Although initial designs called for a trail beside the tracks, a $77 million shortfall — and the threat of losing grant money if the project isn’t completed on time — has pushed regional transportation commissioners on both sides of the rail trail debate to change course and draft a shared plan. 

The agency is now pursuing a bureaucratic maneuver that temporarily removes the legal obligation to keep the tracks in place, with the intention of replacing them should long-term plans for passenger rail come to fruition. The details of how the so-called “peace deal” would be implemented, which would be distinct from the federal railbanking process, haven’t yet been worked out, said Sarah Christensen, executive director of the commission.

Progressive Rail’s rejection of the commission’s attempt to take over the rail line adds another wrinkle to plans for the interim trail. But Christensen says she’s “unfazed” by the letter. She said the commission intends to follow through with hiring another rail operator to take over freight operations in Watsonville, and with its designs for the interim trail. 

“We’re just going to keep moving forward,” she said.

For years, Progressive Rail’s freight service has been confined to a few miles of tracks serving farms near Watsonville. On Jan. 15, the transportation commission announced that it intended to end a 2018 agreement with the company, in part because she said it has failed to perform promised maintenance to the rails.

But in the Jan. 23 letter to Christensen, Progressive Rail CEO Andrea Dobbelmann countered that the transportation commission had failed to hold up its end of the bargain by not making promised repairs to a bridge that would have allowed potential freight service to 4 more miles of the rail line. Christensen said that the commission has spent millions of dollars on those repairs, which were completed in 2021. 

She added that the move to become a common carrier was an inevitable part of long-term plans for passenger rail and a trail. 

“The whole point of us buying (the rail corridor) was for the public to use it, not to benefit a private railroad,” she said. “We’re fighting for the community’s interests.”

Dobbelmann wrote that the company is willing to bring the fight to the U.S. Surface Transportation Board, which regulates freight railways, and to bring a lawsuit. In an email Friday, Dobbelman confirmed that she sent the letter, but declined to comment further.

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