21 February 2008
S.D. Measure Could Speed DM&E Line
Pierre South Dakota USA - Condemning land for a railroad
right of way would be easier and faster under a bill approved by a legislative committee Thursday, but it's a measure some West River
landowners oppose.
The Dakota, Minnesota & Eastern Railroad proposed the legislation to help speed up a $6 billion expansion. The project includes
260 miles of new rail line in western South Dakota.
DM&E president Kevin Schieffer told the House Transportation Committee the bill would help the railroad overcome delaying tactics
by opponents. "It isn't about changing the rules of the game, it's about getting into the game," Schieffer said.
Some landowners argue that Senate Bill 174 will make it harder to oppose the use of eminent domain to force them to sell rights of way
that they say could ruin their land. "We're totally forgotten in this," Tom Krafka of Rapid City said in an interview
Thursday.
The transportation committee, however, voted 11 to 1 to send SB174 to the House with a "do pass" recommendation.
Rep. Brian Gosch, R-Rapid City, cast the lone dissenting vote.
"I'm all for the project," Gosch said later in an interview. But he said the bill gives too much leverage to railroads.
"That's a very powerful authority to grant to any entity," he said.
Krafka didn't attend the hearing Thursday. He said passage was a foregone conclusion. "Pun intended, this is being
railroaded," he said.
The Senate passed the measure 20 to 13 earlier this month. Gov. Mike Rounds, who supports the railroad expansion, is almost certain to
sign the bill into law.
SB174 would require the state Transportation Commission to act on eminent domain requests within 90 days of the date of the
application.
Jeremiah M. Murphy of Rapid City, a lobbyist for the Triple 7 buffalo ranch near Hermosa, asked lawmakers, "Why are we in such a
rush to put this burden on landowners?"
DM&E spokesman Jafar Karim, however, pointed out that other state commissions, including the Public Utilities Commission, sometimes
act within deadlines.
SB174, which applies only to railroads, also would:
-Limit all parties' ability to disqualify hearing examiners.
-Allow railroads to reapply if eminent domain applications were denied.
-Allow railroads to begin construction while appeals if landowners took the railroads to court.
"Before, we had a pretty decent ability to force them to a settlement," Krafka said. "Now, they could be running trains
over my property before I ever see a settlement."
DM&E wants to transport Wyoming coal across South Dakota to Minnesota in an estimated 34 trains a day. To do that, the railroad
needs to build a new line in South Dakota from the Wyoming border to about Wall, on a proposed right of way that follows the Cheyenne
River.
The DM&E will have either buy rights of way from willing sellers or force sales through eminent domain.
"We've developed a detailed landowner outreach program," Schieffer told the committee.
Krafka disagrees. He owns 700 acres along the Cheyenne River. He uses the land for recreation and relaxation, but the new rail line
would bisect the property, making it useless for his purposes. "It's an absolute crime to ruin the Cheyenne River with a
railroad," he said.
Krafka bought the land in 2000, but he didn't hear from DM&E until 2006. Krafka had hoped for a buyout. Instead, the railroad
offered to pay the difference between what the land was worth now and what it would be worth cut in half by a rail line - as estimated
by an appraiser.
Krafka refused the offer, and he said he hadn't heard from DM&E since then. He also predicted that most of the 100 or so landowners
from Wall to the Wyoming line would fight the condemnation.
Schieffer said Krafka was one of only three landowners that had rejected an offer outright. He said he couldn't discuss the terms, but
he denied the company had acted unfairly.
Schieffer also disputed the claim that most landowners would fight the right of way. In an e-mailed response to a
question, he estimated there are "roughly 50 properties in various stages of appraisal or reappraisal or negotiation or
renegotiation right now." He estimated "at least 10 percent" of the negotiations are completed.
Schieffer also has widespread support across the state - from agriculture and business groups, including the Rapid City Chamber of
Commerce.
The project could have a big impact on the state's economy. DM&E will refurbish 600 miles rail line along a right of way the
railroad already owns, from Wall east to Minnesota. Supporters say the improved rail line will help transport more wheat, corn, and
ethanol to out-of-state markets.
"This is so important to our economic survival," John Sumption of the South Dakota Farmers Union old lawmakers.
"It would a huge increase in jobs for the construction industry," said Deb Mortenson, a lobbyist for general contractors in
South Dakota. The budget for the DM&E project is eight times the annual construction budget of the South Dakota Highway Department.
David Owen of the South Dakota Chamber of Commerce and Industry said the railroad would help thousands of workers in manufacturing
plants. "They need to move material in, they need to move product out," Owen said. "We need this railroad."
Krafka acknowledge the railroad had support. "This is labeled as an economic development tool, but it's taking away my
rights," he said.
Even if SB174 becomes law, the DM&E expansion will remain a proposal. Landowners can still challenge the use of eminent domain - in
a Transportation Commission hearing and in court.
Canadian Pacific is in the process of buying DM&E, and the new parent company has announced that no final decision had been made on
the Wyoming coal project.
Schieffer told lawmakers that Canadian Pacific first will have to know that there will be a right of way from Wall to Wyoming.
"This is one of the issues that from day one was cited as a concern," he said.
The issue also is a concern for landowners like Victoria Edoff, who ranches near Hermosa. She and her husband have spent 25 years
improving and adding to their property. "It would split our place in two," she said.
Railroad supporters say the question that Edoff, Krafka and other landowners likely will have to face is not whether the DM&E will
get the right of way but how much they will be compensated for it.
Even Rep. Gosch, who voted against SB174, predicted the project would proceed - with or without the bill. "And I'm glad about
that," he said. "I want it to succeed."
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