Lackawanna Cut-Off – Part 18: Interview with Larry Malski

August 24, 2019

One, two, three…one, two, three. CHUCK: Here we are inside the Bridge 60 Tower,
which is the home of the Pennsylvania Northeast Regional Railroad Authority and we’re
here to speak to the president of the Pennsylvania Northeast Regional Railroad Authority,
Larry Malski. And Larry, I’d like to certainly thank you for your time to allow
us to interview you and talk about some history and also looking into the future,
which is I think a very interesting thing that many of our viewers would be
interested in. But before we even start with talking about the history of the
effort to save the Cut-Off and the mainline in Pennsylvania, I’d like to talk a little bit
about yourself, because you have been involved with this effort for a very
long time and maybe you can start from wherever you wish to begin
and tell us about your background and how you came to be in this office I
guess I would say. LARRY: Well, first, I’d like to welcome you and thank you, Chuck, and
commend you for again the work you’re doing on this: the Lackawanna Cut-Off and
the entire project between Scranton and New York City is something that’s been
around for all quite a while, actually since the termination of service. I think
it’s excellent that you’re putting together this series of
historic and factual background on what has happened and, maybe much more
importantly, what is going to happen in the future.
So, I just want to say that up front and to commend you for that. Just a little background…I’m kind of
a native to the Scranton area of Lackawanna County. I was born and raised
in Dickson City, which is the first city just north of Scranton on the old D&H
mainline. I went to Penn State undergrad; I graduated from law school at
Temple University in the Philadelphia; and I went on to enter the field that I
hope to enter, which was the railroad industry. While I was in college I was
very fortunate to have the opportunity to work for the Delaware & Hudson as my
first employer. That was back in late June of 1970 when I hired out as a
clerk a yard clerk right here in Scranton. So again my roots go
pretty deep here. I also worked for the Erie Lackawanna during my college years. As you probably
know, that was during that Dereco years where the Erie Lackawanna and the Delaware &
Hudson were under common management under Dereco owned by Norfolk &
Western. So those were my college years. But I harken back to that time,
that’s maybe some of the most joyful and interesting times of my career because I
got a really good start in the industry from the grassroots level working as a
yard clerk, computer clerk, and a rate clerk, actually for those roads. After
graduating law school I did go to work in Washington, DC, with the United States
Railway Association. I was in the litigation department. As you might
recall, there were all kinds of litigation that stemmed from the Conraill structure.
After USRA, four years down there, I was very fortunate to get a job with
Walter Rich as his general counsel in Cooperstown, New York, working for the New
York, Susquehanna & Western, where I was for about four years. And it was four years,
but it was I got about 10 years’ experience up there because Walter was
quite an individual to work for, and many, many times we would be working seven
days a week on a regular basis. But it was a very fascinating because it
was during the time that we acquired the Syracuse and Utica divisions from
Conrail. We negotiated the trackage rights of the Delaware between Port Jervis and
New Jersey and Binghamton. And we actually bought the Susquehanna from the
bankruptcy trustee. So it was a very interesting period of growth on the New
York, Susquehanna and Western and the Delaware Otsego System. After that, by a fluke, I
actually had an opportunity to come back to my hometown, which is pretty unusual, in
that it was the early 80s and Guilford owned the Delaware & Hudson and the D&H
main between Scranton and Carbondale was being downgraded severely to the point
that most of the line north of Scranton was actually taken out of service. And
they did have plans to basically liquidate it, take up the rail, etc. So I
actually came down as a consultant to Lackawanna County, who was looking at
trying to save the line for economic development purposes. Since there was no
one else to purchase the line, there were no private interests interested in
purchasing the line, and it certainly faced certain liquidation. I came down, did my
consulting duties, made the recommendation to Lackawanna County that
there’s always a risk involved, but it’s worth saving this line because once you
lose the line, once it gets liquidated, abandoned and ripped up, obviously, it’s
very difficult to bring back, and came up with a recommendation to form the rail
authority, which we did. And kind of the rest is this history. You know we
started off 34 years ago with that and our first year of operation, through a
private operator, which we went to an RFP and hired to run the system, actually, we had
about 500 revenue cars. And this past year, actually, this year, 2017, we’ll be
having a record year of well over eight thousand cars. So it shows that
when the local governments get involved to save these rail lines, it’s a very
good decision for the future. And that’s kind of where we are. Of course, part and
parcel of what was going on in the early 80s was the downgrading of a lot of
lines in Northeast Pennsylvania and New Jersey,
the main one being the former DL&W, Lackawanna, Erie Lackawanna main line.
After we were able to save the Carbondale Line, a very similar scenario
played out on the Lackawanna main line through the Poconos. Conrail was in the
stages of abandoning; they actually had formerly abandoned a lot of it, and they
were actually starting to liquidate it: pulling spikes, getting ready to lift the rail.
And again we basically were able to use the local rail authorities as a safety
net since no private interests wanted the line at that point and Conrail
really didn’t want to sell it to any private interests, quite honestly. So the
local government safety net of the rail authority was there to save the
line, to save the railroad, and, a la, here we are today, 2017.
CHUCK: So what was your first involvement directly with, I’ll either say, saving
the line here in Pennsylvania, and to what degree were you, let’s say, observing
what was going on in New Jersey? Maybe you could say a little bit about that. LARRY: Yeah,
it was very interesting in that, again, I was working for Walter
Rich in Cooperstown, and obviously the Susquehanna was based in New Jersey–the
original Susquehanna–so I was tuned in to what was happening, obviously. The State of
New York, with some foresight, put a lot of money
into the Delaware Division between Binghamton and Port Jervis,
so that Conrail did operate and save that line. That was not the case with the
Scranton Division, which, of course, ran through Binghamton, to Scranton, and New
Jersey. So, I had a pretty good insight as to what was going on. But we
really got involved again when we formed the rail authority.
And at the same time, Monroe County through the Monroe County Railroad
Authority, which was formed in 1982, was up and running again as a grassroots
organization of last resort, because, again, there was no private interest
involved in trying to save the rail line through Monroe County. The Monroe County
Rail Authority took up the the lead in trying to preserve what was there in
Monroe County. From a very early point ,both rail authorities worked very close
together as the safety net to save the entire line. And it was in the, probably,
the early, the mid-1980s, that we saw the handwriting on the wall. Conrail
told us what the handwriting on the wall was. You know,
an action plan had to be put together to save the line all the way to the Delaware River. CHUCK: So when Conrail puts the line between
Port Morris and actually Binghamton out of service, initially it’s the D&H that
steps in. Is that Guilford, I’m trying to think in those days…? LARRY: Guilford owned the D&H, yeah. CHUCK: …and picks up the section west of Scranton to Binghamton, I want to
say somewhere towards the end of 1980. I’m wondering what effect does that
possibly have, in your opinion, on, let’s say, Conrail’s view of the rest of the
line. Do they think, okay, this is one piece that D&H is now putting
together. Does now the section east of Scranton become, like, could they be
thinking about getting into that? I mean is there anything to that, in
your estimation? LARRY: There was a connection. Obviously, Conrail made the decision
to get out of the entire line between Binghamton, Scranton and Northern New
Jersey. So that was kind of cast in stone. So once that happened, and they sold the
Scranton to Binghamton section of the old Lackawanna to the D&H, that was kind
of another shoe that dropped. At that point, from Conrail’s perspective,
Scranton to Northern New Jersey through the Poconos was superfluous.
And, in fact, again, the handwriting was on the wall in that what few remaining
shippers were left on the line, industries were left on the line, were
encouraged, let’s leave it at that, by Conrail to move elsewhere or to
leave. And there were some major entities, such as the Chrysler on-loading
facility at Mount Pocono. They were encouraged to leave. They did leave. They
moved their operation from Mount Pocono to Northern New Jersey, and whatever else
was still remaining on the line was pretty much shut down. And that’s when
Conrail went into the abandonment mode. And again, large portions of the main
line between Scranton and the Water Gap were legally abandoned so they were in
the process of not only putting it out of service, but Conrail was starting
the process of liquidating it, pulling up the spikes, and getting ready to remove the
rail. So it’s really at that point we had to move or it would be ripped up, and that would be the end of it. CHUCK: Which brings me to my next question, and
in a sense asks you to put on your attorney hat. And that is, what happens at
abandonment that makes it so difficult –not impossible–but difficult to bring a
line back? What happens legally, I guess I’m asking, that is an impediment,
that wouldn’t be there, if the line were not abandoned formally? LARRY: That’s a very good
question, and it’s one, and I don’t want to bore everybody with all the technical
legal details, but it’s an extremely important question because it’s really
shown in history what’s happened to many lines that haven’t been saved, and it
really relates to what happened to the Cut-Off, to be honest with you. Without
getting into all the specific details, a lot of bad things happen when the line
is officially abandoned, number one. But, even worse when the rail gets lifted. And
the reason for that is, there’s a myriad of reasons, but one right off the bat is
from a legal perspective once you take the rail up you really get into the
legal technicalities of what type of title the railroad has. And what that
means, basically, is if they didn’t have a fee simple title, which is the best title
you could have, there are many areas–and you have to read each deed so it’s not
carte blanche, this applies to every line–you really have to get
into the technicalities of each deed that the original railroad used to acquire this land. But
once you actually lift the rail, in many cases it triggers what’s called a
reversionary interest, which means that in some cases if the language is in
those particular deeds you actually lose the title to the property. So, the
mere fact of abandoning, which is a legal process through the ICC–the Interstate Commerce
Commission–is one step in the grave. The second step in the grave is lifting that
rail. By lifting that rail you could bring to bear the legal extremities of
actually losing the land, too. In other words, those deeds were actually conditioned
on having the rail there; once the rail is actually gone–i.e. liquidated–lifted,
ripped up, the land actually could go away and revert either to adjoining
landowners or to other parties. So, it’s a pretty bad situation when that
happens. CHUCK: So you were saying just before that Conrail, speaking in
Pennsylvania–obviously we know what was going on in New Jersey–but in Pennsylvania
they’d actually progressed to that point where abandonment…
it wasn’t formally abandoned? But obviously they were, what, petitioning
for abandonment, or what? LARRY: As I said, it’s a it’s a two-step process into
the grave: number one is abandonment, and Conrail had
filed formal abandonment proceedings with the Interstate Commerce Commission
and got orders for abandonment. So there were large portions of the Pocono mainline
that were legally abandoned. So that was, again, one foot in the
grave. The second foot, like I said, is ripping the rail up.
