EAST LIVERPOOL - The Columbiana County Port Authority is moving ahead with plans to pay off the remaining debt on its railroad, with or without a buyer.
Port authority CEO Tracy Drake reported at this week's meeting he is using $1.4 million in lease revenue to pay off the loans obtained to help purchase the former Youngstown & Southern Railroad in 2000 and repair the rail line.
The amount owed is actually $1.7 million -$500,000 to PNC Bank and $1.2 million to the Ohio Rail Development Commission (ORDC). The ORDC figure includes $900,000 in principal and $300,000 in interest, and Drake has asked the interest be waived
Preliminary discussions have indicated the state may be willing to waive the interest owed, but this will require ORDC board approval, and the board has yet to meet. Drake indicated the ORDC is likely to waive the interest because it has already forgiven $1 million in penalties imposed for failing to make loan payments over the past several years.
The port authority was poised to use money from a pending sale of the railroad to pay off the remaining debt, but the company backed out on the deal earlier this month after claiming some of the property was contaminated.
"At this point we were hoping to have the money for the railroad, but that did not work out, as you all well know," said board President Steve Cooper.
The $1.4 million to pay off the railroad debt will come from the $5 million the port authority is to receive for leasing 22 acres to the Houston-based Arrowhead Utica Pipelines, which intends to build a shale gas-transfer facility at the port authority's industrial park in Wellsville.
After the railroad loans are paid off, Cooper said the port authority will be nearly debt free for the first time in years, with the remaining obligations associated with development of its Leetonia industrial park. Those debts are covered with rental fees paid by tenants.
The failure of several major projects to get off the ground over the years, such as the railroad acquisition, resulted in a cash-flow problem for the port authority.