Category Archives: News

Stakeholders steamed passenger train service between Sault Ste. Marie, Hearst to cease

From the Sault Star:

Photograph:  August 21, 2009   Ren Farley
Photograph: August 21, 2009 Ren Farley

SAULT STE. MARIE, ONTARIO – Al Errington is simply steamed that passenger train service between Sault Ste. Marie and Hearst will cease July 15.

“We need somebody with the financial resources and the personnel resources to operate that passenger train well,” said a “very aggravated” Errington, Coalition for Algoma Passenger Trains (CAPT) co-chair and owner of Wilderness Island Resort, responding to CN Rail’s announcement that the termination stemmed from the inability of the train’s current operator, Railmark Canada Ltd., to obtain financing.

Errington has been a vocal critic of the Michigan-based outfit, questioning everything from past practices to staffing levels, pointing to a lack of engineers or crew numbers certified to run the train, forcing operations to stop after the maximum 12-hour, working-day limit is reached.

“Railmark has been a disappointment since they started operating,” he said.

CN officially discontinued its operation of the passenger train on May 1.

Things appeared more on track in April, when Transport Canada announced that Railmark had received its certificate of approval to operate on new legislation, only days after Transport Canada Minister Lisa Raitt announced that the government would provide $5.3 million over three years for the continued operation of the passenger rail service. The money was to be filtered through the City of Sault Ste. Marie with logistical agreements made between the city, Railmark and the government.

CN continued operations for the following few weeks as the transition unfolded.

The subsequent ride has been far from smooth. In late June, city council, on the recommendation of the Sault Ste. Marie Economic Development Corp., opted not to sign a contribution agreement with Railmark because the company was unable to secure a line of credit equivalent to three months of operating expenses, as required in a pre-condition. Railmark said the average monthly billing for federal subsidy is about $183,000 per month and, based on that, it was determined a line of credit of about $550,000 would be required.

Errington said the city was correct in its decision.

“There should be no risk to Sault Ste. Marie,” he added. “If there is risk, there is something wrong about the deal.”

Railmark president Allen Brown told The Sault Star then he was determined to continue to operate the passenger service and work toward meeting pre-conditions.

When reached by the Star Friday afternoon, Brown didn’t say much.

“I don’t really have any comment until after Monday night,” he said, referring to the update city council is slated to receive on the matter — this was planned prior to this latest development — during the regular council meeting.

Linda Savory-Gordon, a CAPT co-chair, said she expects EDC CEO and stakeholder spokesperson Tom Dodds to ask council for its support in efforts to lobby the federal government and CN. Dodds could not be reached for comment Friday.

A working group steering committee, formed more than a year ago to save the train service, was to have met last Monday to determine how to get the complete service running again.

Many saw more red flags when it was reported last week the ACR passenger train had not been running on the southern portion of the route, between Sault Ste. Marie and Hawk Junction, since June 25.

The newly christened Algoma Spirit Passenger Train continued regular service between Hawk Junction and Hearst with Brown explaining the move was to keep the operation flowing more quickly in the face of “go-slow” orders. The order, which allows trains to only travel on part of the line at 10 miles per hour instead of 30 miles per hour, was due to train conditions and the heat of the track.

“That was just shocking,” said Savory-Gordon.

Transport Canada “made it very clear,” she said, that funding was for service between the Sault and Hearst.

“That doesn’t mean you can decide to do just half of it.”

Errington branded the service disruption “a message that there were management problems.”

Savory Gordon said it’s Transport Canada’s job now to “apply pressure” on CN to run the train until another operator is chosen.

“(CN) says they are no longer running it and they don’t have to,” she said, adding CN’s reluctance to operate the line was “more understandable” when, in 2014, Ottawa chopped a $2.2-million annual subsidy.

“But now the funding is there, so there’s really no justification for it,” Savory-Gordon said.

“I don’t see, even if there’s some legal hitch, how they can morally refuse to allow that to happen on their line.”

CN has confirmed it, the ACR Passenger Service Stakeholders Working Group and Transport Canada, have been in “regular discussions” and continue to explore short- and long-term solutions.

However, the company has been steadfast in the past it is not in the passenger rail business and no longer wants to operate the service between Sault Ste. Marie and Hearst.

This stand appears not to have changed.