They were poised to do that and actually started to do that by pulling spikes and
things of that nature when, again, at least we had the structure in place, the
rail authorities as the last resort, to save as a safety net, to save it, and
through the rail authorities we were able to bring negotiations with the likes of
the governor of Pennsylvania, Governor Casey; Senator Specter, at the federal
level; former Governor Scranton; and some very
important people in their organizations. One I just want to mention
is Andy Wallace, who was a Senator Specters’ chief aide, and was very, very
helpful in the day-to-day struggle to negotiate with Conrail, and changed
their decision to lift the rail up on the Pocono mainline. CHUCK: So, obviously, there was
political support, political support as in politicians, but presumably there was
also local support, I’ll say, grassroots, or even the press. I think you
know there must have been quite a bit of activity in the press that covered
this– certainly in New Jersey was almost a six-year
period between 1979 and 1984– but the visibility of the peril, I
guess you’d say, to the rail line must have struck a chord particularly here in
Pennsylvania. Certainly it did in New Jersey. I can speak to it that it did. But I’m
wondering how did that help or hinder because the press, we know, can
play out in many different ways, sometimes unpredictably. But how did that
actually play this–and then also I’m thinking of the bizarre situation with the World
War Two tank that was brought out at some point. That those kind of things, and
with even the Amtrak run in 1979 that brought visibility, even if
nothing came out of the Amtrak run directl,y it definitely created a
visibility that probably would not have been there otherwise. And I’m wondering, though,
putting all that together ,did that in a sense create interest that
might not have been triggered any other way? LARRY: Well, it’s a very good question
because it does go to the heart of what the public
involvement in this was and, you know, you hear so much in this day and age about
heritage, and heritage is preservation and everything else. Well, there was no
other heritage preservation effort that was more
important than this rail line, the Lackawanna main line, because it touched so
many families and people in Pennsylvania, but especially in Northeast
Pennsylvania. So many people, parents, you know, either worked or rode. So many
people actually did ride the last trains, passenger trains, on the railroad.
Just a quick side story: I remember getting out of school and
riding the last eastbound train on January 5th, 1970, with a good friend, Jim
Kilcullen, between Scranton and Hoboken. And, again, it was a very sad day. But I
think from that day on everyone felt that that’s something that has to be
restored at some point. But the point is the press was very involved in this
because it was so important to our heritage, which touches a nerve to
everyone in Northeast Pennsylvania. But also the future economic development in
Northeast Pennsylvania was going to be gone and stripped of this transportation
asset, which which had brought all the jobs, which all of the coal, which
provided all the jobs, to Northeast Pennsylvania.
And here it was after close to 150 years about to be dismembered and
liquidated. So it was a rallying cry. The public was very supportive. The
decision had to be made and I just gave the advice that if you don’t do it
now it’ll be gone forever. And, was it a risk? Sure it was risk. Anything you
do is a risk. But if you didn’t take the risk,
you’d be foregoing the economic future of Northeast Pennsylvania. And, again,
I just mentioned the car loads, which is the main indicia of success in the
railroad industry, kind of prove out that thank God that everyone collectively was
able to make that decision back, well, over 30 years ago now. CHUCK: As we sit
here in Scranton, which would be the end of the line if the full build-out,
whenever that takes place, for the extension of the Cut-Off across into the
Commonwealth of Pennsylvania. But I’m also drawing back on what you were
saying just now how the line had played such an important role in
the economic vitality of the whole region of Northeastern Pennsylvania. I’m
wondering that it must have been quite a shock that there was a risk that the
line would have been abandoned, that this, in a sense, had to change the paradigm of
not only the people who live here, but the politicians who would have to be able to
create some entity that could preserve it. That’s where the rail
authorities come in, and they play that role, but that didn’t happen immediately,
that I have to imagine it took a little bit of time before that
actually took place. But it’s actually a testament to the people
of Pennsylvania that they were able to save this line even though it–I didn’t
really realize that that there had been formal abandonment–so you’re
kind of in a sense pulling the the railroad metaphorically
out of the fire. LARRY: Yeah, it was again, I refer to it, there’s other steps to it,
just in a general sense, there’s two steps to the grave for a
rail line: one is formal abandonment by the owne,r and the second is liquidation,
i.e. lifting the rail, getting rid of the ties, and just basically liquidating
what’s there. So we had one foot in the grave. I can recall probably the pivotal
meeting that was held in Conrail’s boardroom in Philadelphia with President
Jim Hagen of Conrail, at which time Governor Casey, Senator Specter, and there
were many others. Former Governor Scranton was very much involved. Again,
Andy Wallace, who worked for Senator Specter, was directly involved. Then
there’s many others, and people like Bob Hay,
the Monroe County Railroad Authority; and Ed Rogers, who’s one of my board members, got
together, and it was at the urging of Governor Casey that Jim Hagen made the,
at this point, very meritorious decision on his part to tell his troops to stop
the liquidation process, i.e. lifting the spikes, taking the rail up through the
Poconos, and that they would do a deal with us, the rail authority, to convey the
line to us. That was probably one of the most pivotal meetings and saving the
rail line in Pennsylvania and Jim Hagen followed through with his word and it took a
series of years to convey the line to us. But the line was eventually conveyed to
the Monroe County Rail Authority, Lackawanna County Rail authorities over the
years. And again, there were no shippers; the shippers were gone. There was nothing
there. There were literally trees and bushes growing up between the ties,
especially in the Mt. Pocono to Analomink section of the
line. So it was a high-pressure, high-stakes game. But the
right parties came to the table at the right time, and I have to give credit
to Jim Hagan for the decision to convey it to us, because otherwise it
would be gone now. CHUCK: What year is that? LARRY: That year, I’m trying to
remember exactly…I’m probably going to get it wrong.
