The Municipality of Chatham-Kent is looking at the possibility of selling the inactive WDC Rail.
On Monday night, a report will be up for council approval requesting that the Municipality authorizes an agreement to sell the land and the track materials known as WDC Rail, which runs from Wallaceburg through Dresden to Chatham.
In 2006, the municipality made a binding agreement to purchase the 26.2-mile railway, with a purchasing price of $4 million, from CSX Transportation after the company announced they would be discontinuing the line.
In 2012 council authorized administration to create a numbered company to take ownership of the railway, which operates as WDC Rail. A year later, in October 2013, the railway was officially purchased by the municipality without commencing operating. At this time, administration was instructed by council to continuously seek a business partner and business plan to encourage the future operation of the railway line at little or no cost to the Municipality of Chatham-Kent.
However, that never happened and the railway has since been dormant. By 2018, council gave direction to move forward with the potential sale of rail assets. The report reveals that in early 2019, the municipality was approached by a potential buyer, identified as 2719545 Ontario Inc., about the possible purchase of the assets of WDC Rail Inc. The price tag for the purchase price is listed at $5.2 million including the 181.18 acres of land associated with the line as well as track materials.
There are several terms in the agreement of purchase and sale that the municipality's legal team negotiated with the buyer including keeping the transaction confidential for a period of time for commercial reasons. The final purchase is also pending approval of the environmental condition of the railway land.
"Closing the transaction is conditional upon the purchaser being satisfied with legal title to the property and the environmental condition of the property," the report read. "It is important that council understands that if the purchaser raises title or environmental concerns that cannot be satisfied, the purchaser is not obligated to close the transaction."
Despite being idle, the WDC Rail incurs $60,000 of annual expenditures for required track maintenance, utilities and property taxes that sees no use by rail traffic. If council approves moving forward with the next steps of selling the railway, a report will be provided in 2020 that outlines the financial implications of the transaction.
