“The Cincinnati Southern Railway has proven to be the City’s greatest money maker...

...Its return on investment, dollar for dollar, is unmatched.” This is one of the concluding lines from a 1977 report on the importance of the CSR to Cincinnati. The report continues by saying that “Cincinnati’s citizens should be glad that voters in 1896 rejected the idea of selling the Cincinnati Southern…the railroad has returned its cost several times over in cash renewals. It is and will continue to be the source of a large and steady income for the city.”

This conclusion is no less true today. While the unelected CSR board and Norfolk Southern would have you believe the sale will yield much higher annual income, this is a smoke and mirrors game. The city is claiming that by investing the funds from the sale, the people of Cincinnati will earn $50-70 million per year rather than $25 million under the current lease.

This is an intentional misrepresentation. The last offer Norfolk Southern made was for a new lease starting at $37.3 million but that number is only $12.3 million less than sale income, so the city ignores it. And it is clear they are lowballing the city to force them to sell rather than lease. If the city held out, it is clear that Norfolk Southern would have to pay the full $65 million. The city claims otherwise due to “risks related to arbitration,” but this is also a falsehood that I will address later.

The proponents of the sale claim that the investment fund will be “professionally managed.”

The data clearly show that more than 90 percent of professional money managers underperform the market in the long term. Not only that, these Wall Street bankers will take a cut of the money that belongs to the people of Cincinnati for the privilege of doing so.

And if the fund does end up losing value, a recession could hit anytime, then the city receives zip. Nada. Nothing. No income is allowed to be spent until the “market recovers.”

With continued public ownership under a stronger lease, the City’s income stream is guaranteed, under all economic conditions. Rather than income that fluctuates with the stock market, a new lease would have increases that keep pace with inflation. A big number may sound nice, but when a private corporation is eager to pay it, usually you are the one being swindled.

What about the City’s claim that arbitration means we have to bend to Norfolk Southern’s will?

The city claims it won’t get a favorable ruling during arbitration, so it’s impossible to stick it out for a higher lease. This claim is easily dispensed with if you so much as glance at the renewal terms of the current lease from 1987. Arbitration is enforced when the city and Norfolk Southern can’t agree, but, the arbitrator’s word is not final. And the city has infinitely more leverage than Norfolk Southern in these negotiations.

If the city doesn’t like the price the arbitrator decides on, it may reject the deal, leaving a full year to find another lessee for the railroad that will pay a higher price. The city could even return to running the railroad itself. While it is true that CSX has a parallel line, which makes it unlikely to bid, the chance to lock out NS or drive up the price could be well worth starting a bidding war (NS has right of first refusal and no good alternative routing for the fifty trains per day that use the line).

Other bidders might also enter the fray, including Genessee and Wyoming (G&W), which owns more than 100 railroads across the US including the Ohio Central, Chicago Ft. Wayne and Eastern, Central Railroad of Indiana, and the Indiana and Ohio Railway. The Cincinnati Southern would connect with several of these railroads in Cinninnati, bringing increased traffic and geographic range to G&W. The city could even open up the Cincinnati Southern to multiple companies, each paying for trackage rights, bringing greater revenue and rail service to the city and neighboring communities.

The notion that selling to Norfolk Southern is the only option is clearly a deceptive move. The city wants people to believe this is true so that they don’t realize that it is simply another bad deal to get rid of a wonderful piece of infrastructure that makes the Queen City truly unique.

What do we gain from keeping the Cincinnati Southern public?

There are many benefits to keeping the CSR public. For one, it gives greater control over the railroad to the city and its people. While the city cannot regulate the railroad as a municipal government, as the owner and lessor of the railroad, it can negotiate clauses in the contract to effectively exert control over the line.

One of the most important reasons to keep the railroad public is the return of passenger rail on the route, which could be a boon to the local economy and create hundreds of new jobs. As the public owner of the line, Cincinnati could declare its right to run passenger trains over the tracks, through to Lexington and Chattanooga – exactly like Georgia did with its lease of the Western & Atlantic to CSX. Negotiating trackage rights with private railroads is a painful process that can only be avoided by maintaining public ownership of the line.

The more stable income and passenger train potential alone should be reason to keep the railroad in public hands, but there is also an aspect of city pride that should factor in. The Cincinnati Southern Railroad is the only municipally owned main line in the United States. While many are familiar with Glenn Miller’s Chattanooga Choo Choo, the original Chattanooga Choo Choo was the Cincinnati Southern’s passenger train to that very city.