It was, I’m thinking, the mid-80s. I don’t remember the exact year, but
everything was gone. The shippers were gone. Like I said,
portions of it were legally abandoned; and it was in the liquidation phase. So, it
was fairly critical. CHUCK: Because one of the things which becomes apparent now– to just give a little bit of background,
which I would have covered at the very end in my previous episode 13, here in
episode 14–where in 1979, the last of the freight, actually it’s the end of ’78, that the
last of freight is carried over the line. There’s actually some that is carried
locally in Pennsylvania but the Cut-Off is put out of service at the
beginning of 1979. Passenger service has been gone since 1970, as you point
out. So at that point what happens is that, which has never happened before, was
that Pennsylvania, I think, has to think of itself as being separate from the
rail line in New Jersey. Because before it would never have been
something you would think about. Oh, it’s one main line. But now it’s really, in
that sense, two separate lines. Even though, at least that up until 1984, were
still connected. And they have, in a sense, separate interests. Or, let’s say, separate
political mechanisms that would be needed to be enacted in order to
preserve them. Because, as you know, as they say, all politics is local. New Jersey would have
to do their part for the Cut-Off and Pennsylvania would have to do its part
for the line in Pennsylvania. So to me I know there’s been an observation,
and which we’ll get into in future episodes, about the focus on
Pennsylvania, but clearly you folks have really done a yeoman’s job in
trying to not only preserve the line but also build the line up, build the
freight business that didn’t previously exist. That’s quite an
undertaking, to say the least. And to be successful on top of that as well,
you should be highly complimented for that. LARRY: Well, and let
me just answer it, and give some background on both sides of that. Number one, yes,
but the other thing we realized then again if we didn’t as locals, at the
grass roots, the counties, if the counties didn’t do something–local government–if
they didn’t do something, the lines would be liquidated. So that was the first
major realization that had to be made. But, you know, we weren’t in a vacuum. We
were talking with our friends on a local level in Warren and Sussex counties,
New Jersey. So it wasn’t in a vacuum and it wasn’t like Pennsylvania, New
Jersey, and never the twains shall meet, because that wasn’t the case. They were
going through the same strife that we were. So we were sharing ideas; we were
forming partnerships. And, again, I have to
mention the people that we worked with over all these years: people like
Frank Reilly and Tom Drabik and the others; and, you, Chuck; and the other
organizations that were involved over there to keep the idea and the
dream of putting it back together way, way back then when Conrail was actually
pulling the rail up in New Jersey. So it goes back a long, long way. You know, as
things then evolved, kind of flash forwarding a little bit–maybe I’m jumping
ahead here a little bit, but it ties in– things weren’t just static. Unfortunately,
they weren’t able to save it in New Jersey. There were no private interests;
there were no local rail authorities in place to do
what we were able to do here in Pennsylvania. But flash forward, because
of those local grassroots contacts in Warren and Sussex counties, and the
political structure involved therein, we were, and they were, in
partnership able to bring it to the point of even after Conrail ripped up the
rail, sold the property to private interests–which is really the death-knell
almost in any case of bringing a rail line back–they were able to get to
the hurdle of having the state come in and condemn what
Conrail actually sold, which was the Cut-Off. And I know I’m flashing over an awful
lot of years, and an awful lot of strife that went into that, but the miracle was
that they were able in New Jersey to come back to the point of actually
condemning it and getting the title back, because it could have easily been cut up,
sold off in pieces. The fills could have been taken away. There’s so many things
that could have happened to actually preclude any possible future restoration
of it. So, again, the local counties, Warren and Sussex, and everyone
else involved: New Jersey Transit, New Jersey DOT, and the
political structure in New Jersey, had the fortitude to come back and do what
is almost impossible. That is, condemn the right-of-way, get it back in
their ownership, and bring it to where at least we’re back
to the point of laying track. CHUCK: And essentially that’s where this particular
episode ends. But the thing is that you raise a very important point, and that is
that, in a sense, clearly in the first round, if you will, in terms of New Jersey
and the Cut-Off, the effort to preserve the line failed. But ultimately
you have to think that–and that’s what you were able to do here in
Pennsylvania–is that ultimately the line would have had to end up in
public hands anyway. Because I think you could probably use examples
and elsewhere where rail service is being proposed–passenger service,
commuter service–and where there’s a private railroad that owns the trackage
and it’s thought, well, you know, gee, the tracks are there and all you
have to do is run trains. But dealing with a private entities is a lot
different than dealing with a public entity. And I’m wondering now that
the scenario that played out that that was the scenario that had to play
out sooner or later. It would have been nice if the tracks had never
been taken up in New Jersey. I think we all agree that that would have been so much
more helpful and made things a lot easier, in that public ownership removes
certain impediments that would be there if it were not in public ownership. LARRY: Right,
and this again might be jumping ahead, but you know the the most asked
question is “Why is it taking so long?” Again, that rail line, the Cut-Off in
New Jersey, was as close to dead as any rail Iine ever got. And, in fact, it was dead
just about: it was resuscitated at the last moment through this
condemnation. But when I say that, that took years and years and years. Like I
said, once the railroad was sold, because Conrail sold the Cut-Off in
New Jersey to private interests, it was years it was held by these
private landowners, basically, and it took years for the condemnation, for New
Jersey to make the decision to go through with the condemnation to get the
money. Because you’re talking now close to 25 million
dollars to do this thing, as far as the condemnation, and then to go through the
condemnation process, it took years and years and years and years. And I know
it’s not what people want to hear, but that’s the history of it, and
that’s what happens when you let a rail line go to the point of the rail being
lifted. This is what happens; it takes years to come back.
I’m not trying to make excuses, but that’s just the facts, and that’s what happens
when a rail line is not only abandoned, but liquidated. CHUCK: The thing is with most
rail lines, in a sense, you don’t have this problem. In other words, when most rail
lines are abandoned no one’s really thinking about, well, we’re going
to think about bringing this back right away.
And, actually, that thinking was already there before the rail was removed. So
this was an effort that, in a sense, goes back to almost to the days
that where the line was put out of service, where the threat was obvious at
that point, and it played out over the next next five years after that in New
Jersey. But the effort never died. LARRY: Right, it was kept alive. And
that’s a very good point. It was kept alive. And, again it was kept alive, like
I said before, at the grassroots level, at the counties level. The counties knew
that there was no one else there. There were no private interests; there was no
other interest, there was nobody else around that wanted it. And
they had to make the conscious decision to take the risk of saving it for
future generations, and it was kept alive. The dream was kept alive. And as long as
that dream is alive the entire thing will be put back. Here we are back in Bridge 60 Tower in
Scranton where we are talking to Larry Malski, who is the president of the
Pennsylvania Northeast Regional Railroad Authority. And in this segment we’re
going to concentrate on the time period between the abandonment of the Cut-Off,
which would the end of 1984, all the way up to the time that the Cut-Off is acquired
by the state of New Jersey in 2001. That’s a wide swath of time and in my
subsequent segment of our interview here I will go over much of the activities
that took place during that time in New Jersey. But we’re going to talk to Larry
about what was going on here in Pennsylvania during that time because
a lot of key developments took place during that time, which led to
further development of the rail line now in the modern time, in the modern time
meaning at this time 2017 -018. It’s good to look back where
we came from, not only in New Jersey but also in Pennsylvania. So welcome back,
Larry. When we get to the the mid-1980s, we’re looking at a rail line here in
Pennsylvania in which either you have or are in the process of acquiring from
Conrail, but which Conrail has basically let wither on the vine, and you’re
almost starting from scratch. I don’t know if that’s a adequate or an apt term, but
you weren’t handed off a line that Conrail had been doing their best
to try to invigorate. It really was quite the opposite it seems, based
on our discussion. So, when you–
“you”, meaning the rail authorities–maybe you can explain how
this works with the rail authorities, the operators and so forth, how this now
during this 16-17 year period, how this all works.
Basically, how do you grow a railroad that has been handed over
and really hasn’t been nourished as it could have been? LARRY: Well again you’re
right, this was very much a case of a railroad that was so close to
annihilation, basically. Buying it was tough enough.
Getting all the things in place to get Conrail to convey it to us was one major
step. The bigger step, quite honestly, was rebuilding it, because it was in such
dire straits. Like I said, in many of the sections, the one especially that was
again legally abandoned between Mount Pocono and Analomink; that’s a nineteen
mile stretch, there were trees growing between the ties. I mean there was no
maintenance; there was no nothing. Nature was literally reclaiming it. Again, thank
God, we at least saved the rail in place. So it was a huge effort to bring it back.
All the shippers were gone. There were no industries.
There were no customers, basically, on the
line to run trains on. So it was a case again where there was no private
interests that wanted it because there was nothing there, it was gone. We,
basically, were able with the good graces of the state, the governor,
PennDOT, the PennDOT Bureau of Rail Freight, which was very helpful in
attempting to come up with some grants to at least bring it back to service,
and put it in service. Because, again, you really couldn’t even run on the line to
be honest with you when we were able to take it over.
We then, again, went through an RFP process, or a request for proposal
process, to try to find a private operator, because that was the intent. The
intent was never for the authority itself as a local government entity
to run it, although we could because we are–the local rail authorities are–
actually certified common carriers under federal law, under the ICC, the way we
purchased it. So we’re considered common carriers from a federal law perspective. But the
intent was to bring in a private rail operator through an RFP process,
which many other communities, counties, and other entities across the United
States have used as a very successful means of returning a rail line to
service. So we did that. We went through RFPs; we put the line out.
It was a tough RFP because you’re basically asking for someone to come in
to run a rail line with no customers and no traffic on it. But we were successful in
doing that. We brought in a private rail operator. The first years were very, very
difficult. That private operator was able to get state funding to rehab the line
and bring it up at least FRA Class 1 standards–and then
higher standards. And the good news is that this was during the period of deregulation.
That was a turning point in the rail industry. That was really the start of
the rail renaissance of the rail industry. And without
getting into too much detail, it was basically a change in federal regulation
which allowed the railroads to compete on a more even playing field with the
trucking industries, the water carriers, the large interest people, all the other
people who hauled freight. And it started to really open doors in
the rail industry because we were able to compete and go after some of the
traffic that was lost. When we got the line open we had the ability to
start marketing it. Our private operators basically went out and hired marketing
people and groups to go and market the line saying: “Hey, here’s a rail line. It’s
back to life. It’s running. It’s able to run.
We’ve got industrial sites”, and those private rail operators were able to work
with us, collectively, and the local economic development groups, the
industrial development authorities, all the other economic development groups,
the governor’s action committee, entities like that, to find leads to bring
industries back in. We brought some small ones back in, which were great, but I have
to say the home run was the location and siting of the Amber Mills flour mill at
Mount Pocono. That was probably the keystone of bringing the Scranton-Water Gap rail line back to life. You know without rail customers, without
rail cars, without car loadings, you really don’t have a viable railroad.
And that was the home run. It took three years because there was some local
property owners who didn’t want an “industry”
in that area of the Poconos. They felt that wasn’t a good idea.
Again, this was a flour mill; it made flour; that’s food. But they didn’t think
that was a good thing. So, we were held up for three years. But, you know, luckily the
industry, which is a multi-billion dollar industry out of Minneapolis, did
their research, did their homework, and thought that Mount Pocono was the perfect
place to produce flour for the entire northeast coast, especially in the
Northeast Corridor, because it’s so close to the market. And, again,
you’ve got the one of the largest consumer markets in the country in
that 100-150 mile radius of Mount Pocono. So, they picked a spot based on a
logistical analysis that they did and they stuck with us. And after three
to four years of struggles in getting the permitting and all the other things we
had to do. So, again, I could remember at that time people saying: “What’s taking so
long? Why is this taking so long?” Well, anything you do in this day
and age, be prepared to have obstacles or critics or whatever placed
in your face. And we had them. So it took three
to four to five years to get that thing finally to the point of being built. It
took a year and a half to get it constructed because of such a major,
major facility. It was a forty million dollar investment, which still is big but
back then was a lot of money. And that really was the thing that got us going
on the economic road to the success we’re at, the level we’re at now. I
mean that entity basically was designed to bring in unit trains of wheat from
North Dakota, South Dakota, the entire Midwest.