“We will continue to work with the stakeholder groups and with Transport Canada to find a long-term solution,” Mark Hallman, CN’s director of communications and public affairs, told The Sault Star Friday when asked if CN would take over running the route. It will continue to operate the Agawa Canyon Tour Train daily for the season ending Oct. 12.

Errington said he does have “sympathy for (CN) in that regard.”

“Passenger trains do not fit their culture,” he added. “We don’t want them operating the passenger train either, but we need more co-operation in making sure we have an effective operator of the passenger train. I hope we can find one quickly with the co-operation of CN.”

As for recruiting Railmark, CN insists it did its job.

“During the processes in which we were looking for a third party to take over, CN did its due diligence in terms of looking into the company and selected it as the best that was available at the time,” Hallman said.

“There have been, clearly, issues between Railmark and the municipality in terms of finding a funding mechanism, but that doesn’t involve CN.”

CN is required to ensure continued operation of the Agawa train as a result of contractual agreements it has based on 2008 Northern Ontario Heritage Fund Corp., funding the train received for upgrades to its coaches and the installation of an audio-video system. NOHFC provided $5 million toward a $10-million train refurbishment and revitalization project in the hopes of increasing tourism.

CN indicated in June it seeks a third-party with secured financing to acquire the Agawa Canyon Tour Train and would consider all qualified operators with suitable committed financing.

“I guess because they don’t have a legal obligation to us and to the stakeholders that depend on that passenger train, they don’t treat it with as much respect,” Errington said.

Stakeholders along the route, including property owners, outfitters, tourist operators and small communities, say the continued service is essential to them.

The recent disruption to the route’s southern portion stymied tourism, many reported.

“It hasn’t been a very nice year and this was shaping up to be one of the best tourism years in over a decade,” Errington said.

“And the fact it could end up being a very negative year and possibly a devastating one for businesses like mine, is not good for the local economy.”

Now, the service’s entire cancellation spells not only lost dollars, but threats to the well-being of those who use the line to reach remote destinations, both Errington and Savory-Gordon contend.

“We consider it a really serious crisis because there are people totally in a mess,” Savory-Gordon said. “I even heard of somebody who needed medication and it couldn’t be delivered by train. It is a terrible mess.”

Technically, Railmark Canada can effectively shut down its operations immediately, leaving stakeholders along the line stranded and without service.

Errington, whose tourist resort along the ACR relies on the passenger rail service to transport guests to and from the operation, said people are “cut off here” and are without cellphone service.

“There could be canoeists out there on a two-week canoe trip,” he said. “They come to the train and they’re waiting there. ‘Well, where’s that train?’ This is a wilderness area and trains are supposed to be reliable and that’s what we need.” He questions the quality of the last remaining week of service.

“Are we going to have trains going or not?” he said. “Trains are supposed to be the essence of reliability. At one time, people used to set their watches by trains going by.”


Algoma Central Railway passenger service still in trouble

From Soo Today:

A Railmark engine.
A Railmark engine.

The city of Sault Ste. Marie Ontario has accepted a recommendation to not sign a final agreement with Railmark Canada regarding the operation of the passenger rail service between the city and Hearst.

Railmark has failed to produce a required line of credit.

“One of the preconditions (for the city to sign) was financing in the form of a line of credit (from Railmark), so we cannot at this time recommend we proceed with the signing of the agreement,” said Tom Dodds, Sault Ste. Marie Economic Development Corporation CEO and interim chair of the ACR passenger service stakeholder working group, speaking to council Monday.

“What I’m saying is now we have to look at other options (other operators to run the passenger rail service),” Dodds told council.

Looking at those other options has already started, but doesn’t necessarily rule out Railmark, Dodds told council.

Meanwhile, Railmark Canada President B. Allen Brown said Railmark will continue rolling along from the Sault to Hearst and back at his own expense until he gets that line of credit.

“It (council’s decision) was something I was expecting,” Brown said, speaking to SooToday.

“I’m really disappointed because we’re working very hard, we’re just a little bit away from the finish line (securing the line of credit).”

“I intend to return to Michigan to get the rest of the requested financial information together and finish the process,” said Brown, a U.S. businessman.

“I’m not a quitter,” Brown said.

“We’ve already got the licensing (rail operator certificates and insurance) to do all this.”

