Yesterday, I blogged about the Catskill Mountain Railroad dispute. This is an email that I sent to Senator James Seward:
Dear Senator Seward:
There has been an ongoing dispute between County Executive Mike Hein and the Catskill Mountain Railroad, which leases a railroad right of way that Ulster County bought about thirty years ago. I have blogged about the dispute at http://www.mitchell-langbert.blogspot.com/2015/06/an-open-bidding-process-is-needed-to.html . The best way out of the conflict is to introduce open bidding so that the party that can most efficiently use the right of way can acquire it through privatization at optimal gain to the county. That can be accompanied with a tax credit to businesses local to the track, which have been hurt for a century by the Ashokan Reservoir and New York City’s predatory policies.
The possible bidders are New York City, the existing railroad, and the
railroad’s competitors, one of which has told me that it wishes to acquire the
track. The city has already offered a grant to fund removal of the track and
replacement with a trail, but it is far from clear that the $2.5 million offer
contemplates losses due to the ensuing depression in tourism. In 2014, the
existing railroad’s first good year, about 40,000 visitors came to the
railroad. This meant a million dollars in revenue. At three percent interest,
the present value of lost [railroad] revenue of one million dollars per year into
infinity is $33 million, but costs need to be subtracted. [In the email I omitted to mention that there may be as much as a $1 million annual loss-- an additional $33 million present value--to local diners, stores, and restaurants; that would reflect $25 in spending per visitor. The present value of the total loss may be closer to $20 million.] A more complex
estimate would need to determine what the value added to the county is; value
added includes local wages and purchases of supplies from local businesses. A
$10 million price is probably closer to the value that the city should pay to
remove the track. The city has long exploited Ulster County through one-sided,
manipulative deals, as David Soll’s Empire of Water makes clear.
The conflict has reached the point at which a Republican insurgent
candidate, Terry Bernardo, has stepped forward. The solution set of both sides
has heretofore been limited to two artificial poles: (1) the city and the
Catskill Mountainkeeper’s proposal for a trail, which makes artificial
projections about the extent of potential use and is indifferent to the effects
on small businesses, and (2) the existing Catskill Mountain Railroad’s proposal
to extend the existing arrangement, possibly through a rail plus trail. The
Catskill Mountain Railroad has failed to live up to its 25-year agreement to
rebuild the track and has refused to make its financial statements public. Its
business plan does not contemplate its ability to raise the appropriate level of
financing. To be competitive, the city’s bid would need to add say $10 million
to the bid that the CMRR or other railroads make to compensate the region for
the loss of tourism. That amount of money could be used, if the city’s bid is
successful, to fund tax credits that will enable existing businesses to expand
and develop alternative tourist attractions.
Although this issue is not in your direct domain, Senator Seward, I would
like to suggest that you offer to procure expertise at the state level to help
the county structure public hearings and a public bidding process that will
enable the diverse interests to make competitive bids for the property so that
it can be privatized and used for the best benefit of the people of Ulster
County. The competition between secretive lobbyists at the DEP and the
Mountainkeepers versus the secretive lobbyists at the CMRR is no way to resolve
a public debate. I am copying the Ulster County Legislature with respect to
this idea.
Thanks,
Mitchell Langbert
