Beltline price has city looking for options

Sep. 14, 2013 @ 06:36 PM

Now that the Norfolk Southern Corp. has told Durham officials the price for the so-called “Duke Beltline” rail spur that rings downtown is $7.1 million, local leaders are trying to figure out what they’ll do next.

Officials would like to acquire the beltline for a future rails-to-trails project akin to the American Tobacco Trail. But they only have about $2 million in local and federal funding lined up to pay for an acquisition.

The $7.1 million quote emerged from a new appraisal responding to the city’s renewed attempts to persuade Norfolk Southern to sell the right of way.

And “it does not appear that the City has much leverage at this point to persuade” the company to lower its price, City Manager Tom Bonfield told City Council members by email earlier this week. “Wish I had better news.”

Bonfield and Mayor Bill Bell learned of the railroad’s price Aug. 21, when they met with officials from Norfolk Southern’s property division to discuss the project.

Bell responded by asking railroad officials to consider leasing the right of way to the city. “They said they were open to that,” the mayor said. “We have to sit down and figure out whether that’s a viable alternative.”

But the railroad would only be interested in leasing the property to the city for 10 years.

That, and the prospective annual cost to the city of a lease, “led me to believe there was nothing too practical” in the idea, Bonfield said in an interview.

City Council members are nonetheless encouraging the manager and his staff to consider it.

“I hope we will explore the lease prospects, and I hope we can get [Norfolk Southern] to think beyond that 10-year time frame,” Councilman Steve Schewel said in an email to Bonfield.

The city manager and the mayor both said there’s little prospect of the city’s dipping into its own coffers to come up with the $5 million or so extra it would need.

Closing the gap is “not feasible, as far as I’m concerned, out of our revenue,” Bell said.

Bonfield pointed to the city’s other capital needs.

“I personally don’t think it’s worth $7.1 million to the city for that trail,” he said. “But that’s just my judgment about things, in light of the other priorities and needs we have with limited resources.”

The mayor hinted that a more likely source of additional purchase funding is the private sector, specifically some major property owners along western side of downtown.

“It really depends on who else might want to buy in to it,” Bell said, declining to say who he had in mind.

City officials have been working in conjunction with an ad-hoc group of trail advocates and with former Downtown Durham Inc. President Bill Kalkhof, who confirmed he’s been keeping key property owners in the loop.

In the course of talking to them about the beltline, “I said, ‘Don’t be surprised if the city or the group of folks I’m working with come back to you and say would you consider putting money into the deal,’” Kalkhof said.

He added that the key players on the west side are Duke University, Measurement Inc. owner Hank Scherich and West Village complex owner Federal Capital Partners.

A private contribution to the project is “not an easy ask for them,” Kalkhof said. “Look what they’ve already invested in that corridor. These are folks who’ve already stepped up for the community in a big, big way.”

But the beltline is a long-term initiative akin to the Durham Bulls Athletic Park and the Durham Performing Arts Center that took years to bring to fruition.

With them, “we found a way,” Kalkhof said. “Sometimes it took a long time, but we found a way.”