Council, in an unanimous recorded vote, accepted the recommendations from Dodds, as interim chair of the stakeholders working group, to not sign the final agreement with Railmark, explore other options in terms of a third party operator for the Sault to Hearst service, and write to both the federal government and CN requesting their continued assistance in keeping the line alive.

CN previously operated the Sault to Hearst passenger rail service with $2.2 million in annual federal funding.

After the federal government announced in 2014 it was ending that subsidy, a group comprised of a wide range of stakeholders was put in place, known as the ACR Passenger Service Stakeholder Working Group.

Two of the stakeholders were the city of Sault Ste. Marie and the Sault Ste. Marie Economic Development Corporation.

After much lobbying, including the efforts of Sault MP Bryan Hayes, it was announced March 31 the federal government (Transport Canada) agreed to provide $5.3 million in funding to Railmark over the next three years to keep the Sault to Hearst passenger rail service running, with the hope the company can turn the service into a self-sustaining, enhanced rail experience for tourists.

Under the new arrangement, the city of Sault Ste. Marie found itself handling the federal financing for Railmark, and members of city council have expressed concerns Railmark may not live up to all the necessary pre-conditions, with the city being left on the hook.

“What we’ve said is ‘it’s a bit of a time out’ and look at all the options…even today there was a meeting with the stakeholders and Railmark to talk about what are the other things we can do so that it’s in everybody’s interest to go ahead and sign the agreement,” Dodds said, speaking to SooToday.

“Our objective is to grow that business…during this period we would expect we’ll have from Mr. Brown the information as to a line of credit in place, so we can come back with something with substance for the passenger service.”

“Where there is certainty is that the government has made a commitment in terms of five million dollars over three years for another third party operator, Dodds said.


M-1 Rail helps get Woodward developments rolling

From The Detroit News:

Construction along Woodward Avenue. (From The Detroit News)
Construction along Woodward Avenue. (From The Detroit News)

Rail may be a year away from ferrying passengers from downtown to Midtown, but housing developments already are popping up along the Woodward Avenue route: an early sign the streetcar service could play a major role in eradicating blight along the 3.3-mile line.

It’s been a hard-fought battle to fund and create the M-1 Rail. While critics predict it will end up a costly mistake, boosters say it will be a game changer that will produce dense, walkable districts.

“We went to Portland, Minneapolis, Denver and San Diego and … we were told light rail was the single dominating economic event that took their cities to the top,” said Dan Gilbert, the billionaire founder of Quicken Loans Inc. and a prime mover in downtown Detroit’s resurgence.

The public transit system will travel on Woodward from Congress Street downtown to West Grand Boulevard just past New Center. Much of that stretch is under major construction in preparation for the streetcars’ debut as early as fall 2016.

Within 10 years, its supporters contend, the M-1 Rail will drive $3 billion in development and 10,000 housing units, filling the yawning gaps of dead buildings and empty lots along Detroit’s most storied street.

“You would really have to go back to the high point of Victorian times to find another era when that stretch of Woodward had plenty of housing,” said Rebecca Binno Savage, a historical preservationist for the Detroit firm Kraemer Design Group.

“Picture the David Whitney mansion: That’s when it peaked as a residential street,” she said.

David Whitney was a lumber baron who lived large and exquisitely in a 22,000-square-foot mansion at 4421 Woodward. His palatial home is now The Whitney restaurant.

Near the 12 stops along M-1’s route, at least 10 housing plans are in the works. Some are still on the drawing board and others will be open by the end of the year. They include:

■A 300-unit complex is intended on the site of the parking lot in front of Comerica Park, home of the Detroit Tigers. That project is being spearheaded by Olympia Development of Michigan, the real estate arm of Ilitch Holdings Inc. The Ilitches, who own the Tigers, also are behind the plan to overhaul 45 blocks north of downtown. The area includes the Red Wings arena being built along Woodward and will have an M-1 Rail stop.

■A 200-unit housing project is slated for an empty lot in Brush Park, developed by the principals of Broder & Sachse Real Estate Services Inc. in Birmingham.

■Also, 250 residential units are part of the huge plans for the former Hudson’s site, which will include 225,000 square feet of mixed-use space and 900 parking spaces. That project is being developed by Gilbert.

