Three years of often acrimonious and expensive legal haggling came to an end Tuesday with an agreement announced by Ulster County executive Mike Hein with the Catskill Mountain Railroad (CMRR).
Under its terms, CMRR agreed to withdraw the lawsuit it filed contesting the county’s action in terminating its lease on the rail corridor that stretches from Kingston to Highmount. The lease is due to end May 31, in any case.
The agreement will cost the railroad company an estimated $115,000, including about $40,000 the CMRR will owe the county in rental fees in 2015, but not the expense of moving heavy equipment off county property in midtown Kingston, according to CMRR president Ernest Hunt. CMRR has also agreed to Cease train operations on May 31, and to vacate the Cornell Street rail yard in Kingston on or before May 1.
Hein was not available for comment, but was quoted in a news release. “My administration has remained focused on ensuring the best of both worlds by designing a segmented plan that saves tourist train operations in the Kingston and Phoenicia areas, while simultaneously opening up the entire north shore of the Ashokan Reservoir to everyone without permit or fee, for the first time in over 100 years.”
Hunt, for his part, said he was relieved that the situation was resolved. “Our lawyers made a considered judgment that it would cost far more to go to trial than to settle,” Hunt said. “I’m glad it’s over. Three years of litigation has worn out everybody. It’s not a very good way to communicate between parties.”
Hunt estimated the railroad had spent over $600,000 in legal fees since the county served it with a notice of eviction, which the railroad took to state supreme court in 2013.
“We can only estimate what it has cost the county, but our lawyers tell us the county spent as much on outside legal counsel, about $200,000, as we did,” Hunt said. “The rest was done by in-house county lawyers.” The railroad doesn’t have an in-house lawyer.
The agreement requires the railroad to forfeit a $75,000 bond “to offset county litigation expenses.”
CMRR to respond to RFP
Timing was a factor in driving the settlement. The railroad’s 25-year lease expires at the end of May. Last month, the county advertised for requests for proposals to operate rail services between Kingston Plaza to near the Ashokan Reservoir on the eastern end of the old Ulster and Delaware Railroad and between Boiceville and Phoenicia at its western end. The deadline for submitting those proposals is May 6. Hunt said CMRR, which detailed a five-year development plan for its operation last year, will submit a proposal.
A key to the settlement, which Hunt said, “they insisted upon,” was a so-called “exit statement” crafted by the administration in praise of the county executive and signed by Hunt. One sentence reads, “I (Hunt) personally am thankful for the patience and professionalism of the county executive, his administration and the legislature during this impasse, and recognize that in some instances during the heat of debate some members of our organization may have become overzealous and unfairly politicized facts and or agendas.
“I thank the county executive for showing true leadership by balancing the numerous competing interests and arriving at a compromise that benefits everyone,” the statement signed “E.E. Hunt, pres.,” said.
“I think somebody must have held a gun to Ernie’s head for him to sign a statement like that,” speculated legislator Dave Donaldson, former chairman of the legislature’s special rail committee and an outspoken railroad supporter. On Tuesday the legislature in regular session approved the formation of a special six-member rail-trail committee comprised of legislators which will be appointed by party leaders next month.
Protest at legislature
Trail advocates at Tuesday’s meeting generally praised the settlement as opening the way for trail and rail development from Kingston to Phoenicia. But several rail advocates staunchly opposed a part of the plan that would tear up remaining tracks between Phoenicia and Belleayre for a walking, biking and hiking trail. They wanted tourist rail along the entire 38 miles of track from Kingston to Highmount. Plans are under way to establish twelve miles of hiking-only routes around the north end of the Ashokan Reservoir.
Catskill Mountain Railroad spokesmen have said they have neither the means nor the inclination to restore the 13-mile stretch of abandoned rail line west of Phoenicia, which includes some 7000 linear feet with no rails at all and two bridges washed out by storms. Trains have not run on that stretch since 1970.
Four years ago Hein proposed ripping up those tracks and selling the scrap, penciling in some $600,000 in revenue in his annual budget. It was not approved by the legislature.
The legislature now awaits the executive’s recommendations on the requests for proposals.