Area residents may not be hearing the sound of trains roaring by in the near future.
Last week, a group containing the Town of Drumheller, and Starland and Wheatland Counties teleconferenced with CN Rail to discuss a possible deal to buy the rails in the area.
The price CN was asking was $12 million. The price may be high according to town and county officials. The price does not include the land the rail is on.
“$12 million is the price of the rail, which doesn’t include the land. If we wanted the land, we’d have to lease it in an open ended lease. They are talking to another possible customer, so if we leased the land they could come back and take it back,” said Drumheller Mayor Terry Yemen.
“Right from the beginning we were interested in the land. If we can get the rail line for a decent price, we’d look at that too,” said Wheatland Reeve Glenn Koester.
“CN had given us a purchase price of $12 million. Obviously we’re not going to drop $12 million, but when we first got into this, we thought we could issue tax receipts,” said Starland County CAO Ross Rawlusyk.
The counties and town were hoping the purchase could be offset through tax incentives. However, it seems that avenue is closed.
“We wanted to use tax receipts to pay them with and CN thought that was doable. Then there have been some precedent setting cases and it didn’t work out. The tax receipts are off the table. Drumheller had only offered tax receipts for our share of the rail,” said Yemen.
“As a group of municipalities, that’s something we have to discuss with our federal representatives. If we could come to an agreement with CN using tax receipts, it would be way more advantageous for us,” said Rawlusyk.
The rails have remained silent in the area for years. The counties and town hoped to purchase or lease the rail and land to use as a short line.
CN contacted the group in May and offered the rail for $12 million.
The price, officials indicate, may be too steep without tax receipts on the table. Officials are hoping a leasing option may be possible.
“We’ve talked about leasing the line and we’ve asked CN what the price would be,” said Rawlusyk. “But, it sounds like, no matter which way we go, CN wants to retain the right of way.”
The buying group will be meeting later this month to discuss the deal further, but for some, the price and conditions are not favourable.
“If we can’t have land, what good is an asset if you don’t own the land. It’s pretty hard to make a commitment and tie up dollars if you don’t know what the future holds,” said Koester.
“The land was never up for sale,” said Yemen. “With those conditions, it’s not a good offer.”