The rail project also is drawing investments in smaller buildings, key to erasing the pockets of blight that still plague Woodward.

Plans for the Junction

“M-1 Rail has a lot to do with the investment we are seeing, and the kind of investment we are seeing hasn’t happened in years,” said Richard Rubens, who is with the community group Friends of Milwaukee Junction.

Milwaukee Junction is a neighborhood north of New Center. In the past two years, at least a dozen buildings there have changed ownership. Many of those buildings were empty. Plans for them include both commercial and residential development.

Rubens said construction of M-1 Rail has convinced some investors that Milwaukee Junction will be “the next big neighborhood,” as residents and businesses get priced out of Midtown and downtown.

One of the smaller planned developments is a $2 million conversion of an empty two-story warehouse across the street from the Amtrak station as well as from a future M-1 Rail stop. The warehouse at 207 E. Baltimore, on the corner of Woodward, was bought in the county’s tax foreclosure auction two years ago. Plans are underway to convert it to 12 rental lofts by developers Edward Siegel and James Feagin.

In other parts of Woodward, the anticipation over the public transit line has allowed Joel Landy, a longtime local developer, to convert two long-empty structures into apartment and retail complexes. One of those buildings, at Woodward and Peterboro, has been only a facade for years, Landy said. The other building is near Woodward and the I-94 service drive, he said.

“M-1 is not the only factor, but it is one of the big ones, why banks will finance my projects,” Landy said. Both two-story buildings will each get a $1.1 million overhaul. Both will offer market rate rents for the apartments, ranging from $900 to $1,400 a month, depending on the size of the unit.

Efficiency expected

What convinced Landy to invest now is the way many people talk about M-1 Rail, he said.

“The difference between the bus and M-1 Rail is no one wants to take the bus,” Landy said. “You have no idea how long you will wait for the bus. But people are excited about M-1 Rail; their expectations are completely different. They expect it will be efficient, and you can tell it can attract a wide range of people who plan to use it.”


Algoma Central Railway supporters: Don’t sign that railway deal

From Soo Today:


After more than a year of lobbying to keep passenger service running between the Sault and Hearst, a local working group is now recommending the city not sign a funding agreement with the successful proponent.

In a report to council included in the agenda for the June 22, 2015 regular meeting, Tom Dodds, head of the Economic Development Corp. and interim chair of the passenger rail working group, recommends against signing a funding agreement with Railmark Canada at this time, citing the Wixom, Michigan company’s failure so far to provide proof it has the working capital necessary to proceed.

Dodds recommends “other options” be explored to secure a third-party operator for the Sault-to-Hearst passenger Service and that he and the mayor write a joint letter to the Minister of Transportation and CEO of CN requesting “their continued commitment” to efforts to find a short and long-term solution.

“As of June 16, 2015, the Stakeholder Working Group had received no confirmation that RCL had working capital financing, no confirmation of the equity that RCL would be injecting into the company, no draft term sheet from a working capital financier, nor does the Stakeholder Working Group have any written comments from RCL regarding the draft agreements – despite two prior written formal demands with delivery dates and consequences,” says the report to council.

The federal government announced at the end of March that it would provide a $5.3-million subsidy over two years, on the condition the funds flow to Railmark Canada through the city of Sault Ste. Marie.

A working group report to council earlier this year says CN selected Railmark to run the passenger line from among three competing bids in the fall, after which members of the local working group began pressing the Ministry of Transportation for funding.

This came after what the working group has described as a “thorough analysis of (Railmark’s) bid” prior to final negotiations with CN taking place in January and after “due diligence” being undertaken on CN’s part before it signed a deal with Railmark as a third-party operator in March.

City council has also lent its support to efforts to save the rail line, having sent letters to federal Transportation Minister Lisa Raitt in support of the working group’s earlier recommendations that Railmark be funded as a third-party operator.

It is unclear what happens if the city doesn’t agree to fund Railmark.

MP Bryan Hayes, who has lobbied his Conservative colleagues for funding to keep the line running, told SooToday last week that he expects the funding would still be in place if the city doesn’t sign an agreement with Railmark and that the ball would be back in CN’s court.

CN reiterated this morning that should the city and EDC not complete the agreement with Railmark, it has no plans of continuing to operate the passenger service.

“The company is clear that it is not prepared to operate the Hearst passenger train,” said Mark Hallman, CN’s director of communications and public affairs.

