A deal on the Lakeway Drive rail crossing -- a matter of intense private negotiations for the past couple of months -- was finally made public in a special meeting of the Seven Lakes West Landowners Association [SLWLA] on Thursday night, February 2.
But the deal, it turns out, is not quite done.
SLWLA President Mick Herdrich explained that the Association is involved in ongoing negotiations with the Aberdeen Carolina and Western Railway Company [ACWR], as well as other property owners who depend on the crossing at the front entrance of Seven Lakes West, in an attempt to convert the crossing from a private, leased entrance into a permanent public crossing. Herdrich said a deal must be finalized by February 15. [The Board's presentation is available on the SLWLA Website.]
He outlined three options:
• Do nothing and leave the crossing the way it is.
• Enter into a private crossing license agreement.
• Make a one time payment to ACWR and make the crossing a public crossing maintained by the railway company and the NC Department of Transportation [NCDOT].
Herdrich made clear that the Board is working toward making the third option -- the only permanent solution -- a reality. But that permanent solution would require a one time payment of $169,000 to ACWR.
That payment would result in a permanent easement allowing Lakeway Drive to be designated a "public crossing in NCDOT's system, and allow the state to proceed with a long-planned safety upgrade, installing lights, gate arms, and an interconnect with the traffic signal at the intersection. It would also eliminate any SLWLA responsibility for future maintenance or insurance fees for the crossing.
Affected Businesses May Contribute
Herdrich explained during the meeting that the Association may not have to bear the entire $169,000 cost of obtaining ACWR's cooperation.
Currently, the Board is in negotiations with at least three possible contributors: Seven Lakes Plaza owner James Kirkpatrick; Property Center owner Phil Harrell; and BB&T, which owns not only the property on which the current bank sits, but also the former ReMax Prime Properties office on the opposite side of Lakeway Drive.
“We do have some partners in this,” said Herdrich, “We are not alone.”
Should the Board decide to go with Option 3 and make a one time payment, BB&T has committed to a “substantial” contribution,” explained Herdrich.
The Board was not at liberty during Thursday’s meeting to disclose the amounts being offered by any of the other potential contributors.
“We’re not going to show our cards in the middle of a negotiation,” said SLWLA Legal Director Jack Stevens, “We are up against a time constraint; and we have been working very hard to develop a plan and that plan is ongoing. To give you all the details of that would compromise our ability to complete those plans and negotiations.”
When asked by Westsider Joel Martin whether former Westside developer Lakeside Development, LLC will help pay for the railroad costs, Stevens explained that the Board is considering other individuals and partners aside from the three named.
Former SLWLA Legal Director Ed Silberhorn was optimistic that the Board will have more contributions towards the one time payment.
“They [the Board] do have a little less than two more weeks to do the extensive negotiations they have undertaken already,” explained Silberhorn, “And they will bear more fruit yet from today’s negotiations.”
Although the size of anticipated monetary contributions were not discussed, Silberhorn, who has been consulting with the Board on their negotiations said, “We will get reimbursement of a substantial amount of what we are being charged.”
“If there is some way we can get a dollar to contribute to this pot, we will figure out how to do it,” said Herdrich, whose comment was met with applause from the audience.
The Board committed to providing Members with a list of participating contributors and the amounts of their contributions, once the deal is done.
SLWLA's contribution will come out of current reserves, eliminating the need for a dues increase to cover the unexpected cost, Herdrich explained, but he added that taking the funds from reserves will require a reassessment of the Association's Long Term Financial Plan.
Westsider Pete Chase asked if Beacon Ridge Golf Course would be contributing to the amount requested by ACWR. Herdrich explained that the Club was invited to the negotiations, but did not attend.
Evaluating the options
“You can call it coercion, you can call it extortion, or you can call it blackmail, or you can call it hardball business -- but the sooner we all realize the railroad has us by the short hairs there isn’t a hell of lot we can do about this,” said Long Range Planning Committee Members Bud Sales, who has been involved in the railroad crossing issue since 2002.
Referring to Option 1 -- refusing to make any payments, he told his fellow members: “I can assure you, if that front gate closes, it will cost every one of us a hell of a lot more than we are talking about right now.”
With no current private crossing agreement in place, refusing to meet the Railroad's demand for payment could lead to the closure of the crossing -- and with it, the SLWLA front entrance.
That would require that the current East Gate be reconfigured as the primary entrance to the community -- and the opening of another entrance somewhere else on the West Side. Herdrich explained that, with 4500 cars using the front entrance daily, moving it would likely require upgrades to the road as well as the gate.
