By John Howell
Originally published in The Panolian on November 24, 2015
A notice of rail abandonment filed in 2011 by Grenada Railway, LLC with the U. S. Surface Transportation Board (STB) pushed to fruition the creation of the North Central Mississippi Rail Road Authority (NCMRRA).
Calling for the abandonment of the portion of track between Grenada and Canton the STB notice caught the attention of Chicago rail entrepreneur Ed Ellis.
Iowa Pacific president’s Grenada connections
“(It’s) one of the things that we do,” the Iowa Pacific Holdings president said Friday, speaking to the Senatobia Rotary Club. “We watch the web site of the Surface Transportation Board because we’re interested in what railroads might come on the market.”
By the time Ellis founded Iowa Pacific in 2001, he had already compiled a distinguished rail industry résumé that began when he worked as an Illinois Central brakeman, switchman and engine foreman from 1973-1975 while he was pursuing a transportation degree at the University of Tennessee. After his 1976 graduation, Ellis quickly ascended into administrative positions for a succession of rail roads including Chicago and Northwestern, Chicago West Pullman Transportation, and RailTex before becoming Amtrak’s Vice President for Mail and Express in 1996.
“His responsibility was to grow Amtrak’s mail and express traffic business,” Tate County Economic Development Foundation Executive Director Tim Climer said during his introduction of Ellis. “During his five years with Amtrak, their revenue grew from $44 million to over $120 million.”
Ellis left Amtrak and founded Iowa Pacific “to acquire railroads and create rail-related businesses,” the Iowa Pacific web site states, focusing on “smaller feeder railroads (‘shortlines’) with annual revenues of $10 million or less.”
But the Grenada Railroad was more than a fit for Iowa Pacific’s business model.
“I knew what that line was, and I was really disappointed,” Ellis said, describing his reaction on reading about Grenada Railway’s proposed abandonment.
Ellis had spent the summers of his youth visiting his grandparents in Grenada riding the passenger trains of the Illinois Central from his home in Paducah, Ky. to Grenada and back.
“It was a small town, but it was a great place to learn about railroads,” he said.
‘Shouldn’t be abandoned,’ Ellis told rail authority
Iowa Pacific filed with the STB as a party interested in the abandonment proceedings, Ellis said, and was contacted by the NCMRRA.
“My message to the community was, ‘this railroad shouldn’t be abandoned,’” Ellis continued, recalling his initial contact almost three years ago with the Authority and its point men, Mayor Larry Hart of Water Valley and Grenada County Economic Development Authority Director Pablo Diaz.
“The U.S. has the premier rail freight system in the world,” the IP president said. “It’s better than any other rail freight system. One of things that makes industrial development possible in small communities like Senatobia is being connected to a national network where thousands of tons can speed across the country without ever hitting a highway.”
In spite of the large volume of freight that shifted to truck transportation with the completion of the interstate highway system, “we’re handing more tonnage now than at the height of World War II, Ellis said.
“A lot of the industries … have figured out that putting four truckloads of anything in a boxcar and moving it down the railroad costs about half as much as it costs by truck,” he continued.
Connects with five major railroads in Memphis
The Grenada Railway connects with five major railroads in Memphis and, when the portion of the rail line between Grenada and Canton is reopened, it will connect with CN there.
“That’s a phenomenal situation for someone who wants to locate an industry in Senatobia, Mississippi because they can ship something from the east coast, the west coast, Canada or Mexico and do it all on one railroad to Memphis without having to pay extra fees because they’re switching from railroad to railroad,” Ellis said.
“It was the right thing to form a rail authority here in Mississippi; it was the right thing to ask your leaders to work to save this railroad and it was the right thing to have your legislature to appropriate bond money to keep the railroad from being torn up, but that was just the beginning,” he said.
Financing purchase and rail rehab
In 2014, the Mississippi Legislature authorized $30 million in bonds to allow the Authority to purchase the railroad from the salvage company that had purchased the 187-mile line from Canton to Southaven in 2009. The Mississippi Development Authority provided an additional $13 million to purchase the rail line.
Iowa Pacific has three immediate challenges, Ellis said: Increasing rail use by business and industry located along the Grenada Railway, reopening the rail line between Grenada and Canton and improving the rail bed and bridges along the entire route to allow its trains to travel faster.
There are approximately 160 bridges along the route. “Close to half of them need something done.”
“If I had $20 million, we could make a lot of improvements; if I had a $100 million, we could probably get it back to the way it was in 1965,” Ellis said, when it was rated for 80 miles-an-hour train speeds.
“We’re in the process of applying for a loan under a federal program called RRIF — Railroad Rehabilitation Improvement Financing,” he said. “It’s a low-interest, long-term loan program. They have enough money in the RRIF fund that we could fix the railroad up without any difficulty,” Ellis continued.
Ellis commended the cooperation from local, regional, state and national government and economic development officials whose efforts brought the rail authority to fruition and saved Grenada Railway from abandonment.
“This is an economic development project that affects thousands of other economic development projects,” he said.