Skunk Train Owner’s Acquisition Of Fort Bragg Mill Site Upends City Plans Amid Growing Conflict, Mistrust
by Mary Callahan
The owner of Fort Bragg’s iconic Skunk Train now owns nearly the entire west side of town after using its status as a federally recognized railroad to pursue the vacant Georgia-Pacific mill site through eminent domain.
The move has unleashed a fury in the Mendocino Coast community, with one Fort Bragg official calling it “a land grab.”
Whoever possesses the more-than-300-acre bluff-top property ― with its sweeping views of the rugged coastline and the ocean beyond ― in effect holds title to the city’s future. That means a single owner will now control the type and scale of new residential, business and tourist-oriented development in a community badly in need of renewal.
Officials with the Mendocino Railway, owner of the Skunk Train and the River Fox Train near Sacramento, said they’ve long bolstered the Fort Bragg economy and are ready to move forward with a unified plan for the roughly 375 acres it now holds.
The company has spent most of 20 years trying to acquire the property and working with the city and the public on a vision for the site, representatives said.
After the decline of the timber and fishing industries over recent decades, the city has taken too long on its own planning efforts for the lumber mill site, shuttered in 2002, said Skunk Train president Robert Pinoli.
“Let’s get on with doing something that’s productive,” he said.
But for city officials, the railway’s acquisition amounts to an end-run just as the city itself was close to a deal with Georgia-Pacific. That deal, they say, would have allowed for greater civic involvement as well as enhanced environmental oversight and greater public good.
“It is a land grab,” said Vice Mayor Jessica Morsell-Haye. “There’s no other name for it. They now own 20% of this damn town.”
The company plans to tie the land to expanded rail use in an area where the city envisioned expanded open space and inroads toward a new “blue economy” focused on ocean resources and resilience.
City officials argue a small out-and-back “excursion line” with no connection to the national rail system for the past two decades hardly warrants the standing of a public utility that should enable it to condemn property.
Georgia-Pacific initially fought the eminent domain in court, but agreed to a settlement that allows Pinoli’s company to acquire it at its appraised value of $1.23 million.
The city has filed a separate suit in Mendocino County Superior Court challenging the railway’s standing as “a common carrier” providing ‘transportation.” The suit seeks in the meantime to ensure the railway complies with city ordinances, codes and authorities.
Officials are worried about federal law that grants railway-related development immunity from state and local regulation ― an arrangement over which the city and the railway already have butted heads.
For instance, Pinoli said the railway’s plan to run the Skunk Train line out to popular Glass Beach and along a relatively new public coastal trail at the very edge of the mill site will not be subject to environmental review even though most coastal development undergoes an extra layer of oversight via the California Coastal Commission.
“That’s a problem,” Mayor Bernie Norvell said.
The railway also rejected several city efforts to enforce permit requirements on structural improvements on mill property it owned before the condemnation effort, raising additional concerns about the degree to which the railroad is prepared to abide by local standards.
But Pinoli said all work still is subject to building codes, even if it is exempt from a permit. He said anything except railway-related activities ― housing, commercial uses, a hotel ― would be subject to the planning and permitting process.
He also said the city had ample notice about his company’s interest in the site, which began in 2004, when Mendocino Railway first began talking to Georgia-Pacific about acquiring some of the site ― a year after it bought the Skunk Train out of bankruptcy and two years after the mill closed down and the city lost 2,000 solid jobs.
When the railway initially purchased 77 acres of the northern mill site in 2019, company officials noted the tie to historic uses of rail in the area. The company also bought 15 acres from Harvest Market, which had planned a store there but decided against it.
The railway’s most recent acquisition includes 210 acres from the main mill site and 62 acres running inland along Pudding Creek on the north. It paid $1.23 million for the land ― a steal it would seem ― though the railroad expects to spend almost three times that much for environmental remediation, Pinoli said.
(Santa Rosa Press Democrat)
FOR IMMEDIATE RELEASE
Mendocino Railway completes acquisition of former millsite from Georgia Pacific.
FORT BRAGG, CALIFORNIA, - (November 22, 2021) – The 136-year-old Mendocino Railway completed the acquisition from Georgia Pacific (GP) of its former millsite in Fort Bragg on November 19, 2021. While once employing 2,000 workers, the GP millsite has been shuttered for two decades. The successful reuse of the millsite would be a huge economic catalyst for the City of Fort Bragg and the North Coast.
