In a letter written to the Surface Transportation Board March 3, Union Pacific formally opposed KCVN LLC and Colorado Pacific Railroad LLC’s plan to acquire the 228-mile dormant Tennessee Pass, Trains Magazine reported.
In a feeder line application, KCVN and Colorado Pacific said they would buy the pass for $8.8 million, down from a $10 million offer they made in November.
In December, Union Pacific declined Colorado Pacific’s offer and said it was in “promising discussions” with another party who wants to restore service on the line.
Union Pacific said federal regulators should not direct a sale for the route using a legal maneuver designed to preserve rail service. Jeremy Berman, Union Pacific general attorney, said the railroad will provide additional details about the negotiations and the name of the interested party in a formal filing subject to a protective order.
“The Tennessee Pass Line is simply not an appropriate target for a feeder line application,” Berman said in the letter to the board. “The feeder line process was created to preserve rail service to existing shippers. It is meant to prevent railroads from allowing active rail lines to fall into such a state of disrepair that shippers can no longer ship via rail.”
Union Pacific said it is unaware of shipping service complaints or of service demands since the pass was shut down in 1997. It also said the Central Corridor through Moffat Tunnel, the Overland Route and the Sunset Route were are all superior routes compared to Tennessee Pass and its 3 percent grade.
KCVN and Colorado Pacific were successful in their 2018 feeder line application to gain control of the 121.9-mile Towner Line in eastern Colorado.
If sold to Colorado Pacific, the Tennessee Pass line would create a route of nearly 400 miles from Towner to Dotsero. KCVN’s filing said that line would provide a shortcut to grain and mining shippers to Utah and the West Coast.
KCVN is controlled by New York real estate developer Sheldon Solow. His son, Stefan Soloviev, controls Colorado Pacific and holds more than 350,000 acres of land in Colorado, Kansas and New Mexico. His companies under Crossroads Agriculture own grain elevators in eastern Colorado and western Kansas.