely weigh in on it during the November 2025 election.
Councilman Tariq Bokhari was the only member to vote no both times, according to the report, stating that it is “the wrong time to pursue a tax increase and leaders need to think bigger than a diesel train.”
Other towns in Mecklenburg County will also weigh in on the plan, including Cornelius, which has already signaled approval. Meanwhile, according to the WSCO-TV report, Matthews is “staunchly against the tax increase due to the new plan potentially eliminating the Silver Line route near the Independence Boulevard corridor.”
Also on Tuesday, Huntersville Town Council passed a resolution supporting the Red Line plan and the proposed sales tax hike to pay for it, according to the report.
Sept. 10 Update
The City of Charlotte on Sept. 9 announced that it has completed the purchase of the O-Line from NS, culminating city leaders’ discussions with the Class I and plans that have been in the making for several months for the CATS Red Line Commuter Rail Project.
Last week, Charlotte City Council voted 10-1 to approve the purchase of approximately 22 miles of the O-Line railroad right-of-way, track improvements, and property rights for $74 million. Council also approved the purchase of approximately 1.6 acres of property and any associated property rights located near the Charlotte Gateway Station for $17 million.
