The commercial real estate industry and the state of Massachusetts are trying to sort out the legal confusion surrounding long-abandoned railroad properties strewn across the state and hampering some developments.
No one is questioning the state’s authority to maintain the right to one day reclaim abandoned track corridors, where mostly private rail cars once chugged along, hauling both people and cargoes across the region. The state may one day want to resurrect some rail corridors for future commuter-line use or bicycle paths, industry officials say.
But dotted across the landscape are also an unknown number of old and abandoned industrial rail spurs, depot lots and even entire rail yards, some dating back to the spectacular collapse of the once mighty Penn Central train company in the early 1970s, and even to the 19th century. There are abandoned “wood lots” where railroad companies once piled chopped logs that were used to fuel train steam engines in the 1800s.
Officials say those are the properties – and not necessarily each and every rail corridor where actual tracks used to lie, or still lie, in some cases – that are hindering development.
Under a state law passed in 1973 after Penn Central declared bankruptcy, the state reserves the right to review and approve any development of former railroad properties, not just former Penn Central track corridors. The process currently entails extensive title searches and hearings to review development plans.
“It’s a really arduous and time-consuming process and problem,” said Edward Smith, an attorney and lobbyist for the Real Estate Bar Association.
The process can take months, if not longer, to legally settle land-use issues. Commercial lenders and title insurance companies are often hesitant to get involved in development deals that may be complicated by disputes over former railroad properties.
Paula M. Devereaux, an attorney at Rubin & Rudman LLP, said she once had an industrial property owner as a client who wanted to expand a facility over what used to be a private rail spur that came onto the company’s property. The private spur was once used to redirect individual cargo train cars from regular tracks to make deliveries to the site.
But it wasn’t clear whether the spur was covered by the state’s railroad-land law, complicating the client’s development project, said Devereaux.
Sometimes track spurs are only a couple of hundred feet long, but other times they can be hundreds of yards or even a few miles long, officials say.
Other development plans – mostly commercial developments, though sometimes residential projects as well – have been caught up in the land-use confusion.
The problem, legal experts agree, is the original wording of Chapter 40, Section 54A. The statute acts to protect “right of way” corridors, but the law also refers to “appurtenant” railroad land. Over the years, different gubernatorial administrations have had different interpretations of what “appurtenant” means – whether it means just the track right of ways, or adjacent land, or all railroad-related properties, from spurs to abandoned railroad depots.
“It ended up becoming a moving target because you didn’t know from case to case how the state would rule,” said Smith of land-use disputes.
Beacon Hill Looks At Issue
This past legislative session, NAIOP Massachusetts jumped into the fray and helped craft a compromise bill eventually sponsored by Rep. Joseph Wagner, D-Chicopee. Wagner could not be reached for comment.
Tamara Small, senior vice president of government affairs at NAIOP, said all parties involved in the issue, including the Massachusetts Department of Transportation, were determined to clarify the law, but there wasn’t enough time to get the compromise bill passed this past legislative session. Supporters expect to re-file the bill next year.
Basically, HB 3168 would have eliminated the use of the confusing “appurtenant” reference and spelled out what properties could be potentially developed, including former spur tracks.
Among other things, the bill also would allow the Department of Transportation secretary to personally review and approve any development deal on railroad properties abandoned before January 1960, rather than requiring a full-scale department review and public hearings.
But railroad properties abandoned since January 1960 – including the critical railroad corridors that were formerly owned by Penn Central, which also owned the former New York-New Haven-Hartford Rail Road Co. – would still be subject to full state reviews and public hearings, according to the draft compromise bill.
In a statement, MassDOT said this past spring’s legislative negotiations were “positive” and the agency indicated it hoped the compromise bill can be re-filed as soon as possible.
Jay Fitzgerald may be reached at jayfitzmedia@gmail.com.