This acquisition reunifies the railroad and millsite. Mike Hart, CEO of Sierra Railroad Company (Mendocino Railway’s parent company) stated, “The railroad and millsite successfully worked together for over a century. Unfortunately, they both fell on hard times after the railroad was sold off. The millsite closed in 2002 and the railroad went bankrupt in 2003.”
“For the past two decades, we’ve been trying to put the pieces back together,” added Hart. Mendocino Railway purchased the assets of the California Western Railroad out of bankruptcy in 2004 with the approval of the United States Surface Transportation Board.
“While the railroad suffered from neglect, we’ve spent years fixing it up and we now have record ridership. We’re now completing a federal loan that will enable us to address the last big obstacle: the reopening of Tunnel #1.
While Mendocino Railway was improving the railroad, it has also been in negotiations with GP to purchase the millsite. Hart said, “One of the first calls we made after getting the railroad was to GP to begin negotiations to purchase the millsite to restore the business as a single entity. While we were close to a deal for some time, I think GP wanted to first complete its environmental remediation of the site.”
While GP worked through their remediation, they provided the City with 85 acres of the millsite in 2009. In 2019 GP sold 15 acres to the Harvest Market, a local grocery store. GP then sold the 77-acre northern portion to Mendocino Railway in June 2019. Since Mendocino Railway had been working within the City’s planning process, Mendocino Railway was within months able to present the City with detailed plans for the reuse of the property, to very positive reviews.
One of the key features of the millsite is a 70,000 square foot historic “Dryshed” building. The city almost allowed this building to be demolished in 2018 but Mendocino Railway and local advocates helped save it. Mendocino is now rehabilitating the Dryshed and placing it back into service. Mendocino Railway will relocate its locomotive work to the Dryshed while rebuilding its historic Roundhouse. Once the locomotives can move back into the Roundhouse, Mendocino Railway will then begin work to repurpose the building, potentially as a community theater and marketplace.
The City’s Planning Process for reusing the millsite has had its setbacks. In 2019 the City let go of the Community Development Director who had led the process for 15+ years. In 2020 the Harvest Market canceled their development following concerns. In 2021 the city abandoned its own planning process and directed Mendocino Railway to submit its own master plan for review.
Despite these setbacks, Mendocino Railway pressed on. Mendocino first acquired Harvest Market’s 15-acre site. Mendocino is considering building a station at this site with a visitors’ center. Mendocino then worked with GP to acquire the balance of the millsite so it could complete a single master plan for the property as requested by the City, recently acquiring that property.
Mendocino Railway has taken on responsibility for completing the remediation of the millsite. Robert Pinoli, CEO of Mendocino Railway, stated, “Mendocino Railway has worked with the DTSC since 2004 when we acquired the railroad, and we look forward to continuing to work with the DTSC to ensure that remediation of the millsite is appropriately completed. We also look forward to working with the City of Fort Bragg, local partners, and our community at large to do our best to ensure that development of the former millsite meets our community’s needs. We also plan to work with the California Coastal Commission to ensure that the property’s final plans reflect the best interest of all parties.”
Hart concluded, “We believe that we are the only local organization that is both willing and able to take on this project. We hope that we succeed and are an asset to Fort Bragg and the North Coast.”
Mendocino Railway is the owner and operator of the historic Skunk Train and California Western Railroad and the provider of more than 50 local jobs. Mendocino Railway is a Class III common carrier railroad and is a wholly owned subsidiary of Sierra Railroad Company.
Robert Jason Pinoli, President, Mendocino Railway
(Mendocino Railway Presser)
FORT BRAGG OFFICIALS OBJECT to Skunk Acquisition of Mill Site
by Chris Calder
Fort Bragg City Council members squared off Monday night with managers and owners of Mendocino Railways, operator of the Skunk Train, over the railroad's recently announced acquisition by eminent domain of the remaining 270 acres the railroad did not already own of the town's oceanside former millsite.
