.RTC on Verge of Approving Next Freight Operator

[Editor’s note: This is part 2 of a series on issues surrounding the rail corridor. Part 3 runs on May 9. Read part 1 here.]

“I’m not saying you guys are scoundrels,” clarifies Scotts Valley City Councilmember Randy Johnson during a tense back-and-forth at a recent Santa Cruz County Regional Transportation Commission (RTC) meeting.

For several minutes, Johnson, a member of the RTC, has been pressing the leaders of the freight company Progressive Rail about their intentions for rail car storage on Santa Cruz County’s rail line. Andy Schiffrin, an alternate for Commissioner Ryan Coonerty, did the same just before him.

Things are touchy because Iowa Pacific, the financially strained current operator of the rail line, has made a habit of parking cars on the line indefinitely. Both men want to make sure that the blight doesn’t continue under the next partner.

“I can appreciate what you’ve gone through, and it’s not the way we do business,” Progressive Chair Craig McKenzie assures Johnson at the April 19 Scotts Valley meeting.

McKenzie is visiting from Minnesota, along with fellow Progressive Rail officials, as they negotiate through what they hope will be the final stages of a contract to become the new freight operator for the local line, which has become a lightning rod. Some activists say the county could and should rip up the tracks to pave a wider bike and pedestrian path than the one the RTC already has planned. McKenzie says Progressive has shown a lot of flexibility because it wants to come to Santa Cruz County even foregoing guarantees that the company has pushed for in contracts elsewhere.

“We’re not Iowa Pacific,” McKenzie adds. “The commission’s doing a fantastic job, looking after our references and investigating us. We’ve never had any unpaid bills.”

Progressive President Dave Fellon promises their company will be an economic engine for the county. McKenzie knows some audience members have heard rail opponents share negative stories about Progressive’s neighbors in other towns, but says those are “very selective, very one-sided.”

Still, Johnson worries about the clout that the rail industry carries. “What we know is that once we hand over the keys to Progressive Rail, this commission loses a lot of authority and control,” Johnson says.

George Dondero, the RTC’s executive director, says there’s a sense of urgency for the commission to pick a new rail operator, lest it run afoul of federal law.

After a contract gets signed, the rail line would need repairs before opening up north of Watsonville because of storm damage, and the RTC recently approved $500,000 for inspections and recommendations of work for bridges and other infrastructure.

Progressive Rail’s plan for Santa Cruz County is divided into a few phases. The first would be freight service, followed by an occasional excursion train to Davenport, which would ultimately be followed by passenger service. Passenger service would hypothetically be a new venture for Progressive, but Dondero says the RTC could instead jointly run passenger service itself, perhaps via a partnership with METRO.

Josh Stevens, a 21-year-old Santa Cruz resident, thinks a commuter train would be a great fit for Santa Cruz County one day. After the meeting, he says that until a commuter train does come, freight by railroad would take a few trucks off the road. He likes them both for their carbon-reducing benefits and for safety reasons. “If we’re able to alleviate that in any way, shape or form, we should,” says Stevens, who’s wearing two layers of black jackets over a black T-shirt from the show Rick and Morty.

Gail McNulty is the executive director for Greenway, which supports tearing up the tracks for a wider trail, and she worries that Progressive Rail has ulterior motives, given McKenzie’s previous ties to the oil industry. She believes that Progressive, if approved, could end up drilling offshore in the Monterey Bay—even penning a post on Greenway’s website titled “Tell the RTC to Protect Our Coast!”

If that sounds like fear-mongering, that’s because it almost certainly is.

The Santa Cruz Sentinel reported last year that drilling, if it ever got approved, in the Monterey Bay would be extremely difficult to do, technically speaking. Dan Haifley, executive director of the O’Neill Sea Odyssey, says that the more recently added southern portion of the National Marine Sanctuary—which is farther offshore—is being reviewed, along with other marine sanctuaries, per an order from President Donald Trump. But it’s nowhere near Santa Cruz. It would take an act of Congress for the rest of the bay to get approved for drilling.

“The chances of that being lifted are as likely as them drilling in Yellowstone,” Haifley says.

McNulty has implied the Coast Dairies National Monument could open for drilling, too. But Ben Blom, field manager for the Bureau of Land Management’s Central Coast field office, calls that scenario “highly unlikely”—given that the federal government doesn’t own the mineral rights.

McNulty admits that Greenway’s talk of drilling is “all hypothetical,” and without any proof, but she feels “desperate times call for desperate measures.” And she knows the talk of drilling sounds like fear-mongering, but also insists that she is legitimately scared by Progressive.

Greenway hired an environmental law firm out of San Francisco to write a letter to the RTC arguing that approving the new rail contract without a thorough review would violate the California Environmental Quality Act (CEQA).

County Counsel Brooke Miller says that CEQA could, in theory, require such a review in order to establish new freight service—but not when the RTC is simply picking a new operator. “This letter makes a lot of blanket statements about how CEQA might apply, and it’s not really specific to what we’re doing,” says Miller, who’s writing a response. “We have a different set of facts here.”

Some of the complex legal and environmental questions could soon have more answers, once the RTC staff releases the contract, which it will do before the commission votes. McNulty says her board actually told her not to work anymore on investigating Progressive, because they want her working on Greenway.

But McNulty did recommend we talk with residents of cities in which Progressive currently operates, like Pam Steinhagen, who runs a daycare next to the railroad tracks in Lakeville, Minnesota, Progressive’s hometown.

Steinhagen says Progressive has repeatedly ignored her complaints over the years—about lewd graffiti tagged on their rail cars, about cars behind her business, about the company’s propensity for starting trains without warning when school gets out, even though young kids sometimes walk under the cars.

“There’s really nothing we can do,” she says, “other than talking to our congressmen.”