Coastal rail link priced for sale.

Byline: Winston Ross The Register-Guard

FLORENCE - Federal officials announced Thursday a price for the purchase of a 111-mile railroad line linking Coquille and Eugene: $16,605,987.

That's a little more costly than the $15 million range that officials with the Oregon International Port of Coos Bay were hoping to pay, but it's also far less than the $25 million or so the reluctant seller, RailAmerica, wanted to earn for the line.

The port has until Dec. 1 to decide whether to accept the terms of the sale, according to the federal Surface Transportation Board.

"I know they have most of the money lined up," said Bob Ragon, executive director of Douglas Timber Operators. "But I don't think they have all of it yet. I think it's going to be a little bit of a scramble for them."

In a press release issued Thursday, the board noted that port officials testified that they had $19.5 million to purchase the line, including a $12.5 million loan commitment from Umpqua Bank and $7 million in cash. Earlier this month, the port's board of directors authorized Executive Director Jeffrey Bishop to purchase the line, dependent on the final value determined by the Surface Transportation Board.

Dave Kronsteiner, president of the Oregon International Port of Coos Bay commission, didn't return a message seeking comment.

If the port decides to accept the price, the deal must be closed by February, according to the transportation board press release.

"The shippers along this corridor are now one step closer to the resumption of much-needed rail service," said Charles Nottingham, chairman of the transportation board.

In its decision, the board denied a request from U.S. Rep. Peter DeFazio, D-Ore., for an extension on the Dec. 1 deadline. The Springfield Democrat asked for an additional 120 days to complete the sale, due to the downturn in credit markets.

Part of the money the port is counting on to buy the line is $8 million in federal funds that DeFazio redirected in a recent bill. But in an interview Thursday he said the bill is stalled in the Senate and won't pass by the year's end.

The Oregon Legislature, which may be called upon for more money than the $4 million the state has already committed, doesn't meet again until January.

"The place where we need flexibility now is timing," DeFazio said. "It's not an impossible sum, but the bill that was going to get them half the price is not going to pass the current Senate."

In its finding, the board decided that granting such an extension would prolong the amount of time that the shippers who rely on the line are without rail service, and noted that the port itself didn't request an extension.

Ragon said he's not surprised by the transportation board's decision, given the likelihood that RailAmerica would contest a lower price.

"If they would have come in too low, I think RailAmerica would have easily overturned it in an appeals court," Ragon said. "It looks to me like a fair price, that the way they went at it was reasonable. ... I wouldn't be surprised if RailAmerica appeals it anyway."

Scott Williams, an attorney for the company, said Thursday there's been "no thought" of appealing.

"We didn't get everything we asked for, clearly," Williams said, namely a higher price for the value of steel on the line. "But I think on balance, we're satisfied with and we thank the STB for conducting a fair and fact-based process and not getting too caught up in the politics of the matter."

Winston Ross can be reached at [phone].