Nov 022012

By Nick Worth
Members of the Navajo County Board of Supervisors held a special meeting Wednesday to decide if they should condemn the Apache Railroad under eminent domain in order to preserve it as a valuable part of the county’s infrastructure. Following considerable discussion, the decision was not to do so.
There are concerns within the local communities that the railroad may be headed for the same fate as the Catalyst paper mill, which is in the process of being scrapped by the Catalyst Paper Company, which owns the railroad.
A chamber full of citizens on both sides of the issue were in attendance when Board Chairman J.R. De-Spain called for public comment on the issue.
The first speaker to address the board was David Newlin, business manager of the Little Colorado River Plateau Resource Conservation and Development Area. Newlin urged the board to take every appropriate action to continue operation of the railroad, as it is an important part of the county’s infrastructure. He said he had contacted the American Short Line Railroad Association, which is a non-profit trade association that rep-resents the interests of short line and regional railroad members in legislative and regulatory matters, and ad-vised them of the Apache Railroad’s status.
Snowflake Town Manager Paul Watson told the board that the Catalyst Company has not let the town know what its plans for the railroad are.
“Other than the required communication, we have received little, if any communication from Catalyst with regards to their intentions,” said Watson. “At this point we have nothing to give us any indication that Catalyst has any desire to give any assistance or help in the future economic development of our area.
“What I do know is that for the economic future of that area, the rail is critical,” said Watson. “What few industries we have that are still there are utilizing the rail. What industries we have that are looking to come in are vitally interested in the continuation of that rail.”
He noted the issue is of critical importance to the area.
“At this time, we need the communities, the county and the citizens to rally around the fact that we need to make sure that the infrastructure that exists is not compromised in any way.”
Keith Watkins of the Arizona Commerce Authority told the board the Apache Railroad is a vital piece of infrastructure for the area.
“It is a significant connector and a significant asset to any industry that may be considering coming into this area,” said Watkins. “There is a significant process that needs to take place that requires the federal gov-ernment to become involved through an agency called the Surface Transportation Board.
“There are various notices of intent that need to be filed well in advance of anything that occurs and it’s a very lengthy process,” said Watkins.
He also said his group had contacted the Arizona Department of Transportation and had learned it is the agency in charge of railroads within the state of Arizona.
“They, to date, have had no notice of intent to abandon, which is good news for all of us,” Watkins said.
Snowflake Councilman Kerry Ballard told the board the railroad is a great asset for the community. He said that all the potential distributors the Snowflake economic development team has contacted specify they would need two things to move to Snowflake.
“They need land and rail,” Ballard said. “All of them need rail.”
Snowflake Councilman Tom Poscharsky said he has spoken to Catalyst and to some of the potential bidders.
“These are not nice people and they have no intention of doing anything, or being concerned about the benefits, or effects on the town,” he said.
He raised the possibility of the railroad being scrapped, and repeated his charges that Catalyst was in violation of bankruptcy court orders and that the FBI is investigating.
“The power of eminent domain can be used rightly, or wrongly,” Poscharsky said. “This is not an issue of taking an individual’s property rights. This is not a muffler shop in Mesa. This is a railroad that’s important to the community.”
Poscharsky told the board the railroad is important as an asset for economic development and as a factor in property taxes.
“It will be catastrophic to the county and catastrophic to the school system which also gets funds from property taxes,” said Poscharsky. He also said the loss of the railroad could be “catastrophic” to the potash mining proposals in Holbrook.
Steve Brophy, president of the Aztec Land and Cattle Company, told the board that in the beginning of the company, in the late 1800s, Aztec decided it would hold onto its land holdings until the day when Navajo County’s economic future arrived. He said Aztec’s plan was predicated on the presence of the Apache Rail-road.
“All of the infrastructure and all of God’s blessings this county has can serve as a basis for economic growth,” said Brophy.
“The reason I’m standing in front of you is to tell you in the starkest possible terms that this county is at a tipping point. As regrettable and as difficult as condemnation is, it seems to me it is the absolute duty of the policy-makers of this county to seize that moment, recognize how important the railroad is, condemn it and preserve it for public transportation and economic development, which is utterly within the rights of this county.
“I submit to you that if you do not do that, the Catalyst Company will work things so that railroad is cut up with acetylene torches and is sent to China and along with it, in those railroad cars that go to China, is going to go Navajo County’s economic future,” Brophy said.
David Brown, legal counsel for Aztec Land and Cattle Company, then told the board that without the correct use of eminent domain, there would be no power plants in Apache County. He said ranch property had to be condemned in order to build the rail lines that serve the power plants.
Taylor Councilman Jared Hatch then took the podium to caution the board not to rush into a decision on the issue.
“Catalyst is a private business that has the right to do what they’re doing,” said Hatch. “It’s important for businesses to do what’s best for them. As a businessman, I find it challenging when government entities get involved to handcuff businesses from doing what they need to do.
“I don’t see where the county has the funds to even entertain the idea of purchasing it,” said Hatch. “We need to do everything we can to attract business, but to not get directly involved in trying to become a business.”
He spoke on behalf of private property owners and their rights.
“It’s a private railroad, to benefit those within the area, to provide jobs if the market allows it,” said Hatch. “We should not force the market. Allow the market to happen. No government entity should be trying to force it.”
Hatch concluded by encouraging the board to govern and not to buy businesses.
“I believe in private property rights,” he said. “Let businesses do business accordingly.”
State Senator Sylvia Allen then cautioned the board to be careful in its decisions.
“We have to be very careful that we do not allow hate to fuel our decisions,” said Allen. “And we can’t let fear of the future drive our decisions, either.”
She said there are projects in the future that point to some hope for the county.
“I have to remind you that the railroad does not belong to you. It belongs to the shareholders,” said Allen. “It belongs to Catalyst.
She said condemning the railroad would be asking the taxpayers to become involved in a legal battle and in buying a railroad.
“I urge the board to use the best governing principles,” she said, and concluded that condemning the rail-road is “not the right course for taxpayers.”
After hearing from all in the call to the public, the board adjourned into executive session to obtain legal advice from County Attorney Brad Carlyon. Upon reentering the chamber, DeSpain called upon the board members to discuss their views on the proposed action.
Supervisor David Tenney told the board and the assembly he has always been concerned with preserving property rights. He said the board had been told it was its duty to condemn the road, in reference to Brophy’s comments to the board.
“Maybe I need to read up on what the duties are of a supervisor,” Tenney said. He said what is happening at the mill is a tragedy.
“I do not philosophically believe it is the duty of this board to step in. I cannot support condemnation at this time.”
Supervisor Jesse Thompson said he was in favor of employment and better economic opportunities, but that he would not go along with condemnation.
Jonathan Nez remarked the mill closure has impacted the Navajo Nation in forcing the Navajo Times to seek other newsprint suppliers. He also said the Navajo Nation was looking at “sitting down with some part-ners in a consortium” to purchase the paper mill.
“I’d like to gather more data,” said Nez. “What other economic element is out there? I need these questions answered.”
Supervisor Jerry Brownlow said he is still hoping something could be worked out for the purchase of the railroad.
“Philosophically, I come from a business background and I don’t believe in the government taking private property,” said Brownlow.
DeSpain said he would follow the wishes of his constituents and called for a motion.
Brownlow moved to not proceed with condemnation of the railroad and Tenney seconded the motion. It was then passed with DeSpain casting the only “no” vote.