Bring the wheat here; they mill the wheat; they turn it into flour, and the flour
is distributed to every bakery and pizza parlor and you name it that you
could think of in the northeast section of Pennsylvania, Northern New Jersey,
New York City, Philadelphia, the entire market. So it was meant to serve one of
the largest markets in the country and that’s what it’s been doing now for–
it’s hard to believe, but it’s going on 20 years’ anniversary with the mill. But what that
brought, of course, was unit trains on our lines.
CHUCK: You say unit trains….LARRY: Unit trains or trains of 50, 75, up to 100 cars of
wheat that would come as a unit from North Dakota, South Dakota, or the Midwest,
to Mount Pocono. CHUCK: They have the storage space for all that? LARRY: Oh, yeah, the silos
up at the mill, again, were all concrete construction.
Again, it was amazing to watch the construction phase;
it’s all concrete. It can hold 260 cars. And, of course, they grind on a daily
basis: it’s a 24/7 operation, 365. So they’re making flour
constantly. You know, you have to keep that supply
chain open. You got to make sure they have the wheat there on time: the
right type of wheat because there’s different varieties of wheat. So it’s a
fairly complex logistical process. But it brings a lot of car loads and that’s
really what kind of put us on the map. That came along, and then we were located a
propane terminal at Mount Pocono; a very large lumber treating industry in
Cresco. One just followed the others. Each one was a calling card for the next one
because when we had the main card at the flour mill and somebody came along and
said: “Well, what is this line? We understand you just brought this back to
life. Is it really going to be here?” We usually would just take them to the flour
mill, and they’d say: “I guess it’s going to be here for a while.” Because they saw that
investment. So it was it was just then, it kind of fed on itself and
really brought it back. And our private rail operators were
instrumental in doing the marketing and bringing a lot of this in. And we
obviously worked with them on that and, again, all these other entities that are
out there, the economic development entities, the governor’s resources team,
people of that ilk. So it was a collective effort
and worked out to the point that we have now. So it was it was what we needed to
prove to the critics when we bought–and again, and there were
critics when we bought the line, saying: “You know, this is a white elephant. Why
are you buying this thing? The private industry, the private sector abandoned it.
What are you doing this for?” Again, the flour mill, I think, and the other shippers,
all the other shippers, and the over 8,000 cars now that’ve run over
this line are a testament to taking the risk, taking the gamble, but for the
good of future generations and economic development. If we hadn’t done this none
of these new industries in the Poconos, in Monroe County, would be there. So,
that’s why you take the risk. Unfortunately, like I said, it usually takes much longer than
anyone hopes for. Well, you have to persevere. I guess the key word is
perseverance. And not to beat it to death, but we had critics with
the flour mill saying: “You’ll never build that thing. They’ll never locate there.
That’s not going to happen. It’s a short line. They’re not going to do that. It’s
just not going to happen”. And that went on for years, to be honest
with you. Again, the proof is in the pudding. But you just have to persevere
with these things. And now, you know, you’re not going to win everyone but
perseverance is going to get you in the game to win most of them. CHUCK: Now in terms of
bringing in customers to the line, and I’m thinking the flour mill, was that, what,
the Chrysler facility? LARRY: Right, it was the Chrysler facility, which Conrail
basically encouraged Chrysler to leave that facility and moved to Northern New
Jersey when they were getting ready to abandon the line. And that was the
facility that was put back to use. Quite honestly, a flour mill in railroad
parlance is probably one of the best industries you could locate. Because like
I said, when a private milling company invests forty million dollars it’s not
the type of thing you can pick up and leave. We’ve had some people say: “You
should have gotten another auto industry in there.” Well, we tried, to be honest.
We had auto Interests look at it. But you’ve got to remember back then, as is the case
even now, auto contracts and auto distribution contracts usually are three
or four year, five year contracts, and they can pick up and leave pretty easily. The
key with the flour mill is it’s about the most substantial type of Industry,
manufacturing industry, which is really needed in Northeast Pennsylvania.
It’s the most substantial type of manufacturing facility you
could imagine because of the large investment. Once you build a flour
mill it’s not the type of thing you could say, well, we’re gonna move it or
–well, first, you can’t move it but even if you’re gonna leave. But it’s been
highly successful and like I said, the work that they did, Amber
Milling did, to locate it there has paid off tremendously because they could
reach all these markets in the largest market in the United States. CHUCK:
That would be jumping ahead, but I’m just curious as we speak about with
locating customers on the line, if we talk about like the Cut-Off, one of the
problems with the Cut-Off if you were going to look at it from a perspective
of operating it as a freight line, would be that because the way the line
was constructed there really are no places, with the exception of maybe the
station at Blairstown, where you put a siding back and, maybe, at the three
stations–Greendell and Johnsonburg–but the rest of the line just isn’t
conducive to having a place where you could build an industry and have a
siding or some kind of connection to the main line. I’m wondering are there still
places where you can foresee here in Pennsylvania where there’s still
availability. In other words, not every spot is going to be conducive if
the rail line is well below where your site is. It may be almost
logistically impossible to make a connection. But you would think that if
you have a flat area–Chrysler, of course, would have been an almost ideal spot.
Do you have others that are identified? LARRY: Sure, our private
operator, the Delaware-Lackawanna, right now is working, as we speak, with
entities, marketing entities, and other organizations to locate new industries.
This past year, the Delaware-Lackawanna located two new industries on our
system. So, yes, that’s a constant thing. That’s what you hope
your private rail designated operator will do and that
they are doing that they were very successful at that. The Cut-Off,
you really go to the heart of it. Just
because of its physical characteristics, it’s 28 miles of
unbelievably built railroad. It’s an engineering marvel as far as railroad
construction, but because of that it is not conducive to industrial economic
development as far as bringing new industries and locating them along it
just because of its physical characteristics. It’s basically either
cuts and fills, some extremely long fills. So, that 28 miles, quite honestly, you have to be upfront, it’s not
a piece of railroad that’s going to be conducive to bringing freight rail to. CHUCK: Certainly local freight. I know that once you open a rail line you can never
say that there will never be any kind of freight on it. But certainly anything
from what you’re doing over here would basically be impossible. LARRY: It would be.
Again, you just have to be upfront and state it as it is: it doesn’t have
the physical characteristics that are conducive to locating industries. And if
you don’t have that you’re not going to get them. You know, even on sites
that we have if one little thing is wrong, they’re not interested. And you’ve got to
have everything pretty much in place. Physical characteristics of the Cut-Off are not going to lead to industries
locating on it. Just bluntly, there’s no land next to it
that you can use, basically, for rail service, freight rail service.
CHUCK: I have one final question for this segment, and we’ve touched on it in our
previous segment, and that has to do with the rail authorities. At some point,
the two rail authorities–the Lackawanna County Railroad Authority and the Monroe
County Railroad Authority–become joined as one. Presumably, that was to consolidate,
in a sense, give you a bigger critical mass? Or how would you
characterize that? LARRY: Well, the genesis of that…all along, both rail
authorities worked very closely together because, hey, we own the same rail
line. It was that vital and if we didn’t work together… CHUCK: And not just the main line. There’s
actually more railroad than just the section between Slateford
and Scranton here. There’s actually you have, what, the Carbondale… LARRY: Carbondale Line, and other branches here in Scranton. But the genesis of it
was regionalism. But much more importantly it was, quite honestly, put
to us that to pursue the passenger project you need to get
organized in Pennsylvania from the passenger’s project perspective. And what
I mean by that is in New Jersey you have one entity: it’s New Jersey Transit.
They are the passenger service provider in New Jersey, period. You know, it was looked
upon in Pennsylvania that, well, you have this authority, you have that, you have this; you need
to get some unity here. So we were highly encouraged
from a federal perspective and a state perspective to regionalize, so
there’s one voice speaking for the passenger project, not two or three or
whatever, and to bring it to the point where you’d have two partners in this
project, the passenger project. You’d have New Jersey Transit and you’d have this
entity in Pennsylvania–one entity in Pennsylvania–talking and working
together like you do in other services. The example that has been given, and
we’ve given and we’ve followed, is the Port Jervis service. If you look at the
passenger service between Hoboken and New York City and Port Jervis, it’s in
two states. It involves two states. It involves entities in two states.
So it is a pretty good model to follow for the service to Scranton. CHUCK: And it’s roughly
about the same distance. LARRY: It’s, I think, 93 miles, and
we’re about 133 miles, so we’re a little longer. But the concepts, the organization,
the working components are so similar. We don’t want to
reinvent the wheel here. We want to use and work off the successes
of other services. So this service is going to be very, very similar to that.
