Daily passenger rail service between Midwest City and Sapulpa could come as early as this fall under a $75 million sale approved unanimously Monday by the Oklahoma Transportation Commission.
Dedicated shuttle service would enable passengers to get from the ends of the line to locations in and around Oklahoma City and Tulsa, according to the proposal submitted by purchaser Stillwater Central Railroad, LLC.
Company officials said they hope eventually to reach agreements with other railroad companies that would allow railroad passengers to travel by train all the way from downtown Tulsa to downtown Oklahoma City.
Intermediate stops are planned for Bristow and Stroud.
The deal is expected to close in July.
“We believe in Oklahoma customers,” said Richard Webb, chief executive officer of Stillwater Central, which is buying the Sooner Subdivision railroad line from the state. “We are proud to be a part of the Oklahoma economy.”
The company has been operating the 97.5-mile line under a lease agreement with the state since 1998. Webb said the company started out with virtually no railroad cars on the line in 1998 and has built freight business to the point it expects to have 30,000 railroad cars travel the line in 2015.
Stillwater Central, in cooperation with the Iowa Pacific Holdings railroad company, experimented by running three passenger excursion trains on the line in February and “all three trains sold out within 10 days,” company officials said.
The company said it does not plan to ask for a government subsidy to provide passenger service.
The $75 million the state receives from the sale will go into the Railroad Maintenance Revolving Fund where it will be used for such things as maintaining and improving state-owned railroad lines and railroad crossings, said Mike Patterson, executive director of the Oklahoma Transportation Department. Some of the money also could be used to purchase other railroad lines if private companies go bankrupt or decide to abandon lines, he said.
While the anticipated return of daily passenger service between Oklahoma City and Tulsa after a 40-year absence is attracting much of the attention, Stillwater Central’s plans to expand freight service for the energy industry and other businesses is generating excitement, as well.
Stillwater Central’s proposal calls for spending $101 million for a Cushing rail spur that should expand the ability to ship crude oil in and out of that energy hub.
“We believe in the energy sector in Oklahoma,” he said. “And it’s not just on the Sooner Sub. There are also opportunities in Western Oklahoma, as well. One of the fastest growing parts of our business is the terminal side of our business.... We see tremendous opportunity into and out of Cushing.”
Stillwater Central said it is planning other infrastructure improvements to assist the expansion of such companies as T&J Marketing, a Chandler propane company; Mid-Way Environmental Services, a company that is developing injection wells in Davenport; and Timco Blasting and Coatings, a Stroud company interested in increasing the volume of hydrochloric acid it is moving, as well as bringing in additional sand used for developing oil and gas wells.
While a series of train wrecks across the country involving railroad cars carrying crude oil have caused public concern, Webb said railroads continue to be “one of the safest ways to move hazardous commodities in the country.”
The line Stillwater Central is purchasing currently is rated as a Class 2 line, which means railroad cars carrying freight have a speed limit of 25 miles per hour and cars carrying passengers have a speed limit of 30 miles per hour.
The sales agreement requires Stillwater Central to improve the track to Class 3 status within seven years, which would allow freight trains to travel up to 40 miles per hour and passenger trains up to 60 miles per hour.
The sales agreement also requires Stillwater Central to establish a six-month trial run of daily passenger rail service on the line within the next five years. The company is free to establish its own schedule and ticket costs and to decide whether to continue the program at the end of the trial period.
The company would be required to pay the state $2.8 million if it fails to start the pilot passenger service program within 5 years. It also would be required to give a passenger rail easement back to the Transportation Department if it is not operating passenger rail service after 10 years.
In its proposal to the state, Stillwater Central said that during the trial phase it plans to provide passenger rail service seven days a week, providing at least two round trips daily between Sapulpa and Midwest City.
After evaluating the results of the trial, the company said it reserves the right “to run as little as zero trains per day to as many as eight trains per day.”
A selection committee consisting of five of Gov. Mary Fallin’s cabinet secretaries recommended the Stillwater Central proposal to the Oklahoma Transportation Commission after comparing it to one other qualifying proposal that was submitted by BNSF Railway Co.
BNSF offered the state $25 million for the property, which was $50 million less than the winning proposal, and also was proposing to spend much less on infrastructure improvements.
State Rep. Richard Morrissette, D-Oklahoma City, tried to persuade the Transportation Commission to reject both proposals, arguing that the state had a valuable asset that would only increase in value.
“I have yet to speak to a single member of the House of Representatives that believes that the sale of this line is in the best interest of the people of Oklahoma,” Morrissette said. “I truly believe ... the people of Oklahoma do not want this line sold.”
However, state Rep. Jason Smalley, R-Stroud, issued a news release praising the decision to sell the property to Stillwater Central shortly after the decision was made.
“I am excited about this opportunity for the residents of Stroud as it will continue to add to the growth and stability for our city that we have seen over the last few years,” said Smalley, whose district includes Lincoln County and a portion of Logan County. “The Stillwater Central Railroad is a proven partner with the state and has worked hand in hand to help grow Stroud by attracting new businesses and jobs to our area.”