From Trains Magazine:
Watco Transportation Services has reached an agreement to make a “preferred equity investment” in Federated Capital Holdings, owner of the 400-mile Great Lakes Central Railroad. The deal has the possibility of reuniting the old Ann Arbor Railroad main line, which has not operated as a single railroad in more than 30 years. It also includes Federated Railcars, owner of a fleet of refurbished passenger cars.
“This partnership between two entrepreneurial companies will help insure the long-term success of local rail service in Michigan and also provides a mechanism for the continual growth and improvement of our transportation assets to help grow Michigan’s manufacturing and agricultural interests,” Federated Capital President Louis Ferris says. “We also believe that this partnership provides significant benefits to the Michigan Department of Transportation’s passenger efforts.”
The Great Lakes Central stretches from Ann Arbor north to Cadillac on the former Ann Arbor main line with branches to Thompsonville, Traverse City, and Petoskey. The primary commodities hauled include grain, sand, and plastic. The railroad interchanges with Canadian National and Huron Eastern in Durand, CSX Transportation at Anne Pere and Howell, the Watco-owned Ann Arbor Railroad at Ann Arbor, and the Mid-Michigan Railroad at Alma.
Federated Railcars, through the railroad’s shops in Owosso, rehabs and upgrades its passenger car fleet to be used for the Michigan Department of Transportation’s proposed “Wally” Ann Arbor commuter service.
“The Watco team is extremely proud and honored to enter into a long-term strategic partnership with the excellent team at Federated Capital Holdings,” Watco CEO Rick Webb says. “We look forward to the opportunity to work with Federated Capital Holdingsto create extraordinary value for rail shippers in Michigan.”
Watco acquired the “new” Ann Arbor Railroad in late 2012. In 1977, the state of Michigan contracted with the newly formed Michigan Interstate Railway to operate the bankrupt “old” Ann Arbor. Michigan Interstate ceased operation north of Ann Arbor in 1982, forcing the state to split the lease of the line with the Tuscola & Saginaw Bay, which later became Great Lakes Central. Michigan Interstate filed for bankruptcy in 1983, and from that corporation the modern, independent Ann Arbor Railroad was formed in 1987.