To get back, though, to the authorities that was the reason, that was the genesis
of putting the authorities together. And, actually, just to explain what happened,
because we do get asked: “How exactly did that work here?” Well, what happened was
the Lackawanna County Railroad Authority, its assets were joined in to the Monroe
County Rail Authority. So, it went away and its assets went into
the Monroe County Railroad Authority. So, what actually exists right now is the
Monroe County Railroad Authority. The reason it’s called Pennsylvania
Northeast Regional Railroad Authority is by means of just a minor name change the
name of the Monroe County Railroad Authority was changed to Pennsylvania
Northeast Regional Railroad Authority. So, you actually have the Monroe County
Railroad Authority as the entity, with a name change to Pennsylvania
Northeast Regional Railroad Authority and that’s how basically it was put together. CHUCK: Okay. LARRY: And again, the Monroe County
Railroad Authority was organized and came into being in 1982. CHUCK: So would the creation of, I’ll
say, a larger entity or maybe one which consolidates what was previously
there–two rail authorities–is sort of like the end point of this
particular section that we’re talking about in time, but I’m thinking that in
at least in parallel during this time–we’re talking about 1985 to 2001–while
New Jersey is in the long, drawn-out process of trying to acquire the Cut-Off
through the use of eminent domain and so forth–clearly what is happening
over here is far from static. So it gives, in a sense, you folks time to
start putting your ducks in a row, building up your railroad into something
that I think is not necessarily appreciated, because you’re not during
this time trying to build a passenger railroad. Clearly
you aren’t. We have Steamtown, which we haven’t really talked about,
which does occasionally run excursion service nowadays. Formerly, they
were a little bit more regular, but they have been here for quite some time as well. LARRY: Right. CHUCK: So, there is a certain visibility
from the passenger perspective… LARRY: Right. CHUCK: …that you may just want to comment on as well. LARRY: Yeah, well, and that’s a very good point. You put it in perspective, Chuck. It
is a case where, again, the constant question of “Why is it taking so much time?”
All these little steps were pieces of the puzzle to put together to get to the
point of getting the first money spent on the Cut-Off. The feds, the
states, everyone wanted to see all these little things put in place.
Things like the condemnation, things like putting the two authorities together,
things like all of these components that people wanted to see in place before
they started spending money on this project. They took time. The National
Park Service–of course, Steamtown–owns the the core complex and
the parts of the yard down here in Scranton. We own
trackage easements through the park. So we own certain tracks in the
park for freight service. Because, ironically, just to digress back a little
bit as a little point of history, another last piece that took
years to accomplish on our end was to buy Bridge 60, which we’re sitting right
outside of, which is the largest bridge structure in Pennsylvania from Scranton
toward the Water Gap in Pennsylvania. And Conrail was still
providing service over it right up to the end, to Chamberlain, General
Dynamics, and a plastics plant here in Scranton. They wanted to get out. The
bridge, Bridge 60, was in major need of repairs. They knew that; we knew that. It
was evident to all of us. It could have been a major factor in Conrail
wanting to get out, because they knew they were looking at one to three
million dollars in repairs just to make Bridge 60 refurbished. So, that negotiation
took some time with Conrail, too. But we negotiated a deal where we had
to pay Conrail for it. We purchased Bridge 60 and these tracks in the
Steamtown yard that we own. And the bigger tab was not to purchase, the bigger
tab was coming up with two and a half million dollars in grants that were
necessary to rehab and refurbish Bridge 60. And it wasn’t just track rehabbing, it
was major structural, substantive work to the structure of the bridge. We were fortunate and again working with
our partners to get the funding to do that and to bring it up to standards. And
we completely changed the trackage on it. We did a lot of
structural steel work on it. It was a major undertaking, but it made it safe
and efficient for the future. So that was another area that just, that
transaction alone–the purchase of this trackage and the rehabilitation of
Bridge 60–took about four to five years on our part. All pieces of the puzzle that had
to be done before you ever get into to thinking about passenger
service. And again, as you mentioned, the entire line to the Delaware Water Gap,
between Scranton and Delaware Water Gap, you couldn’t run on it. You literally couldn’t run on it. It was
out of service and it had to be rehabbed. That took years to bring back to that
case. It finally got to the point where our private rail
operators, our designated operators, they were able to get the funding to
bring it up to FRA Class 2 and Class 3, in some cases, speeds. So there
there are portions that are FRA Class 3, which allows freight operations at 40
miles an hour and passenger operations at 60.
We don’t usually run at those speeds. The freight can operate at 40 in sections.
And that just shows, though, the level that the line has been brought up to in terms of standards. As far as
Steamtown, the major focus at Steamtown wanted was the ability at some
point in the future to run excursions on our tracks. A long-standing dream, going back many
years when the Park Service first came on the scene, was to have the ability to
run excursions from the Steamtown National Historic Site to the Delaware Water Gap National Recreation Area historic site. As the line was brought up, for
freight basically–it was freight that paid the way, to be quite honest about it
and the flour mill was by far the biggest component of bringing it back up to
good standards– it came to be that we were able to
enter into an operating contract that allowed Steamtown to run on our tracks,
to run their excursions between Scranton and the Water Gap. And those are very
popular excursions. They happen at certain times sporadically throughout the
year. But Steamtown has also run excursions to many of the other
station sites: East Stroudsburg, Cresco, Tobyhanna, Gouldsboro, etc., Moscow. And you
know and we talked about historic preservation. Again, another area where
we’re in it to save the rail line, but we were very attuned to the
historic preservation aspects, everything along the rail line. The rail authority
entered into agreements with local historical societies along the way to
preserve the remaining stations, which were amazingly still there when we bought
the line. They were decrepit. Literally, there were birds living inside them;
the roof was caved in. it was amazing they were still standing,
but they were. They’re all old historic Lackawanna stations. We were very
fortunate to be able to work with local historical societies along the way, in
which we still own them but we lease them to them. And they’ve done their own
grassroots efforts in each community to get locally known. And if you’ve ridden the
line recently, or seen these stations, they’ve done a magnificent job in restoring
them, in most cases to original Lackawanna standards in terms of design, paint,
etc. So, it’s another aspect that we do take to heart and that is the tourism
industry, that is the recreation industry. We’re thrilled to work with groups like
Steamtown. Another group that has just come into fruition here in the last five years
or so has been the Erie Lackawanna Dining Car Society, a group of individuals who’ve
been very successful in going out and saving the last Phoebe Snow
cars that ran on these tracks for all those years, particularly the diners, the
last two Phoebe Snow diners now are here in Scranton. And one is pretty much
fully operational. I mean it’s out being used for dinner trains and dining car
service. And their hope is to really recreate a train of the 60s and
70s, and of the 50s, actually, of the Lackawanna using
these actual authentic cars that ran on this railroad during the Lackawanna years and the Erie Lackawanna years. That’s a major tourism recreational aspect and it’s
working out very well. Of course, we’re working with them and we have an
agreement with them to allow them to run for recreation and tourism reasons. CHUCK: One final thought would be that even
though freight, in a sense, pays the way– and that’s actually been the story for a
number of years in the industry–that freight has been profitable, whereas
passenger service, which basically led to the creation of Amtrak–for a
very long time has been viewed as something that loses money. But even
in the days where–let’s go back even to almost the beginning of the 20th
Century that railroads even then viewed passenger service almost like
a public relations type of tool that even if it was profitable–
maybe certainly never as profitable as freight was, and is–but it
played a different role. And maybe to some extent that’s the role it’s still
playing on this railroad. And that freight can be quite almost invisible.
whereas passenger, it actually brings families, kids,
people of all ages in direct contact with the railroad that they wouldn’t
typically have. And it maybe gives them a stronger, more personal, feel to the
railroad that they wouldn’t necessarily have any other way.
LARRY: Sure, if you look at the history of the railroad industry, I think, again,
one of the most amazing industries in the country because of its longevity. And
it’s still, basically, the same technology that started it: flanged wheel on a
steel rail, is basically still the technology that’s allowed the
movement of massive quantities of commodities at the most efficient prices,
basically. But going back over all the years, there were years that
passenger service was probably profitable, but it was still freight that
was paying the way. That’s what kept the tracks in place; that’s what kept them in
the shape that they were in, and everything else. Passenger service, before
the interstate highway system and everything else, was able to break even or make
money. You had the mail contracts, you had all kinds of other parcel services that were
carried by passenger trains. So it was a whole different world. With the
institution of the Interstate Highway System, with the institution–which most
people kind of gloss over–with the institution of the massive amounts of
federal, state, and local tax money that’s been put into our air system, our
airports. I mean I’ve nothing against that. Those are good uses of
funding. All of our transportation assets should be funded. Well, when people say,
“Why do we have a passenger train? None of them make money.” Well, without local
taxpayer money funding our airports, without local, state, and federal taxpayer
money funding our interstate highway system, you wouldn’t have airlines and
you wouldn’t have our Interstate Highway System. The point being, our
transportation assets are our arteries and veins of our entire economy. Without
all of them, not just one or two, you wouldn’t have the economy we have in
this country. So, unfortunately, this concept that passenger trains lose money and
why should we fund them is the same argument that exists with our
airports and with our Interstate Highway System. They don’t make money.
If the airlines didn’t have publicly funded airports and air
control systems and everything else that is paid for by federal, state, and local
taxpayer money, you wouldn’t have airlines. So it’s unfortunate, but that’s
one of the things that we’ve always struggled with in the industry in
getting the word out there: that all our forms of transportation, whether it’s
highway, air, water, or rail, as far as passenger service, are funded and
have to be funded by local, state, and federal taxpayer monies. But what you’re
getting for that, like I said, is the arteries and veins of our entire economy. And
if you don’t fund them properly, when your arteries and veins close up
it’s not a good thing. It’s very detrimental to our economy, and all of
those forms of transportation should be funded by local, state, and federal
taxpayer dollars because they’re so important to every person who lives in
this country. CHUCK: Here we are back at the Bridge 60 Tower
in Scranton, Pennsylvania, and we’ll be talking to Larry Malski, who’s president
of the Pennsylvania Northeast Regional Railroad Authority. And in this segment, we’re
talking about the time frame during which the planning and the rebuilding of
the Cut-Off will start. That’s from 2001 until the present time,
2017-2018. This is a key time because not only is there action taking
place in New Jersey but also in Pennsylvania.