“It would have a dramatic impact on the community,” said Herdrich, explaining that both SLWLA property values and the overall Seven Lakes Business Village could be adversely affected.
The second option open to the Board would be to refuse the one time payment and enter into a private crossing license agreement similar to those that have existed between ACWR and Westside developers in the past.
This would keep the front entrance to NC HIghway 211 open. However, it would also entail a license fee of approximately $2,000 a month for the lifetime of the contract, which would have no end date at the time of signing.
Option 3 is the only option that would make the crossing public, the Board's outside attorney Stephen Later explained.
“In terms of a public crossing . . . once that is done, it’s done,” said Later, “It becomes a public crossing. The crossing itself becomes property of the state of North Carolina therefore we have a right to use it in perpetuity without additional cost.”
Member Comments
Westsider Debbie Fleece, a former employee of ACWR, recommended that the Board go with Option 3, because it is a one time fee with no further commitments. “I really think option number three is the best one for our community,” she said.
Ruth Caldera agreed with Fleece: “If we did the count and we took BB&T to task, so that they would pay their fair share, and the small shopping center would pay their fair share, it would make more sense . . . we might be able to digest it better.”
Westsider Margaret Sheroff asked the Board “So our option is to go with this blackmail or reconstruct everything at the back gate?”
More opposition to the railroad’s demands came from another member, who said: “This has been going on for thirty years. Why now do we have to pay? Do you really think they will close that crossing? . . . I really don’t think they have the nerve to do that. I would call their bluff and hold it for as long as you possibly can.”
ACWR and NCDOT have given the Westside Board until February 15 to make a decision on whether to meet the railroad's demand. The Board plans to make a decision on the matter at their next regular meeting scheduled for Tuesday, February 14 at 9 am.
SLWLA and ACWR Negotiations
The Board's presentation Thursday night provided some background on their negotiation with ACWR.
In October of 2011 the SLWLA Board was approached by ACWR management, who indicated that the Association would need to help defray the cost of maintenance, insurance, and repair costs to the front gate railroad crossing.
“Most of us thought the RR issue was behind us,” said Herdrich. “We thought this was over, we have been arguing about it for years.” The Board asked ACWR to put a dollar amount on the table.
ACWR came back to the Board in November 2011, proposing a one-time payment of $212,000. The Board was able to negotiate the price down to $169,000.
The cost of the crossing upgrade -- along with related crossing closures in West End -- is expected to total $650,000. NCDOT will tap federal rail safety funds to pay for the project; ACWR will handle most of the actual signal design and construction, being reimbursed for that work.
After ACWR delayed for months the signing of a permanent easement needed to move the project forward, NCDOT imposed a December 31, 2011 deadline, or the funding would be shifted to other projects.
“DOT wanted them [ACWR] to sign this,” said Herdrich, “They were begging them to sign this thing.”
The railway company signed the easement, but still has the ability to exit that agreement, absent a deal with the Association.
Railroad Crossing Agreement History
The original Private License agreement for the railroad crossing was issued in 1979 by Norfolk Southern Railway to the original developer of Seven Lakes West, Fred Lawrence. Since then both the developer and the owner of the railroad have changed.
“Like most things in Seven Lakes West, to find out who did what to whom when is very difficult.” said Herdrich, “And it requires an incredible amount of research.”
Today the Association owns Lakeway Drive up to the crossing, but does not own the crossing itself -- that is ACWR property. The businesses clustered around the Westside front entrance have easements to access Lakeway Drive.
There is currently no private agreement in place for the Lakeway Drive crossing, and NC law gives the railroad control over the crossing.
“It’s unfortunate, but they have all the control in this particular issue,” said Herdrich.
NCDOT recommended that the Lakeway Drive crossing be upgraded as part of a railway corridor safety project that stretches from Seven Lakes to Edgewood Terrace in West End. The upgrade would include safety gates, resurfacing the entire area, putting in turning lanes and making it a public crossing.
If it becomes public ACWR and NCDOT will become responsible for all of the liability and maintenance costs of that crossing.
“Seven Lakes West would no longer have any responsibility, once it became public,” explained Herdrich.
Board members Jack Stevens, Mick Herdrich, Don Freiert, Jane Sessler, and John Hoffman have all worked on the background and current negotiations with ACWR. The Board was supported in the negotiations by attorney Steven Later.
