Rail company cooperates with Ontonagon County over abandonment

With support from Escanaba and Lake Superior Railroad, officials in Ontonagon, Mich., are moving forward with the Western Upper Peninsula Planning and Development Region working to preserve the railroad located in Ontonagon, the Daily Mining Gazette reports.

Kevin Manninen, WUPPDR
regional economic coordinator, Scott Frazer, village of Ontonagon manager and
Paul Arsenault, a private consultant for E&LS, met to discuss the economic
opportunities in Ontonagon County, including the railroad. In the meeting,
arranged by Gov. Jennifer Granholm’s regional director, Ann Jousma Miller, and
Amy Berglund from Sen. Carl Levin’s office, the group discussed the benefit of
the railroad in the local community, how it is used and when it is expected to be
removed. Arsenault said a decision on rail removal would not happen until early
spring 2011, allowing time to study options related to the existing rail.

"We are very
appreciative that E&LS is a willing partner and is supportive of the effort
to find economic solutions for the area," Frazer said. "We want to
see if we have time to perform a study."

Manninen said the next step
is to brainstorm ways to support the rail and put the rail into commission.
Manninen’s main role will be to coordinate and keep communication flowing, as
well as explore possibilities for business expansion and development in
Ontonagon and the surrounding areas.

The E&LS Railroad is a
privately-owned shortline railroad company operating in northeastern Wisconsin
and the Upper Peninsula of Michigan, it is headquartered in Wells, Mich. Under
current ownership, the E&LS has expanded from the original core line of 65
miles that was purchased in 1978, to more than 235 miles of operating railroad
in 2005. Last year, E&LS Railroad announced they would be abandoning approximately
43 miles of rail line in Ontonagon County as well as southern Houghton County.

Since its birth in
Ontonagon, the railroad has played a pivotal role in Ontonagon’s industry,
serving Smurfit-Stone Container Corporation before the company closed its doors
in December 2009.

Frazer said the best way
for the rail to exist is to have the activity of buying and selling, especially
on a large scale.

"It’s all about trying
to see what can be created or discovered as far as opportunities for commerce
that would help the rail line," he said.

E&LS began operating
the line in 1980 and its operations supported the paper mill in Ontonagon. The
mill originated as many as 5,380 annual carloads of corrugated paper – accounting
for more than 84 percent of the line’s traffic in 2005, according to the
abandonment exemption from the Surface Transportation Board, a federal agency.

In the abandonment
exemption, the Surface Transportation Board declared the E&LS "is
permitted to terminate service over, and to eliminate, a 43-mile rail line
between Ontonagon and Sidnaw. (E&LS) has consented to negotiate with a
state agency to enter into an agreement to preserve the land under the line for
future rail use." The line runs from milepost 408.02 at Ontonagon to
milepost 365.09 at Sidnaw.

The village has been
working to keep the rail line because of the significance the railway has in
the community as a viable source of transportation in an industrial setting. Keeping
the railway in Ontonagon may help secure future use at the paper mill, so all
efforts will be made to keep the railway in Ontonagon as the only traffic that
now originates on the line is 200 to 250 carloads annually of pulpwood
harvested by five shippers in forests south of Ontonagon and trucked to sidings
along the line for transfer to rail cars.

The Ontonagon County
Partnership will be meeting Nov. 3 and the plan is to further discuss the
railroad. Future discussions will include input from the Ontonagon County
Economic Partnership, Ontonagon County officials and representatives of the
Ontonagon County Economic Development Corporation and the Michigan Economic
Development Corporation.