CN will continue to operate the Agawa Canyon Tour Train after plans to have Railmark take over that service did not come to fruition.

CN will not be operating the Snow Train.

Dodds says in the report that Railmark Canada continued, as of Tuesday, with efforts to secure the required working capital and raises the possibility of a lawsuit should the city refuse to continue to negotiate with Railmark.

The report also notes that CN officials have been working with Railmark Canada earlier this week to help the company put a term sheet together for financing.

Dodds has said that if the Railmark deal does not come through, he hopes there would be an opportunity to find an alternative third-party operator.

According to the working group’s report to council, Railmark Canada has been operating the Sault-to-Hearst passenger service throughout May and June three times a week at its own expense – estimated to total more than $200,000 since May 7.

CN employees continue to operate the train under Railmark’s oversight, though Railmark employees are “gradually” taking their place, Hallman said.


More passenger train service may be arriving in Sarnia

From the Sarnia Observer:

Via Rail CEO Yves Desjardins-Siciliano speaks to reporters on Wednesday June 17, 2015 at a luncheon in Sarnia, Ont. Via announced it is working to expand rail service in Sarnia, beginning in 2016 with additional runs to London. (Paul Morden/Sarnia Observer/Postmedia Network)
Via Rail CEO Yves Desjardins-Siciliano speaks to reporters on Wednesday June 17, 2015 at a luncheon in Sarnia, Ont. Via announced it is working to expand rail service in Sarnia, beginning in 2016 with additional runs to London. (Paul Morden/Sarnia Observer/Postmedia Network)

The audience at a Sarnia Golf and Curling Club luncheon hosted by the Sarnia Lambton Chamber of Commerce applauded Wednesday when the head of Via Rail announced plans to add more trains between Sarnia and London.

“You’ve made my day,” Sarnia rail advocate Jim Houston told Via CEO Yves Desjardins-Siciliano after the announcement of the changes expected to begin by 2016.

“I want to see the schedules before I make a real firm comment,” Huston said later, but added, “If we’re going to have four trains a day, for sure, that’s a blessing.”

Local rail advocates, along with Sarnia-Lambton officials, have been lobbying for years to see passenger rail service improved, even as Via cut it back to one train a day to and from Toronto.

Desjardins-Siciliano said Via plans to increase the service in Sarnia to four trains daily, starting in 2016, but he adding it’s not a done deal since it’s subject to the availability of track, something Via will have to work out with freight rail companies.

“We’re meeting with our freight partners to discuss those plans,” Desjardins-Siciliano said.

He said the first run will be from Sarnia to Toronto, with adjustments intended to “shave a bit of time” off the current trip.

The additional trains will be a “commuter run” during the day between Sarnia and London using two-car self-propelled trains.

Via announced earlier it plans to make London a passenger service hub in southwestern Ontario.

During his presentation, Desjardins-Siciliano challenged the community to get behind the changes, spread word about Via’s service and help increase the number of train riders in Sarnia-Lambton.

“The reality is that over the last 30 years, ridership has been declining in and out of Sarnia,” he said.

That led to a reduction in service in 2012 as Via worked to stay within its budget, he said.

Via Rail still has a more than $300-million deficit that has to be covered by Canada’s taxpayers, Desjardins-Siciliano said.

“We have to be very careful how we spend Canadian taxpayers’ money.”

What has changed more recently is that the federal government has provided Via with funding to improve its equipment, plus there has been growing demand for rail service in the country in recent years, he said.

“The market seems to be looking for rail service, like it wasn’t for the last 20 years.”

While ridership has continued to drop in Sarnia, Desjardins-Siciliano said, “some of that is self-inflicted” because of actions by Via.

In challenging the community to support the proposed boost in service, he said, “The community has to recognize its role in changing these statistics.”

Desjardins-Siciliano said it is “too early” to say if Sarnia will see its passenger train station staffed again, something lost in past cutbacks.

“Manning a station today requires significant traffic, because technology takes away a lot of the needs of manned stations,” he said.

“You don’t need a paper ticket. You can just have the ticket on your phone.”

Desjardins-Siciliano said he visited the Sarnia Via station Wednesday and promised the audience he would an official there in the coming weeks to look into the need for repairs to the building.