7-3001-1438-2
D-5496, R-4124
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE MINNESOTA TRANSPORTATION BOARD
in the Matter of the Petition of
the Chicago and North Western
Transportation company for FINDINGS
Authority to Retire and Remove CONCLUSIONS AND
24,775 Feet of !CC Trackage (Nos RECOMMENDATION
Unknown), Including 26 Turnouts,
On and South of the Site of the
Former Armour & Company Plant
in South St . Paul , Minnesota
The above-entitled matter came on for hearing before Administrative Law
Judge Richard C. Luis on April 28, 1987 at the Transportation Regulation
Board's Offices in South St. Paul. The record in this matter closed on
june 2, 1987.
Jeffrey R. Schmidt, Esq., Lindquist & Vennum, 4200 IDS Center, 80 South
Lighth Street, Minneapolis, Minnesota 55402, appeared on behalf of the
Petitioner, Chicago and North Western Transportation Company (Applicant,
Railroad) Elmer B. Trousdale, Esq., Oppenheimer, Wolff & Dannelly, W-1700
First Bank Building, St. Paul, Minnesota 55101, appeared on behalf of
Objectors Michael Kassan Realty, Fitzsimmons Company, R, Haz-Mat, Inc.,
Spantran, Inc. and Lenmark Development Company. Ronald F. Mattson, Manager of
Regulatory Affairs, Minnesota Department of Transportation, 810 Transportation
Building, St. Paul, Minnesota 55155, appeared on behalf of the staff of the
Transportation Regulation Board. Board Chairman Laufenburger, and Members
Keehr and Mayasich also attended and participated in the hearing,
Notice is hereby given that, pursuant to Minn. Stat. 14.61, and the
Rules of Practice of the Public Utilities Commission, as applicable to the
Transportation Regulation Board, and the Rules of the Office of Administrative
Hearings, exceptions to this Report, if any, by any party adversely affected
must be filed within 20 days of the mailing date hereof with the
transportation Regulation Board, Minnesota Administrative Truck Center,
254 Livestock Exchange Building, 100 Stockyards Road, South St. Paul,
Minnesota 55075. Exceptions must be specific and stated and numbered
separately. Proposed Findings of Fact, Conclusions and Order should be
included, and copies thereof shall be served upon all parties. if desired, a
reply to exceptions may be filed and served within ten days after the service
of the exceptions lo which reply is made. Oral argument before a majority of
the Board may be permitted to all parties adversely affected by the
Administrative Law Judge's recommendation who request such argument. Such
request must accompany the filed exceptions or reply, and an original aid five
copies of each document must be filed with the Board
The Minn sot a Transportat ion Regu 1 at ion Board will make the final
determination of the matter after the expiration of the period for filing
exceptions as set forth above, or after oral argument, if such is requested
and had in the matter.
Further notice is hereby given that the Board may, at its own discretion,
accept or reject the Administrative Law Judge's recommendation and that said
recommendation has no legal effect unless expressly adopted by the board as
its final order.
STATEMENT OF ISSUE
Whether public convenience and necessity permit the Petitioner to retire
and remove its tracks at and south of the old Armour plant site in South St
Paul .
Based upon all of the proceedings herein, the Adminstrative Law Judge
makes the following:
FINDINGS OF FACT
1. On January 14, 1987, the C&NW filed a Petition with the Board
Requesting authority to retire and remove 24,775 feet of track on and south of
the old Armour plant site in South St. Paul. On January 23, 1987, the Board
published a Notice of Opportunity for hearing in its weekly calendar, and sent
notice thereof to Petitioner's counsel, United Stockyards Corporation.
Ronald F. Mattson, Van Hoven Company, Inc , Kassan Realty and the City of
South St. Paul. On February 23, 1987, cournsel for the Objectors intiled
letter of objection on behalf of his clients to the Board, This hearing
process followed.
2. The trackage in question runs in a general south to north direction
(rom a main switching point, or turnout, located several hundred feet
southwest of the old Armour plant. At the turnout, the line splits into three
main segments which run parallel to each other through the plant site. The
easternmost segment (that closest to the Mississippi River, which runs in a
north-south direction at that point) has several shorter spurs running off it,
which spurs extend approximately half the length of the plant site, forming a
small railyard next to the river levee. The main track segments join several
hundred feet north of the plant site.
