The federal Surface Transportation Board has rejected Great Lakes Basin Transportation's application to build and operate a 261-mile freight railroad from LaPorte County to southeast Wisconsin.
"GLBT has failed to provide the board with accurate financial information upon which the board can rely to make a determination on the transportation merits of the project," the STB stated in its decision, dated Wednesday.
Financial statements that GLBT provided in June show the company had $802,000 in accounts payable as of Dec. 31, and investors owned $473,573 in common stock.
But, the STB observed, "The balance sheet ... contains an unexplained line item for 'net income' (amounting to negative $1,203,545) that appears to account for a substantial difference between its assets and its liabilities and stockholders' equity."
Further, "GLBT’s current assets of $151 are so clearly deficient for purposes of constructing a 261-mile rail line that the board will not proceed with this application given the impacts on stakeholders and the demands upon board resources," the STB ruled.
Company attorney Michael Blaszak said Thursday that GLBT "is assessing its options with respect to the board's decision today and will have no further comment on the decision."
Railroad officials have said in the past they can't secure funding commitments from investors without STB approval of the project, hence the limited amount of current resources.
Plans for the Great Lakes Basin Railroad call for 244 miles of mainline track and 17 miles of branch lines, including one connecting with the Chicago South Shore & South Bend Railroad at Kingsbury. The railroad would have 26 connections to other railroads, including two in Lake County and six in Porter and LaPorte counties.
The railroad would be able to handle as many as 110 trains per day for various-length trips along its three-state path, according to the GLBT application.
The construction cost was estimated at $2.8 billion.
The line would allow trains passing through Chicago to avoid congestion there, an opportunity GLBT officials said ensured its viability.
"A freight train can take 30 hours — more during periods of severe weather — to pass through the Chicago area, resulting in added inventory cost for shippers, suboptimal equipment utilization, air pollution, delayed passenger trains and billions of dollars in wasted productivity," GLBT stated in its application.
Frank Patton founded Great Lakes Basin Transportation in 2011. An environmental review process, overseen by the STB, began last year, but was suspended in December at the request of GLBT so it could concentrate on completing the application. The STB decision officially discontinues the environmental review.
Opponents of the freight rail project expressed their satisfaction in the hours after the the decision was published.
Porter County Commissioner Laura Blaney, D-South, said cooperation among elected officials and organized citizens was key.
"(U.S. Rep. Pete) Visclosky ensured all residents had scoping meetings in their counties, our state legislators updated our antiquated eminent domain laws creating a level playing field, various local governments including the Porter County Commissioners passed resolutions stating concerns, and our citizens banded together to create a strong grassroots effort and the best decision for the most people was made," she said via email.
Howard Learner, executive director of the Environmental Law & Policy Center, said "the board made a very sensible, very clear decision."
The ELPC had questioned GLBT's financial viability in a petition filed Friday asking the STB to reject the application. That petition was made moot by Thursday's decision, but "we got what we wanted," Learner said. "The board is at this point saying enough is enough."