EAST LIVERPOOL - The Columbiana County Port Authority decided to take advantage of the natural gas boom under way in the region by leasing the mineral rights on 303 acres for $757,000.
The Port Authority board agreed at Monday's meeting to enter into a lease with DPS-Penn, a land company obtaining such leases on behalf of Chesapeake Energy, one of the nation's leading natural gas drilling companies
The 303 acres consists of the 36-mile former Youngstown & Southern Railway, which begins in Boardman, runs south through Columbiana, Rogers and Negley before terminating near Darlington in Beaver County, Pa.
Chesapeake will pay a lease fee of $2,500 an acre, plus 17 percent royalties. Most of the lease payment will be used to help pay off some of the Port Authority's debt, according to CEO Tracy Drake.
More than $3 million of the debt is from the railroad alone, which was purchased by the Port Authority more than 10 years but has never really taken off as anticipated. Drake told the board he is still in negotiations with a company interested in acquiring the railroad and those talks also include the Ohio Rail Development Commission, which loaned the Port Authority money to acquire and rehabilitate the railway.
The Port Authority's failure to repay the state loan will be cited in the recently completely state audit of their books, Drake said, adding that the ORDC has been willing to work with them on repayment of the loan.
This is the latest effort by the Port Authority to eliminate some of its debt. At its August meeting, the board sold 10 acres to a mineral company already leasing the land at the Port Authority's river terminal in Wellsville and turned over complete management of its fiber optic network to an information technologies company operating out of the Port Authority's industrial park in Leetonia. The transactions raised $3 million in revenue and will be used to pay off loans for those projects.
Some of the costly projects undertaken by the Port Authority have failed to earn enough of a return to pay off the loans, resulting in the board obtaining a line of credit from local banks, which currently totals $1.8 million. The board acted at yesterday's meeting to extend the line of credit with one of the banks by four months.
The board's next meeting is 5 p.m. Oct. 24.