3. Just south of the north end of the old Armour plant site, the
easternmost (riverside) segment described in the previous Finding bends to the
west and joins the central segment. The central and western segments, which
are parallel to each other and approximately 200 feet apart as they run out of
the north side of the Armour site, join each other several hundred feet north
of the old plant. The track segments lying between the turnout (from which
the three track segments branch and lead into the plant) south of the plant
site, running north to the northern end of the plant site, form the subject
matter of this Petition. The trackage between the northern border of the
plant and the point where the segments converge again several hundred feet
north of the plant is not within the scope of this Petition.
4. On May 27, 1987, the Railroad filed a Petition with the Board for
authority to retire and remove the tracks between the northern border of the
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Armour- plant (United Avenue) and the northern junction described in the
previous Finding. See Letter of Objectors' Courise I to thE, Acimi n i str at i ve Law
Judge, filed June 2, 1987, That Petition is not imolved in this proceeding.
5, If this Petition is granted, railway access to the old Armour plant
site from the south will be removed, If the Petition of @'iay 2-;, 19o@7 is
granted, railway access to the site from the north will be removed.
c The 47-acre Armour plant site is unique. (ying directly east of the
stock.ards at South St, Paul, the plant served for seven& decades as a giant
mpat p:Dcessing and shipping facility, A huge building COTpleX Was erected on
t7e site, which f@7i lities still stand. The o Id p Iapt cons i sts of Dne I at-gel-
building and seve sl smaller ones, which served as nrehouse, loading dock
L-P; ;-' ;dminisv:stive offices supplementary to the Slaughterhouse and
rencering operations, The total work floor space on the site is over two
million square feet. The buildings are constructed of steel-reinforced brick
and are so solidly built that they cannot be knocked down with a wrecking
ball, This meat packing facility was finally closed by Ai-m@our- @r) 1979,
Ctjector Kassan Realty bought the site in June, 1980 and has rc-niit)ed it
"Armour Place".
7@ The Armour Place site has excellent road anci wat(-,@ (.Mississippi
River) access.
8. United Stockyards, Inc. owns the land through which the three main
branche s pass from the s outher n turnout to the southern, end of pi ant
site. United desires to sell this land, which is pr-psently va(-ari4c, for future
ievelopment (probably as a truck terminal), United would be able to undertake
such a transaction if this Petition is granted and the Railroad then sells its
right-of-way to United. The Railroad will not be able to sell the right-of-
way if this Petition in not granted. United "pports a grao ing of the
PC ti ti on.
9. The Van Hoven Company, a recycler of animal by-products, operates a
plant near the Mississippi River south of the Armour si-.e. Van Hcjven supports
a , crting of the Petition because a removal of the tracks will grant it
unfettered access (along a private road running north of the southern turnout
creating the three main branches of track) to Hardman Avenue, the north-south
thoroughfare running in front of the old Armour plant. If the Petition is not
granted, Van Hoven's access road to Hardman would continue to cross the three
tracks.
10. The F@'7simmons Company has for many years been engaged in the
material handling ujs'ness, with its principal business involving the removal
and salvaging of damaged rail freight previously involved in derailments or
any other event which caused damage to freight cars and 4ding. Fitz" qnons
has been engaged in Recovering such bulk commodities as coal, grain, steel and
7aTbL , 1 @ sok- Kandles significant volumes of such recovered
fretglt. For this pl:pose, it recalres access to loading dock. and railroad
track facilities. The number of facilities available in the upper Midwest
area is shrinking, and the Armour plant facility is one of the last eligible
locations available to Fitzsimmons. The Armour facility is attractive to
Fitzsimmons because it is a secured facility and because of its excellent
loading docks. This Objector has entered into a lease agreement with Lenmark
Development and Kassan Realty Company to utilize the r& I facil Aies in the
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@,,@mour plant for its operations. The South St. Paul area is more attractive
to Fitzsimmons as a site for its operations than its current facilities at
Montrose in Wright County, where Fitzsimmons is several blocks from a rail
line and has no loading dock. If the Petition is denied and the trackage is
;ograded, and Fitzsimmons moves to the South St. Paul location, it will
utilize the trackage to the extent of shipping 10 to 20 railway carloads per
month .
