QUEENSBURY — Warren County has sued the company that formerly ran a railroad on the county-owned rail line for unpaid revenue, a lawsuit that also names the town of Corinth as a defendant.
The county filed sued in state Supreme Court last week, naming Saratoga & North Creek Railway; its parent company, Iowa Pacific Holdings of Chicago; and several subsidiaries of Iowa Pacific. It alleges the companies breached a contract with Warren County and seeks $110,287 in unpaid revenue and tax bills that the county claims the railway incurred in 2017-2018, before pulling the plug on its operation.
The rail company also contracted with the town of Corinth, which owns the stretch of rail lines south of Warren County’s rails.
The lawsuit also names the town of Corinth as a defendant, but Warren County Attorney Mary Kissane said the county is not seeking damages from the town. Corinth is considered a “necessary party” to the action, because of its contract with the railroad company. Warren County officials advised Corinth leaders of the litigation, but the town chose not to take part in the lawsuit as a plaintiff, she explained.
The lawsuit comes months after the railway halted its local excursion and limited freight train operations on the line that runs between North Creek and Saratoga Springs. Warren County owns about 40 miles of the line from Hadley to North Creek, and Corinth the remaining 16 miles or so in Corinth and Greenfield.
Saratoga & North Creek Railway shut down amid financial problems and a major controversy over its decision to store tanker cars on the contiguous section of line the company owns north of North Creek, which runs between North Creek and the stone mines in the hamlet of Tahawus, Essex County. State officials and environmental groups zealously protested the tank car storage on the section of rails that crosses the state forest preserve, and the company removed the cars last spring before pulling all of its equipment off the local lines.
Iowa Pacific is trying to sell the stretch of rails it owns. It has been negotiating with OmniTrax of Colorado amid a state effort to have that section of rails declared “abandoned” because of a lack of railroad activity. The state has agreed to temporarily halt the abandonment process while the sale is negotiated.
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Saratoga & North Creek Railway had contracted with Warren County and Corinth since 2011, with guaranteed annual revenues from the company to Warren County of $81,958 stipulated in the contract. The railway paid only $5,879 of the revenue due for the contract year that ran from July 1, 2017 to June 30, 2018, the lawsuit alleges.
“SNCR made a clear and unambiguous promise to pay the county for the right and ability to operate the railroad,” Warren County Attorney Mary Kissane wrote in the lawsuit. “SNCR did not fully compensate the county for the benefit it received by operating the railroad.”
Iowa Pacific’s chief operating officer, Ed Ellis, did not respond to a request for comment Wednesday. Corinth Supervisor Richard Lucia could not be reached Wednesday.
No court dates had been set as of Tuesday.
SNCR has also been sued by Revolution Rail Co., a “rail bike” company that used the northern stretch of line for pedal-powered excursions on the tracks the last two summers. The company abruptly canceled Revolution Rail Co.’s 2019 contract last fall, claiming there were issues with insurance coverage.
The lawsuit seeks to have a declaration that Revolution Rail complied with its end of the contract and “is the holder of a valid and subsisting license” to use the rail line, which is known as the Tahawus Line or Sanford Lake Branch.
Revolution Rail Co. co-founder Michael Dupee said the lawsuit was still pending, and the company is planning to operate on the line again starting in May.