Now once the line is acquired by the State of New Jersey that opens the door
to the seeking of funding for the replacement of track. Now this brings us
into the almost dreaded subject of studies. In other words, where there needs
to be documentation, data, whatever, planning type of information, that is
provided to the government to justify funding for a particular project, in this
case the rebuilding of the Cut-Off, at least in the initial stage, Phase 1, to
Andover. So, I’m going to turn it over to Larry, and my first question is maybe you
can talk to the whole discussion of studies. Because I know that I’m sure
that no-one really likes to hear about that and sometimes I know people have a
very disparaging view of them. But they’re not done just for the sake of
doing them. Clearly, there’s a real reason. Maybe you can speak to
why studies are necessary and what is accomplished by conducting them. LARRY: Sure, we’ll call this the dreaded studies segment. And, again, we’ve been
involved with them from day one and everyone wishes the system, the entire
system, the funding system could be much more efficient. But you know you have to
play with the deck of cards that you’re dealt, and we are dealing with the same
issues that Los Angeles, Atlanta, Chicago– you name the city who’s building light
rail or extending rail or extending heavy rail or whatever form of
transit that they’re adding to, building, or dealing with–and everyone has had to
deal on the same level. You could question and question the need
for some of the studies that have been done. But bottom line is at the end of
the day the studies have led directly to 69 million dollars in funding for the
first segment, and that segment, of course, is Port Morris to Andover. The studies have dealt with a lot of
issues that the feds and the states wanted answers to before they would
commit to funding. It’s as simple as that. And some of them are, quite honestly,
valid questions, like, how much does it cost? How many people are you going to
transport? You know, the myriad of, what’s the service going to look like? So, again,
I won’t be the first person to say that I wish it could have been it could
be a more efficient process. But it is what it is. I mean the good news is we’re
past the study phase; we’re into construction. This
project right now is viewed in Washington and in the states’
capitals as a project that’s underway. It’s not a question that it’s the drawing board.
It’s not theoretical. It’s funded. It’s under construction, and like most of
these projects around the country it’ll be done in phases. The feds or anyone
doesn’t just write you a check and say: “Here’s the check, go build it and tell us
what it’s done.” These projects are large, they require large sums of money and
they’re done in phases. And that’s not even just transit projects. Highway
projects and other projects, major transportation infrastructure projects,
are done on that basis in this country. And that’s the way it is basically. It would be
nice if it was faster and more efficient, but that’s the way it is
across the board. So we’re not the only one that had been plagued with
years and years of studies. Like I said, the good news is we’re past the study
phase and basically we are now seeking funding for construction–which
is underway on the first seven miles–and engineering, and you need both–you can’t
construct a project without having engineering in place. Obviously to
bid the project out, to have the proper specs, to meet federal and state
requirements, to meet all the other permitting, other issues you need to do
to build. And that’s the rules of the game. And that’s what’s out there if
you want to complete the project. So I guess in a nutshell you, if you
don’t have the studies, if you don’t have the engineering done, you’re not gonna
build a project. And that’s the nature of federal, state, and local funding for
transportation projects. Again, the good news is we’re underway. It’s an
established project with the FTA–the Federal Transit Administration–
which is the entity in Washington where the majority of the funding is coming
from. You have to live by their rules, their guidelines, their regulations, if you
you want the money to continue to flow. So that’s
basically where we’re at. Very specifically, the next major goal is once
the Andover section is completed is to address, really, the main link in
the chain, and that’s the 21 miles between Andover and the Water Gap, and I
should say the Delaware River. That will be basically the next major
phase of funding. We are now seeking, just like we did for the first seven miles,
construction monies and engineering monies to complete that segment and get
the 21 miles back. We believe and we’re very
optimistic, quite honestly, because there are some very important things happening,
not only just from a public perspective but from a political perspective, which
is very important in projects of this nature. And that is in Pennsylvania
we’ve got very, very good support from our Congressman Cartwright, who
represents Northeast Pennsylvania, is a true advocate of the project. He has
stated as such and has made it one of his priority top three projects that
he’s supporting and going after in his district. And he has been named to the
House Appropriations Committee in Washington, which is a very important
committee in terms of funding. As important, in New Jersey, the main
proponent and advocate of the first seven miles and the sixty nine million,
which is already been acquired for the first seven miles, is Congressman
Frelinghuysen, who also is on the House Appropriations Committee. But a little
more importantly, he has just been appointed the chairman of the House
Appropriations Committee. So you have the two congressmen in the House in
Washington who have made this project one of their priorities. They’re true
advocates of the project; that speaks for itself.
It’s a very important aligning of the stars, if you will, or however you want to
couch it. But a very important aspect of seeking funding and to advance the
project. Obviously there’s changes, other changes, in New Jersey with the
governorship of Governor Murphy and other positions that you know hopefully
will align with the concept of moving the funding for this next phase, the
21 miles, forward. On the broader scope from a political perspective, there is
serious talk in Washington of a major infrastructure funding bill next year
during 2018 that will address many of the infrastructure needs that are
desperately needed across this country in all modes of transportation. Again,
talking about the stars, hopefully, the timing of that could not
be much better because we haven’t had a major federal transportation
infrastructure focus and/or funding bill in many years. So that hopefully will
tie in with the support we now have in Pennsylvania. We also have support from
Senator Casey who’s, of course, from the Scranton area and has been an advocate
of the project all along . And again we could count on kind of a
bi-state support for a bi-state project. Because that’s what this is; this is a
bi-state project. And again it’s something we mentioned before that the
bi-state nature of this. Again, it’s a bi-state project. Usually that makes
it a little bit more complex to do one of these projects. But we certainly
have enough examples of bi-state rail, heavy rail, transportation operations in
our area. We’ve previously talked about the Port Jervis trains, the Hoboken to Port
Jervis trains. But out of the New York City area, metropolitan area, you’ve got all
kinds of bi-state relationships and agreements in place. For example,
the services up to Connecticut and the other surrounding states. So, we’re not
inventing the wheel here; we don’t want to reinvent the wheel; we know the wheel
is there. We’re basically designing this, from a funding perspective, to fit in
with what’s out there, what’s successful, what’s working in the commuter
operations in the New York Region, New York City region. So with that is a
little bit of a background of optimism going forward we feel pretty confidant. CHUCK: Here we are back at Bridge 60 Tower in
Scranton, Pennsylvania, continuing our discussion with the president of the
Pennsylvania Northeast Regional Railroad Authority, Larry Malski. And since in this segment we’re going to be talking about
the future, which is a really interesting subject having to do with the Cut-Off, the
Pennsylvania mainline here, and not only from Scranton but the east of here as
well going to the Water Gap. There are just so many things when we start
talking about the future, there’s a question of where do you actually begin?
But I think one of the things we want to talk about is that where we are right
now. And right now the Cut-Off, even though there have been some things that
have been impediments to its progress, New Jersey Transit has committed to a
deadline of the year 2020 for the restoration of rail service to Andover.
And I’ll turn over my first question to Larry, and that is that there are many
folks who probably never thought that that’s something like that would ever
happen, that, I know, there are many folks who really said that this rail line
is dead and we’ll never see anything again. And obviously that’s not
the case. LARRY: No, and you know with any project of this magnitude, especially a rail transportation project
of this magnitude, you’re always going to have naysayers. In some ways that’s good
because they do raise issues, raise questions that should be answered and
deserve an answer. And you know again, harkening back to some of the economic
development projects we had, like the flour mill where people said “You’ll
never get that built” and that type of thing. You persevere, you go forward, and
perseverance is the bottom line in these projects. But again to some of the people
who said that this Cut-Off will never be restored, I just kind of harken
back to point out the simple fact that there are so many people that said: “You
know, you’ll never lay a foot a rail west of Port Morris.” And, obviously, the first
seven miles is already under construction. And that’s the attitude you
have to take, you have to persevere to go forward. But there have been valid issues
raised by some some folks regarding what will the Cut-Off look like once
it’s fully restored, etc., etc. The Cut-Off restoration and the project to bring
passenger service back is just that: it is a passenger service project. A lot of
questions have been asked about freight service. Very simply,
it’s not a freight project, freight rail project.
Quite honestly, from an economics perspective it’s not really economically
feasible for it to become a freight rail corridor. The reasons are many. One is
obviously again it’s going to be a passenger service type
project. There are many engineering and physical issues that
will get involved in terms of looking at it as a freight project. Number one,
obviously you have all the electrified service from Dover in, and, you know, that
brings with it certain types of restrictions on the type of equipment
you can use in those corridors. Very specifically, double-stack type
container trains and things of that nature, high and
wide loads and things of that nature, would be prohibited and in most cases
restricted because of the clearances. So you wouldn’t be able to even run the
type of freight trains and equipment that are actually
growing in importance on most corridors, freight rail corridors, in this country.