11. R. Haz-Mat, Inc. is engaged in the recycling of hazardous m6terials
ond plans to establish an environmental recycling processing facility at the
Armour plant site for, among other things, the recycling of plastics and
crankcase oil. Such processing includes the shipment Inbound by rail of
plastic material for reprocessing and involves shipping out-bound by cail of
the ground, shredded or reprocessed plastic. Such movement also involves
in-bound used crankcase oil and the movement out-bound of reprocessed motor
-11, Railway access is essential to this Objector's proposed operations,
P, Haz-Mat plans to deploy 21 techniques and methodologies for recycling
various materials at the Armour site. It would utilize different portions of
the old facility for its various operations. The efficient operation of these
clanned facilities depends, in part, on the continued maintenance of rail
ivackage into and adjacent to the plant site. In addition to the materials
mentioned above, the recycling operations would involve: the recovery of
silver from x-ray and photographic fixture solutions; recovery of copper from
printed circuit etchants; rubber tire recycling; recovery of industrial
solvents; biological degradation of organic waste coimpc)u,-,ds@ b,@olog-icdi
augmentation of waste effluents with bacteria; neutralization and
detoxification of industrial hazardous and toxic wastes; recovery of
semi-precious metals from printed circuit boards; recycling of aluminum from
beverage containers and vehicle transmissions; tk recya ing of glans from
'ion-returndble" beverage bottles; and the recovery of mercury from industrial
instrumentation, See Letter to Board from Objectors' Qounsel dated
Pebruary 23 , 1 987 and PrcDtes tan ts ' Exti i bi t 1 8 .
12. R. Haz-Mat's planned utilization of the Armour plant site has been
presented to the South St. Paul City Planning Board by its consultant, Melvin
Davis of Chemical Consultant Formulators, Inc. Mr. Davis foresees the
recycling operations as being completely self-contained on the Armour site,
wito no waste disposal contemplated at that location. If the recycling
facility is fully developed, it will employ approximately 1500 people and
operate 24 hours per day. The facility will utilize the Railroad trackage to
the extent of approximately teri carloads per dakv.
13@ Both Fitzsimmons and R, Haz-Mat oppose the granting of this
Petition. The Petition is also opposed by Michael Kassan, the South St. Paul
realtor who owns the Armour plant site. Mr. Kassan plans to pay for an
Upgrading of the tracks in question (see subsequent Findings) and, thereafter.
to sell the site to Lenmark Development Company, which will convert the old
plant facility into the recycling center envisioned by R, liaz--Mat.
14. Not all of the 24,775 feet of track involved in this Petition is
still in place. Substantial amounts of trackage have been removed from the
area within the "Armour Place" site (see P,pplicant's Exhibit 2).
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15. It would cost the Railroad $17,543 to upgrade each existing turnout
involved in this Petition to the level of "Class One" track (100-pound rail,
ten mile per hour speed limit). See Applicant's Exhibit 13 and Bench
F x h i b i t 1 7 .
16. The cost to the Railroad to construct each 100 feet of track meeting
the "Class One" standard is $7,234. None of the existing trackage in the area
covered by the Petition is up to that standard SE-e Applicant'; Exhibit 14
!!, The cost of constructing each new turnout, at Iccation@ where all
trackage h@n br: iemn4td, is S31,574. See Appl''tcant's Exhibit 15.
18@ The annual maintenance cost, including inspection, engineering and
supplies for the track involved in this Petition is (historically, for recent
years in which maintenance was done) between $8,000 and $8,500. The Railroad
incurred no maintenance costs on these tracks in 1986, If new -@ackage
meeting "Class One" standards is installed, maintenance costs should be
minimal in the years immediately following installation. See- Applicant's
E x h i b i t l 6 .
Based upon , he above F 1 ndi ngs of F a c t , the Admi n istr- at i ve Lavi Judge makes
the following:
CONCLUSIONS
I The subject matter of the Petition is w@th@,i,,. the .-jl ti r i d i ,- t- i @!,i of t he
Minnesota Transportation Regulation Board and the mattet is properly before
the Administrative Law Judge pursuant to adequate notice. All procedural
Requirements of law or rule have been fulfilled.
2, Public convenience and necessity would be adversely affected by the
retirement and removal of the 24,775 feet of track or and immediately south of
the "Amour PI ace" in SouO St. Pau I.
THIS REPORT IS NOT AN ORDER AND NO AUTHORITY IS GRANTED HEREIN. THE
TRANSPORTATION REGULATION BOARD WILL ISSUE THE ORDER OF AUTHORITY WHICH MAY
ADOPT OR DIFFER FROM THE FOLLOWING RECOMMENDATIONS.
