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Sale falls through

August 13, 2012
By TOM GIAMBRONI - Staff Writer ( , Morning Journal News

EAST LIVERPOOL - The proposed sale of the Columbiana County Port Authority's railroad has been called off after the prospective buyer raised last-minute concerns about alleged environmental problems with a portion of the property.

The port authority board had been scheduled to meet last week to approve the sale agreement, but the meeting was canceled after Tervita, LLC, advised officials the company was exercising its option to cancel the deal.

Port authority CEO Tracy Drake was on vacation but sent an email explaining that Tervita "had the right to walk away if they found (an) environmental issue. They have invoked this."

Drake said they are unaware of the alleged environmental obstacle and have asked Tervita to provide further details. He said the port authority must also determine the status of the $150,000 security deposit from Tervita.

Tim Brookes, the port authority's attorney, was contacted prior to Drake, and he said Tervita is alleging a storage tank at the railroad's repair shop near Negley had leaked diesel fuel onto the ground.

"That's what we're being told is the reason, but it was never raised previously," he said.

Drake spoke with the railroad operator, who questioned whether the alleged contamination had occurred. "Tervita's walk-away caught us by surprise because no obstacles to closing were claimed when they sought (an) extension," he wrote.

Drake was referring to the July 16 port authority meeting, when the board agreed to push the closing date back three weeks to give Tervita more time to complete the paperwork and present the deal for approval to its board of directors.

Tervita is the fourth company to either purchase or agree to purchase the railroad since it was acquired by the port authority in 2000. The first operator filed for bankruptcy, while the second buyer pulled out in 2006 before the deal was completed.

This was followed by a lease/purchase agreement with Eastern States Railroad to transport demolition and construction debris to the Total Waste Logistics landfill in Negley. This deal also fell through, although Eastern States continued to operate the railroad.

The port authority approved a letter of intent in April to sell the former Youngstown & Southern Railroad to Tervita for $2.9 million, $1.7 million which was to be used to pay off outstanding loans to the state and local banks that were obtained to fund rehabilitation of the 36-mile railway.

Brookes noted if the property is polluted, as alleged, the port authority has proven adept at obtaining state grant money to clean up contaminated industrial sites so they can be redeveloped.



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