The other concept and people have questioned: “Well, what about trash? What
about other commodities? What about other type of trains?” Again, my answer, based on
our experience in the real world, is that type of traffic is not going to run on
the Cut-Off either, for the simple reason if freight is going
to run from Northern New Jersey or the New York City metropolitan area to
Northeastern Pennsylvania it doesn’t need the Cut-Off to run on. It can run on
the parallel main lines which are in use as we speak.
In fact, our rail system here in Northeast Pennsylvania, our entire rail
line we have freight traffic that comes from the New York
City region and Northern New Jersey to our area currently, and it’s coming
across the major freight corridors that exist in Northern New Jersey. Namely, the
Norfolk Southern east/west main line from Northern New Jersey to Allentown.
In Allentown, it comes out of Allentown to the local which connects with us at the
Delaware-Lackawanna at Slateford- Portland. We actually have traffic moving
from Northern New Jersey on that route right now. So this
this concept that’s been put out there is basically just not correct: that
everyone’s waiting for the Cut-Off to go in so these
freight trains can start running. There’s no validity to that because, again, if
there was freight to move between Northern New Jersey and New York City and
our railroad in Northeast Pennsylvania, it would be moving. And, in fact, it is
moving. It’s moving on that route as we speak. There are various commodities
moving to our shippers, some of our shippers, on that route as we speak. And,
again, that route is owned by Norfolk Southern, which is the major carrier to
this region, major large carrier that brings freight to this region, and that’s
the route it would take. To run freight over the Cut-Off somebody
would have to run over New Jersey Transit and other trackage owned
by other parties. Economically that’s not feasible or viable because you would
have to be paid for that usage. And when you start doing the math that doesn’t
add up, especially in light of the simple fact that you’ve got a superb
freight corridor in Norfolk Southern between Northern New Jersey, New York
City and Northeast Pennsylvania. And, again, as I
stated we’ve already got freight moving in that corridor. And if there’s new
freight to move, it’ll move in that corridor, over that route, not the Cut-Off.
So just to address that, that’s one aspect that I wanted to bring up. CHUCK: So here we are in 2018 and looking into the future and it’s admittedly a crystal ball
exercise because there’s so many different scenarios that we might be
looking at. But if you were to give sort of a Cliff Notes version of how funding
for restoration of the remainder of the Cut-Off would be obtained–and we talked
about this a little bit in our previous segment–what would
be the most likely way if there is such a likely way that it would be obtained?
And I’m sure people who are watching this video would be interested in knowing
timeframes. And I don’t know that you can even provide that because
there’s probably, like any kind of crystal ball type of exercise, it’s
all guesswork, of course, by definition, but at least if you could give us some
sort of inkling as to what we’re looking at. And also emphasize the fact that I
think it’s also worth noting, at least in my opinion, this is not something
that’s easily done. No matter how you look at it, no matter how you define it,
there’s no guarantee here because of the fact that we’re in
territory that very few projects probably have really entered into.
Because putting an abandoned railroad back into service is not something
that happens every day. LARRY: That’s very well put, Chuck, and again
you’re right in terms of there have been and there are a lot of startup rail
services going on throughout this country, but most of them haven’t had to
face the obstacles of not having any rail or not owning the property that you
want to put the rail on. And again, as we discussed in previous segments, that’s
what’s taken up a lot of the time. But that is behind us. And,
unfortunately, that has eaten up a lot of years. That is behind us and what we
have now in front of us is a project that’s underway, and the first phase is
funded. So the key at this point is to concentrate on, as you mentioned, the 2020
would be to start-up a service for Andover. And so what we are
concentrating on is trying to make sure we have the funding in place for Andover
west, and very specifically having the funding in place for Andover to Water Gap. We are working again
with federal and state and local entities to put in place a funding plan
to address what we’re going to need on basically Day One after this service
starts in 2020 to Andover. I wish I could say the money would be waiting and
sitting there on that date. That’s what we’re shooting for. If we’re successful,
the day after the first train arrives in Andover construction will be
starting on the 21 miles. That’s what we are shooting for. To do that, again, we have
to have the federal, the state and the local funding in place. We’ve got to have a
bi-state funding agreement between the two states. Again, this would be the type
of document that exists for the Port Jervis service, for the service to
Connecticut, for the service to many of the other outlying two-state regions in
the New York metropolitan area that has this type of heavy rail commuter service,
and have, obviously, all the infrastructure in place to do so.
So, 2020 sounds a little far off, although it’s almost 2018. 2018 certainly is going to
be a critical year for this project because a lot of these things that we
talked about hopefully are going to come together, and lay the pattern and lay the timeframe
for this funding to hopefully be available in 2020 to continue the
construction to the Delaware River. CHUCK: So, in terms of funding, we’re looking at
the restoration of 21 miles of track which does not presently exist and then,
presumably, the upgrading of trackage from Slateford Junction to whatever
would be the end of the rail service at a given time. Let’s say, this is Phase 2,
we’re talking about the possibility of Water Gap or someplace west of there which I presume
is going to be dependent upon the amount of funding that’s available. Do
you have a preference at this point, or how in
terms of viability of the service, is there some scenario which you see
as most favorable–let’s say in the second phase, because I don’t know
that realistically we’re talking about going all the way Scranton in the next
phase; but there’ll be some intermediate spot–but what are the
possibilities that you see are most likely, if there are any that are “most
likely”? LARRY: It’s a very good question. You know,
the project will come to Scranton and everyone wants to know
exactly when and that type of thing. And that’s pretty much impossible to give a
specific answer to. Our key right now to everyone is if you don’t get the 21 miles back it’s not going any station anywhere. So, we are concentrating on getting the 21
miles back as Phase 2. And, obviously bringing the project into Pennsylvania.
But that really is the key. It’ll be done in phases, as most of these projects
are. If you look at most heavy rail new start projects throughout the country–
again, it’s not a question of where the federal government comes in, writes you a
check and says: “Here, do your project and come back and tell us when it’s done.”
They’re done in phases; that’s how they are done. So it’s not just us, and we’re
not being discriminated against. This is how if you go to any major city where this same type of project is being funded and constructed, they’re being done. Where
exactly those phases will go will be a total determination of how much funding
we get at each time. Obviously, we’d like to see the entire thing funded
immediately to Scranton. Whether that happens or not that’s a question to be
determined. But again, going back to that premise, as I tell everyone
no matter where they are, if we don’t get the 21 miles back it’s not going anywhere; it’s
not going in any station anywhere. So that is our key, that is our focus. We
need to get the funding for that. That rail is being laid on the exact
same Cut-Off that we’re talking about where the 21 miles are missing. So we need to get over that hurdle. And again, it’s gonna be a question, I do believe
2018 will be the crucial year in terms of coming up with the timeframe,
the timeline, and the funding scenario to get that completed. CHUCK: Let’s talk about a little bit about New Jersey Transit because they play, or would play, a
key role in the operation of the passenger service. Is it possible that we
could be looking at New Jersey Transit running all the way to Scranton, or is it
possible you could have like, as is in the scenario of the Port Jervis service,
where you have another entity that’s in, I’ll say, the outer state: Metro-North
in the case of Port Jervis. Is that something that’s a possibility? Once
again we’re talking crystal ball stuff, so I’m just
asking a question from the point of view of is that a possibility or is it getting ahead of ourselves? But at some point that’s something that
will have to be worked out. LARRY: Absolutely. That’s, again,
going to be one of the crucial elements of the bi-state funding agreement and
these other agreements that have to be put in place over the next
two years to meet the 2020 deadline of continuing the construction from
Andover. New Jersey Transit is a potential. We’ve had discussions
with them over the years. That’s going to have to be addressed that this service to
Port Jervis is a coordinated service between New Jersey Transit and
Metro-North. You know they use each other’s equipment and things of that
nature. There’s other instances, again, with some of the other lines
radiating out of the New York metropolitan area where, again, two states
use each other’s assets, equipment, things of that nature, the coordinated service.
So, again ,we’re not going to be reinventing the wheel. We’re going to be
looking at the way that’s done and basically trying to use those principles
here to address the exact nature of the operation. CHUCK: We talked about Scranton, but we can really go far into the future…here have been discussions,
and there was even at one point, as you know, a proposal to do a study to extend
even beyond Scranton to Binghamton, Syracuse, Buffalo. Those have been
mentioned, and that’s where Amtrak somehow comes into the discussion.
Where do you see them potentially? You know, we’re talking way down the road but
where could they possibly fit into this whole situation? LARRY: I see them
absolutely fitting in. We’ve had discussions with Amtrak over the years
about the potential interest in this route and they have expressed an
interest. They view this as a potential inland corridor between New York City and
Upstate New York and Northern New Jersey which doesn’t exist now. Obviously that
would bring Amtrak into a lot of new markets. It would contribute to their ridership
basis. It would give them new opportunities to reach a whole list of
communities and riders that have either a long distance to travel to take Amtrak
or just don’t even consider Amtrak because they’re too far away. So, again,
a potential to bring Amtrak service over this route all across Northern New
Jersey. It would open up all of Northern New Jersey and the residents of Northern New
Jersey and the communities of Northern New Jersey to Amtrak. You know, direct
service to anywhere on the Amtrak system in the country. So that would be a
benefit to all of Northern New Jersey, all of Northeastern Pennsylvania, and all
of upstate New York. And again, I’ll just go back to the premise I laid out before:
it all depends on that 21 miles. But once that 21 miles is in and the line is
connected, the Golden Spike is driven, and the entire Cut-Off is put back, there’s a
myriad of options that open up. As far as Amtrak, again, you’d have Amtrak service
across all Northern New Jersey, Northeast PA, you could have up to Binghamton, New York,
to Syracuse to join with the Water Level trains: the Empire service. Or it could go
west from Binghamton to Elmira, Corning, Buffalo. But that whole region is Upstate New York and especially the Southern
Tier Route for Elmira, Corning, and to Buffalo has no Amtrak service.
