Mayor Aftab, the Board of Trustees of the Cincinnati Southern Railway and Norfolk Southern Corporation (NYSE: NSC) announced the proposed sale of substantially all the assets of the Cincinnati Southern Railway (CSR) for $1.6 billion to Norfolk Southern Railway Company, an operating subsidiary of Norfolk Southern.  The railway line, currently operated by Norfolk Southern under a lease agreement, runs from Cincinnati to Chattanooga, TN and is owned by Board of Trustees of the Cincinnati Southern Railway for the benefit of the City of Cincinnati.

The closing of the sale is subject to approval by the voters of Cincinnati, regulatory clearance from the U.S. Surface Transportation Board, and passage of proposed state law changes. Importantly, the transaction would not represent any change in day-to-day rail operations, and traffic would not be expected to fluctuate to any significant degree.

“This is an historic opportunity to deliver great value to citizens of Cincinnati and realize a substantial return on the investment and foresight of our predecessors,” Mayor Aftab said. “We are fortunate that a number of events have brought us to this point and will provide for the transportation needs of our city for decades to come. This transaction marks a seminal moment for the City of Cincinnati, and I look forward to submitting it to voters for their approval.”

The Cincinnati Southern Railway Trustees have proposed placing the proceeds of the sale into an infrastructure trust—the Building Our Future Trust Fund. Investment returns from the trust will be transferred annually to the City of Cincinnati for funding the rehabilitation or modernization of existing infrastructure—such as our roads, bridges, parks, recreation facilities, and other infrastructure necessary for delivering core public services.

The construction of the Cincinnati Southern Railway was completed in 1880 and was the vision of state Sen. Edward A. Ferguson. The Cincinnati Southern Railway is governed by its Board of Trustees, which is comprised of five members, each serving a five-year term, who are appointed by the mayor and approved by Cincinnati City Council. While the line has been continuously owned by the CSR Trustees, since 1881 it has been operated under a lease agreement by The Cincinnati, New Orleans, and Texas Pacific Railway Company, today a subsidiary of Norfolk Southern. 

Chairman of the Cincinnati Southern Railway Board of Trustees, Paul Muething noted, “We trustees, and those who have served before us, have taken great care and pride in our stewardship of the Cincinnati Southern Railway over the years. This transaction gives us the ability to deliver transformative and perpetual value to the city and its citizens.”

“The Cincinnati Southern Railway plays a critical role in Norfolk Southern’s railroad operations and our nation’s supply chain infrastructure,” Norfolk Southern Senior Vice President and Chief Strategy Officer Mike McClellan said. “Through this sale, our customers and the nation’s economy will have certainty around future operations and the health of the railroad. We appreciate the efforts of Mayor Aftab and the Board of Trustees to reach a deal that provides long-term benefits to the citizens of Cincinnati and businesses of all sizes who rely on freight rail for base products and finished goods.”

 

About Cincinnati Southern Railway

An Ohio law enabling the creation of the Cincinnati Southern Railway was enacted on May 4, 1869. A resolution was adopted designating Chattanooga as the southern terminus one month later. The Cincinnati Southern Railway was intended to expand the economy of Cincinnati.

Construction of the railroad was a huge engineering task. The approximately 337-mile railroad was built through rugged terrain which included 27 tunnels and 105 bridges.

Understanding that it would be difficult for a city to run a railroad, it was decided that the line would be leased to a rail operator. In October 1881 a lease was awarded to the Cincinnati, New Orleans and Texas Pacific (CNO&TP) Railway. In 1893, the CNO&TP came under the control of the Southern Railway (and as a result of a merger, now Norfolk Southern).

Today, the City of Cincinnati receives approximately $25 million per year from Norfolk Southern for the lease.

The ownership of the Cincinnati Southern Railway makes Cincinnati the only municipality in the county to own an interstate railroad.

 

About Norfolk Southern

Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a customer-centric and operations-driven freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver more than 7 million carloads annually, from agriculture to consumer goods, and is the largest rail shipper of auto products and metals in North America. Norfolk Southern also has the most extensive intermodal network in the eastern U.S., serving a majority of the country’s population and manufacturing base, with connections to every major container port on the Atlantic coast as well as the Gulf of Mexico and Great Lakes. Learn more by visiting www.NorfolkSouthern.com.