Luzerne County Authority Moves to Sell Rail Line Amid Legal Disputes

The Luzerne County Redevelopment Authority voted on October 3, 2023, to initiate the process of soliciting purchase proposals for its rail line, known as the Luzerne & Susquehanna Line. This decision comes amidst ongoing litigation involving a significant debt owed to the county. Authority Chairman Scott Linde expressed hopes that the authority would publish a “fair and open” Request for Proposals (RFP) by Thanksgiving 2023.

The Luzerne & Susquehanna Line spans approximately 60 miles through areas including Pittston, Wilkes-Barre, and Hanover Township. This rail line has become a focal point of contention between the authority and the county government. At its next meeting in November, the authority may enlist consultants to assist in determining the line’s valuation, which is intended to provide a less formal estimate than a full appraisal.

In July 2023, the county filed a lawsuit against the authority and its subsidiary, the Luzerne County Rail Corp., over an outstanding debt of $3.3 million. This debt stems from loans used to purchase the rail line after service was abruptly discontinued by the Pocono Northeast Railroad in 1996. The Rail Corp. was established to manage the rail line’s operations, and since 2020, the R.J. Corman Railroad Group LLC has been responsible for commercial freight operations on the line.

Despite the authority’s plans to seek new proposals for rail operations, it has extended its contract with R.J. Corman through October 2026. This decision comes as the Reading Blue Mountain & Northern Railroad has proposed a $10 million offer to purchase the rail line, which includes plans for passenger rail service for excursions from Wilkes-Barre to Jim Thorpe.

The legal entanglement escalated when the county requested a court order to appoint a neutral third party to oversee the rail line’s management. This request also aims to prevent the authority from selling or leasing the rail line during the ongoing litigation. According to a letter dated May 15, the county’s intention is to “take possession of the Luzerne County Rail Corp.” and subsequently sell it to address the debt.

In response, the authority and Rail Corp. maintain that the loan agreement with the county was not violated, as no property has been sold without county approval. They assert that the authority has until October 2026 to repay the county, with a trial scheduled to commence in August 2024. The county council, which appoints the members of the redevelopment authority, approved the litigation against the authority earlier in May.

As the situation develops, the outcome of the proposed sale and the ongoing legal disputes will significantly impact the future of the Luzerne & Susquehanna Line and its management.