Based upon the foregoing Conclusions, it is the recommendation of the
Administrative Law Judge to the Board that it issue the following
ORDER
IT IS HEREBY ORDERED that the Petition of the Chicago and North Western
Transportation Company for authority to retire and remove 24,775 feet of ICC
trackage, ir:luting 26 turnouts, located on and south of the former Armour
Comp&nl plant in South St. Paul, Minnesota be and nereby is DENIED.
Dated this /'-- day of July, 1987,
RICHARD C. LUIS
Administrative Law Judge
NOTICE
Pursuant to Minn. Stat. 14.62, subd. 1, the agency is required to serve
its final decision upon each party and the Administrative Law Judge by first
c I ass ma i I .
Reported: Taped, No Transcript.
MEMORANDUM
While it is true that the C&NW's tracks have had no traffic since Armour
shut down operations at its plant in 1979, and the tracks have therefore
yielded no revenues and have drained the Railroad's resources since then, the
record shows that it would be imprudent to remove the tracks at this time.
The record establishes that Mr. Kassan and the other Objectors are willing
to stand the cost of upgrading the tracks If that is done, and the rest of
the obstacles are cleared to allow development of the recycling operations,
the presently-abandoned site could again become viable. The Objectors, who
have a vision for development that could rejuvenate this huge, unique
facility, should be allowed the opportunity to proceed, especially since they
are willing to pay for upgrading of the tracks.
The Railroad would "lose" a potential $36,000 (the price United Stockyards
is willing to pay for the three track segments in the area south of Armour
Place) if it is not allowed to retire and remove the trackage involved in this
Petition. That loss seems small when compared against the potential loss of a
multi-million dollar development that depends on the continued provision of
rail access.
Minn. Stat. 219.681 and 219.741 grant to the Board the power to
authorize retirement and removal of railroad trackage, but do not spell out a
standard for making such a decision. The Objectors argue that the standard
should be that established in the predecessor statute, which was repealed in
1945, which provided that tracks could not be abandoned or closed for traffic
unless the facts established that the proposed action would not result in
substantial injury to the public". The Administrative Law Judge cannot agree.
As argued in the Petitioners' brief, the 1945 legislation repealed the
precedecessor statute of Minn. Stat. 219.681 and 219.741 and passed
legislation that superseded the old act. See State v._Chicaqo Great Western
Rv Co., 25 N.W.2d 294 (1946). A balancing test, best defined as a
consideration of whether the "public convenience and necessity" will permit
abandonment of the trackage, is a standard that has been utilized by the Board
in past decisions and should continue as a basis for analysis in this case.
In determining what considerations weigh on deciding the public
convenience and necessity, the application of a "balancing test" measuring
factors such as the financial burden to the Railroad, the future use of the
track by shippers (with resulting revenues to the Railroad), the general
geographic situation relating to the line of trac age and other adequate,
available means of transportation and access to the shippers' markets is
appropriate. See Minneapolis and St. Paul Suburban Railroad_Company v.
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village of Birchwood, 244 N.W. 57, 58 (1932) and Cartersville Elevator
I CC, 724 F.2d 668 , 670-7 1 ( 8th Ci r 1 984 ) The administrative Law
Judge has attempted to apply such a test in arriving at his Recommendation,
The potential "loss" to the Railroad in not being able to sell its
right-of-way to United is balanced, over the long run, by the potential
revenues from the steady flow of rail traffic into the site generated by
Fitzsimmons and the recycling center. In addition, the Objectors are waiting
to defray all present rail upgrading costs in connection with their
development. The development of the plant site depends on the Railroad
tracks' staying where they are. Mr . Davi s ' s testimony on behalf of the
developers to the effect that the proposed recycling center will not be able
to operate without rail access is credible and unrebutted Although the
proposed development may no; work out for a variety of reasons unrelated to
the Board's decision and outside the scope of its jua sdiction (a great
variet of environmental permits from several agencies at different levels of
government would be required, for instance), it is evident that a granting of
the Petition at this time will immediately block a promising venture that
could rejuve ste the local economy and benefit the Railroad as well. if the
future shows tnere is no further need for rail service, the Railroad can
Petition again Such drastic action as retirement and removal of the tracks
should not be taken until the future development potential of the Armour Place
state comes into clearer focus
R C . L
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