It’s not near Amtrak service. So it really would open up a lot of new markets for
Amtrak. And again, it’s strictly going to be a question of funding. That
would have to be a state-supported type rail project with Amtrak, which is
becoming more and more popular in states across the United States. States
are participating and are called state-supported Amtrak routes where the state
participates in the funding. Pennsylvania now has one: Pennsylvania supports the
service between Harrisburg and Pittsburgh; it’s a state-supported Amtrak
train. So the precedent is there for that. This would be a very interesting state-supported service because it would entail three states: it would entail New
Jersey, Pennsylvania, and New York. But again, it would open up markets to
sections of all of those states–New Jersey, Pennsylvania, and New York–that have
no rail service, no rail passenger service, no Amtrak service. So there’s
some real possibilities there. Totally dependent on funding. But as I keep
saying, totally dependent on the 21 miles of track that we’ve got to put back. CHUCK: Which
leads me, I’m gonna say, almost to my last question, which is that what we’re
talking about here in the future is in some shape or form similar to what has
existed in the past. It isn’t as if we’re proposing something that never existed.
Of course, Amtrak service didn’t exist; and commuter service to Northeastern
Pennsylvania never existed per se, although I understand there were people
who commuted–certainly I know there were commutation tickets that were sold
at Blairstown– I would not be surprised if there were
tickets that were sold to folks who would commute from, let’s say, East Stroudsburg,
for example. And I think that the question I have is, or maybe even it’s just a
comment that you might want to offer, is that the benefits of–we’ve talked so
much about all the details of putting this project together, putting the 21
miles back and such, but, I think, ultimately, in
my opinion, the impetus for doing this–is the benefit that’s going to be
derived by folks who live within the corridor which extends now, depending how
far you want to talk about, potentially even as far as Buffalo, for
example, which historically was where the Lackawanna actually went. It wouldn’t be by
that historic route per se but it would be the terminus of the
Lackawanna from Hoboken. But just looking it in terms of the benefits
that would be derived from putting the service back. And not only
to Northeastern Pennsylvania but as an extended project, if
you will, even beyond going deeper into the crystal ball, so to
speak. Now what would you say to the folks who have their doubts
about how there would be that positive aspect to the project?
What would people be able to say: “This is why I would like to support this.” LARRY: Again, you really do raise the
spectrum of what was there in the past. And what was there in the past was not
only commuter-type service; there was long-distance service; there was all of
that. That is becoming more and more important in our society, in our country.
Amtrak is setting records every year in terms of ridership. So, Amtrak’s
growing. More and more states, cities, communities are seeking Amtrak service.
Again, just a simple basic concept of being able to live in
Blairstown, New Jersey or Mount Pocono, or Binghamton or
wherever, and be able to get on a train and go to California or Florida
or Montreal, or you name a city. That’s what will be opened to our residents, all
of our residents of all of the entire Northeast. And you mentioned the Northeast Corridor, the Northeast Corridor is basically one of the most important
commercial, economic, financial, you-name-it, regions in the world. The territory
between Boston and Washington is kind of the heart and lungs of our country in many
ways in terms of many of the industries and things, financial markets, etc., that we
have. To be connected to that brings tremendous economic development and
potential to any and all routes. To not be connected is to be kind of left by
the wayside. So there’s all kinds of economic benefits that will flow both
ways, riding to and coming from that corridor with this service. It’s not just
commuters to work, although that is an extremely important part. The
key to this project is right now Interstate 80 is becoming a parking lot.
One thing that these dreaded studies have shown us and have
educated everyone on is the fact that the congestion factor and
the congestion of what’s called “failed status” in terms of moving traffic on
interstates is coming further and further west every year on Interstate 80.
That’s going to continue. It’s a parking lot now during rush hour. It’s going to
become just basically a bigger parking lot.
It will literally get to the point where you cannot use Interstate 80 to get to
your job or wherever you’re going during rush-hour times. And the rush hours are
actually getting longer. In our society, as work time becomes a little bit more
flexible, it’s shown that the rush hours instead of just being at one point
two hours, two and a half, three hours are now becoming four and five hours. So
it’s growing in both parameters, both of which are, again, making the only other
transportation asset you have, i.e. Interstate 80, unusable. That affects New Jersey; that
affects Pennsylvania; that affects anyone who uses that corridor. And that corridor
is an extremely important corridor to the health of the country. So this is not
going to totally cure it and cure it in a perfect way, but it’s going to take a
lot of the pressure off the congestion. It would offer an alternative; it’ll
offer an all-weather alternative, which anyone who has knowledge of
Interstate 80 during bad weather conditions, i.e. especially in the winter,
knows what that adds to the mix. And it just turns it into even a worse
situation in terms of congestion. So this will address something that’s there, that
we can use right now, that’s the most energy-efficient, that’s the most
environmentally-friendly means of mass people transportation, which is
passenger rail service. And when you consider the costs, and the cost of new
highway construction, which is not going to take place for environmental
and other reasons, you’re not going to have new highways built, and you’re not
even going to have the existing highways expanded. So this is one
alternative we have at our fingertips, at our grasp,
that is very important for everyone. And that pretty much has to come to
fruition. CHUCK: I’d like to think of not so much that the Cut-Off being in the Route 80 or
I-80 corridor as I-80 being in the Lackawanna Cut-Off corridor. We’ve gone literally through forty years of time in our discussions here, and four
episodes, and I certainly want to thank you for your time and your imparting
your knowledge and your experiences. Is there anything that you would like to
leave us with in your thoughts and in terms of you having been involved
with this project for so long, and intimately involved with it for so long,
that you would feel that would be important for our audience to hear
from you? LARRY: Well, I appreciate that opportunity. And again I
guess we’ll close with my favorite word, which is perseverance. I’d like to thank
all the people who have supported this project, who’ve gotten involved, who’ve written
letters, who called their elected representatives–I can’t stress how
important that is. Again, as we stated all along, it’s not
only rail, it’s highway, it’s air, it’s all other forms of land transportation
are basically subsidized by the federal, state, and local governments. It’s vital to
have all of our supporters and everyone, the general public, who has any thoughts
of better transportation options to get in touch with your elected
representatives at every level: the local level, the state level, and the federal
level, and express to them how important this project is, not only to you but
to the entire region, and to the country. And to support the funding of
this project and other projects like this. But to stick with it, to
persevere. Like I said, our whole project in the last 36 years here of rail
development on our system has been a perfect example of perseverance. And
that’s what you need. You have to go for the long run. It’s not a short
haul, it’s a long haul in getting these projects done. And like I said to all
those naysayers who said you know we’d never lay a stick of rail west of Port
Morris: just keep tuned and keep watching because it’s happening, and it will
happen. It will happen all the way. It has to happen
for the good of New Jersey, Pennsylvania, and the entire region. CHUCK: Well, I certainly thank you for your time. We behind the camera have enjoyed this. I hope you’ve enjoyed your time as well because we’ve explored quite a few
things and I hope that the information that you have imparted will
be understood by the people who watch the videos, because I think there’s some
subjects that we’ve covered here that I don’t think are common
knowledge and I think that may help folks to understand that
this project is going forward. It has had its fits and starts. There’s
no doubt about it. And it’s understandable why some people may
have doubts. But by the same token, as I said before,
this is the type of project you don’t see happen every day. It’s a
it’s a very, very challenging project. But I think the fact that
you play a key role in this is very reassuring, and I certainly
congratulate you for your perseverance. You use the word perseverance, and to
have been involved with a project like this for so long, that’s the
definition of perseverance, I’d say. And you haven’t given up. And I hope
that folks those people who would support this project don’t give up.
It’s sometimes I wouldn’t say easy, but it’s sometimes it’s understandable
you can become discouraged when things don’t happen quickly. Because we like to
think that things always happen quickly. And sometimes, especially the big things,
don’t necessarily come quickly and easily.
And this is, I think, certainly a very good example of a project that
requires perseverance. And I want to certainly thank you for your being
being a part of this project. LARRY: Well, again, I thank you for this. I thank
you for this opportunity. I thank you for doing this whole series on the Lackawanna
Cut-Off. I’ts something that hasn’t been done and should be done, is
being done by you and your daughter in a very professional means, which is
very important from a historic but also from a current aspect. And, again, thank
you for you and your association and the supporters that you have. But you hit the
nail on the head. I guess the best way to end is by saying–we don’t want to beat a dead
horse but would use it one more time– that the only way this project is not
going to be successful is if people like us and our supporters, and all the
supporters and all the elected representatives are gonna be involved, if
they don’t persevere. And if they don’t, it won’t get
completed. But if they do, it will get completed. There’s no doubt about it and
it has to. CHUCK: Well, as Winston Churchill used to say: “Never give up,
never, never give up.” LARRY: Yes. That’s the way to put it. That’s our motto. CHUCK: Well, thank you. Thank you very much. Thank you, Larry, and thank you to all the folks
watching our video and certainly look forward to our next video on the Lackawanna Cut-Off.

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