Deal may be near for Santa Fe rail track: sources say agency is making progress in negotiations.

Southland commuter rail officials voiced "cautious optimism" last week that the U.S. government would side with them and speed their quest to buy hundreds of miles of track from Santa Fe Railway, despite the fact both sides remain $500 million apart on price and public relations' adversaries.

"We're making considerable progress with the federal government and expect to have our day in court," said rail authority lawyer Tony Zamora, an associate attorney with Los Angeles-based Riordan & McKinzie. "We've opened up a can of worms Santa Fe is not eager to face, in my opinion."

As part of a 410-mile commuter rail system expected to be moving passengers by 1995, the Southern California Regional Rail Authority has been trying to purchase 240 miles of rights-of-way and about 70 miles of access rights from Illinois-based Santa Fe. Those tracks criss-cross Los Angeles, Orange, San Bernardino and San Diego counties.

But with transit officials publicly offering $300 million and the railroad asking $800 million, the three-year-old negotiations have been deadlocked since September.

However, the two sides have been in contact recently and "may be ready to sit down and talk again," one knowledgeable source told the Business Journal last week.

Yet Neil Peterson, executive director of the Los Angeles County Transportation Commission, which is representing the five-county rail authority, said there have been "no changes whatsoever, though there is speculation Santa Fe may be getting a little more reasonable."

Santa Fe spokesperson Mike Martin said no talks are scheduled and doubted whether the rail authorities' federal requests would pan out because of jurisdictional questions about intrastate rights-of-way.

"If the SCRRA says they are making strides, they are (just) making noise," Martin said.

Nevertheless, in an effort to gain leverage transit officials have been seeking congressional sponsorship for legislation giving the U.S. Interstate Commerce Commission powers to step in and force negotiations and a sale within 60 to 120 days.

Potential Southland sponsors include U.S. representatives David Dreier, Henry Waxman, Jerry Lewis and Carlos Moorehead, a senior member of the House's Energy and Commerce Committee, sources said. The proposed bill will likely be introduced early next year when Congress reconvenes after the holidays.

On a related front last October, rail officials petitioned the ICC to gain access to a one-mile stretch of track owned by Santa Fe in Claremont for a Los Angeles-San Bernardino commuter line. Though the SCRRA already bought 56 miles of rights-of-way for that line from Southern Pacific Railroad, Santa Fe's cross-over track is still needed.

The ICC last week was slated to consider and set the procedural schedule for that petition under "terminal access provisions" in federal law, according to a source. The ICC, if it chooses, can grant local transit officials immediate access to the Claremont track or direct both sides to set a price within 135 days after the schedule is set.

"What's happened is that we made considerable progress with the ICC (on the Claremont track) and are expecting a favorable order," said Zamora. "We've been able to draw a direct relationship between what Santa Fe has been doing and our ability to provide commuter rail to millions of people in the region."

However, Santa Fe's Martin said the talks about the total rights-of-way package have been further muddied because of unexpected, "substantive" changes by local rail officials at their last meeting in downtown L.A.'s Security Pacific building.

According to Martin, the rail authority now wants to buy, instead of lease, Santa Fe's Los Angeles-San Bernardino rights-of-way and the 30.2 miles of track from southeast L.A. to Wilmington for $90 million. That would bring the total asking price to $450 million.

In addition, Martin said, the rail authority asked Santa Fe to divert the company's Southland freight traffic off its existing lines onto those purchased by from Union Pacific in Los Angeles and Riverside counties. The SCRRA plans on running one of its nine commuter rails on that track.

"If we diverted, what would happen to the hundreds of Santa Fe customers who are directly served by those cars," said Martin, estimating the railroad makes $1 billion annually from those shipments. "This is what they hit us with at the last session."

The price dispute between the two sides boils down to differing methods for valuing track. In defense of their $800 million offer, Santa Fe has argued for an "across the fence" valuation method, where land and real estate developments adjacent to rights-of-way are figured in.