The tense council meeting discussion — at which members voted unanimously to oppose a federal rail loan that Mendocino Railways has applied for to make track and tunnel repairs — followed an announcement last week that Georgia-Pacific had ceded the remainder of the millsite, vacant and on the market for the past 19 years, to Mendocino Railways after the railroad filed an eminent domain lawsuit for the land in October. The railroad has also claimed land along both banks of the Pudding Creek estuary. On Tuesday morning, the Skunk Train — which already owns the portion of the millsite north of Redwood Ave. — issued a news release on Facebook saying the transaction for the south end and Pudding Creek estuary had closed escrow and is final.
The news was greeted with frank dismay Monday by all five city council members, who had been negotiating the city's own purchase of the millsite's southern portion during closed session meetings with Georgia-Pacific over the past two years.
The city also filed suit in Mendocino County Superior Court earlier this month challenging the Skunk Train's status as a freight railroad. “Freight” status, as opposed to being considered an excursion train, gives the Skunk much broader land use powers, and losing that status could affect its ability to do things like acquire land via eminent domain or be exempt from local and state zoning laws.
Council member Tess Albin-Smith said the Skunk's recent moves make her wary.
“When you look at someone owning 20% of the town, it's like we now have another member at the council table,” said council member Albin-Smith. “It's like a takeover.”
Council member Lindy Peters said his opposition was based on years of community meetings about the millsite in which “I never heard anybody say, ‘Let's turn the whole thing into a train yard’.”
Mayor Bernie Norvell focused his opposition on reports that Mendocino Railways might be interested in operating on the now-closed North Coast Rail Authority line along the Eel River, possibly to transport gravel between Dos Rios and Fort Bragg. The NCRA line is the focus of an effort championed by State Senator Mike McGuire to create “The Great Redwood Trail,” a camping and hiking corridor along the Eel River. It has also drawn the attention of a group of Wyoming coal interests looking for a way to ship their product to the Far East, possibly using Northern California rail lines to do so.
Norvell cited a conversation he had with Skunk Train President Robert Pinoli in which he said Pinoli told him the Skunk would not be subject to any local regulations on its railroad operations, for why he was leery of the railroad's plans and opposing the federal rail loan.
Vice Mayor Jessica Morsell-Haye was frankly distrustful of the company: “It was working with them (Mendocino Railways) that has made me lose trust in them,” she said.
Morsell-Haye said she thinks the Skunk Train owning the property could end the possibility for public facilities like athletic fields, or a new hospital or college, on the millsite.
Railroad officials, who have unveiled a couple of plans for retail and housing development on the north end of the millsite in recent years but nothing detailed for the new chunk of land they now own, expressed bafflement Monday at city officials' stances, and frustration that the city would oppose any federal rail loan — which the city had supported on the railroad's last three tries — flowing to the community.
Mendocino Railway co-owner Mike Hart accused city government of secrecy and hostility toward the railroad over the closed session meetings the council has held to discuss a millsite purchase over the past couple of years, though the negotiations have been reported on in local media and were common knowledge.
“The city should stop hiding behind closed doors and shed some light on this,” Hart said.
Chris Hart, Mike Hart's brother and Mendocino Railways co-owner as well, said “You supported this (loan) for three years and now you're opposing it. This feels like retaliation.”
Skunk Train President Pinoli emphasized the rail line's economic importance for Fort Bragg's tourist economy — he estimated the rail line brings $12 million a year in spending to the area. Pinoli denied that Mendocino Railways is involved in efforts to ship coal along the NCRA line, but acknowledged that the railroad has intervened to try to require the NCRA to follow formal abandonment procedures.
“We're a rails and trails organization,” he said, “not a rails to trails organization.”
However, Pinoli insisted, “We are absolutely not involved whatsoever with anything to do with coal.”
Members of the public weighed in for and against various aspects of the Skunk Train/millsite scenario, although what that scenario is remains pretty unclear. Despite a mailer sent out last week that included an architect's drawing of housing and retail development for the north side of the site, no formal development proposals have been made, and representatives of the railroad, which uses about four acres on the millsite for its current operations, gave no specifics Monday on how they plan to use the additional 272 millsite acres, or what they intend to use the land they now own along Pudding Creek for.
Council members voted 5-0 to approve the letter opposing a new federal loan for Mendocino Railways.