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Ontario company awaiting price on Orangeville rail line

February 18, 2021   ·   0 Comments

By Sam Odrowski

Interested buyer of Orangeville’s rail line, Municipal Transit Solutions (MTS), is still awaiting the asset’s price to make an offer since first meeting with Town staff late last month.

Three weeks after the meeting, the Town of Orangeville told Municipal Transit Solutions CEO Steve Ostrowski that the Orangeville Railway Development Corporation (ORDC) has put out a Request For Proposal (RFP) to assist in the consultation and sale of some of the land parcels of the rail line. Until that process is complete, the Town won’t be accepting any offers.

“There are some real estate assets that the Orangeville Railway Development Corporation owns that are part of the railway corridor, specifically rail lands in Brampton and rail lands in Orangeville, and there’s a little bit in Alton as well,” said Mayor Sandy Brown.

“When the realty company gets hired, it’ll be their job to determine value and to look at who would be the best targets to go after in terms of purchasers, I imagine the Brampton lands will be of interest to developers there as it’s right in the downtown core.”

A decision on who is hired through the RFP is expected to be made by the end of February, according to Mayor Brown. He says at that time, the real estate company will develop a plan over the course of a few weeks and by the end of March, early April, the ORDC should be in a position to entertain offers.

In regards to the western portion of the rail line, Mayor Brown says there’s been some discussion behind the scenes with the Region of Peel on converting a section of it into a recreational trail.

“I think a nice recreational trail where cyclists or hikers could be on there would be a tourism asset for both Caledon and Orangeville,” said Mayor Brown. “With Orangeville being the trailhead, people will end up here and it’ll be good for our local hospitality and local… Airbnb’s and such along the way.”

“Caledon, I’m sure will benefit from those day trippers or weekenders that want to come up from the city to beautiful Caledon and Orangeville,” he added.

Regardless of what happens with the rail line, Mayor Brown stressed that it’s important to offload it so the Town can eliminate its roughly $450,000 a year tax burden.

Since the railway was purchased in 2000, it’s cost around $10 million in total to taxpayers.

Mayor Brown says MTS’s plans, which involve building a private Ultra Light Rail (ULRT) transit system from Brampton to Streetsville, are interesting, but in terms of running a transit line all the way to Orangeville, it’s not financially viable until the population here grows significantly.

The benefit of having the transit line only run from north Brampton to Streetsville is that the Town could still build a rail trail on the unused portion of the line, closer to Orangeville – meeting both the Town and MTS’s goals.

Later on, Ostrowski says MTS would ideally have the transit line stop at the Forks of the Credit on weekends and operate to north Brampton on weekdays, with the remainder of the rail line acting as a rail trail until such time that the population grows enough to support ridership from Orangeville.

The only reason MTS is able to consider a private transit system versus a publicly funded system is because the model is essentially running electric buses on rails, which has a fraction of the costs of regular Light Rail Transit (LRT) such as Go Trains.

Once MTS is given the green light from the Town to make an offer, Ostrowski says they’ll put one in within two months, but the longer they wait, the less value the railway could provide.

Currently, MTS’s goal is to validate that their ULRT technology can run a transit system, since they haven’t been hired to do any large projects to date. The Orangeville railway would serve two purposes, to run a transit system and demonstrate MTS’s capabilities as a company to deliver on their claims that they can build functioning transit systems at a fraction of the cost of regular LRT projects.

So, a transit line from north Brampton to Streetsville has value beyond the revenue potential for MTS, according to Ostrowski.

“Right now, frankly, if it didn’t make money, we wouldn’t care because we wouldn’t have bought it, we would be operating it, using it for purposes other than just profit,” he explained.

“The Orangeville line is valuable to us because it suits our timelines, but a year from now, it won’t suit our timeline, we may not give a rat’s behind about it. Why, because we might be doing a project in Hamilton or in Ottawa… and this thing falls through the cracks. It becomes relative to our other opportunities, a risk.”

In regards to the MTS’s intention to put an offer forward once the asset is officially put up for sale, there were no conflicts following a deep dive into the logistics of running private transit along Orangeville’s rail track, according to Ostrowski.

He says there was a complication with a diamond crossing but it was determined that their electric buses would go off the rails at the crossing, around it and back onto the rails, so there would be no delays for freight on crossing lines.

Apart from MTS’s proposal, Mayor Sandy Brown says a unique component of the roughly 55km railway is that it could be used as a potential infrastructure corridor in the future. He noted that in the years ahead, the Region of Peel could be looking at bringing water and sewer line deeper into Caledon from where it is now and utilize the over 60-foot-wide rail corridor. There’s also the potential to run fibre optic cable through it, since there’s a large buzz around rural internet and improving services, particularly amidst COVID-19.

Meanwhile, Mayor Brown says he’s receiving lots of phone calls from the public regarding the railway and stressed that he isn’t the arbiter of the process.

“The way this goes, the town staff is going to be putting this RFP together under direction from Council and at some point in time, there’s going to be an offer presented to Council and it will be a public event. We’ll be weighing our options there,” noted Mayor Brown.

It’s important to note that the decision to shutter the Orangeville rail line was not made by the Town, the manufacturers who currently use it to transport goods decided to wind down their operations due to it no longer being economically viable. Operations will cease on Dec. 31 of this year.

“I think if we go back 20 years ago, when this deal was originally made, transportation was changing from these rail spur lines to what they call intermodal transportation where you’ve got those big sea containers that go from ship to rail to truck,” explained Mayor Brown.

“That’s been going on for a couple of decades now and that’s the way that’s most efficient and inexpensive way to get product to or from its manufacturing spot. So, these short line rails have closed all over North America and this is just another one of those that’s due for that – just not financially viable”

Meanwhile, Ostrowski’s eager to put in an offer and get the ball rolling for purchasing the rail line once its officially goes up for sale. 

“The sooner, the better and the outcome for all is optimized the sooner we can act on this,” he said. “What MTS would like to do is to be formally requested to make an offer, and with that, we would perform the appropriate study to determine what it’s worth to us.”



         

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