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St. Lawrence County IDA moves ahead on Newton Falls rail line

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The St. Lawrence County Industrial Development Agency has settled a lawsuit with the operator of the Newton Falls rail line, setting the stage to improve the tracks that span three counties with the use of a $9.9 million state grant and making the reopening of Newton Falls Fine Paper more likely.

“We’ve agreed to settle our differences and work together,” IDA Chief Executive Officer Patrick J. Kelly said. “Within the Adirondacks, having this rail line working provides numerous economic and environmental benefits.”

Economic development leaders in St. Lawrence, Jefferson and Lewis Counties met last year on a strategy to rebuild the 44-mile line.

Rebuilding the line was one of the priority projects chosen by the North Country Regional Economic Development Council.

“We’ve been told the rail line is an absolute necessity for the reopening of the paper mill, which is an important part of our community,” said Mark C. Hall, supervisor of the town of Fine and a member of the IDA.

Having the rail operational also opens up possibilities for Benson Mines, which has millions of tons of granite remaining from iron production near Newton Falls. Mr. Hall said the railroad would also benefit the former Jones & Laughlin Steel Co. site. The 54-acre property, one of only a few zoned industrial in the Adirondack Park, is contaminated but efforts are underway to make a portion of it usable.

“Having end users to utilize the line is the goal for all of us,” Mr. Kelly said. “We are providing the opportunity for the line to be used and support itself.”

In Jefferson County, Slack Chemical and Climax Paperboard use the line for shipments and deliveries. In Lewis County, Harrisville Dry Kiln may use the line. Functional tracks could also attract a buyer for a talc mine owned by IMI Fabi north of Natural Bridge.

Work on the lines could start soon.

“We’re starting the process right now,” Mr. Kelly said. “This is a regional priority and I think a priority in the state.”

One of the obstacles that stood in the way of reopening the line was a lawsuit filed by Mohawk, Adirondack and Northern Railroad Corp., the operator that had sought ownership of the tracks.

Mohawk, Adirondack & Northern planned to abandon the line from Carthage to Newton Falls in 2005 when the Black River-St. Lawrence Resource Conservation & Development Council proposed to turn it into a multiuse trail and some had feared the company wanted control so it could rip up the tracks for salvage.

The IDA had argued that it had title, which was transferred in 1991 as part of a payment-in-lieu-of-tax agreement. A lease gave Mohawk, Adirondack and Northern an option to reacquire the line for $10 at any time up to six months after the agreement ended.

The IDA’s position was that the lease had long since expired and that it had taken over maintenance on the line.

With that discord set aside, the IDA is working out an agreement under which it would have title while a lease of 15 years with Mohawk, Adirondack and Northern was in effect. At the conclusion, the operator would take title to the line.

Triggers within the lease could also lessen the term.

A proposed PILOT, which would have to be approved by affected taxing jurisdictions in the three counties, would also last the length of the lease. Payments would depend on a formula determined by rail volume and types of traffic.

The IDA is trying to build in a schedule for a line that historically has been challenged by low-volume loads against a time when traffic might improve, Mr. Kelly said. “Our goal was to preserve this as an asset for economic development,” he said.

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