Off the Rails: Railcar Storage Controversy Update

The Iowa Pacific Railroad appears to be running off the rails in the Adirondack Park.

Iowa Pacific leases tracks between Corinth and North Creek from Warren County to operate a scenic passenger service. It also owns another 30 miles of tracks between North Creek and Tahawus, known as the Sanford Lake line. It’s on those tracks where Iowa Pacific controversially started storing idled oil-tanker cars for a fee in 2017.

Ed Ellis, the railroad’s president, recently told Warren County that Iowa Pacific would be discontinuing the scenic passenger service because it is losing money. That puts Iowa Pacific in breach of its lease with the County.

At the same time, Mr. Ellis also demanded that Warren County buy, for $5 million, the Sanford Lake line. Given that most of the Sanford Lake line lies outside Warren County, in Essex, along the pristine Boreas and Opalescent Rivers, it’s an odd demand.

His tank bank on the Sanford Lake line is foundering. It was started with an initial deposit of oil-tanker cars owned by a company controlled by billionaire investor and philanthropist Warren Buffett, but they’ve been withdrawn in response to pressure from Governor Cuomo and environmental groups.

Mr. Ellis earlier said that he had 60 other customers who could deposit 2,000 oil-tanker cars into indefinite storage on the Sanford Lake line. But he admitted to Warren County that they’d been scared off by the controversy.

It now seems that the Iowa Pacific Railroad is chugging toward Washington, D.C., next stop the Surface Transportation Board, which adjudicates railroad disputes. The railroad, the State, Warren County and various Adirondack Park advocacy groups all have high-powered lawyers on board.

But first, more bad news for the Iowa Pacific:  the IRS has dropped tax liens totaling $1.3 million across the tracks in front of the train. And Essex, Warren and Saratoga Counties have their own liens for unpaid property taxes totaling more than $100,000. Seems the Iowa Pacific Railroad is running out of steam.

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