Bad News from CSX

As I was doing my research for the capstone I came across the July 17th Commercial Appeal article "The End of the Line:; Plans to Purchase old Railroad Corridor Screech to a Halt." According to the article the planned purchase price of the rail line was well below the expectations of CSX. In fact there was over a 13 million dollar difference between the price the city was willing to pay and the price the cities own appraiser valued the land at. According to the article:

CSX appraisal of the property last year set its value at $17.8 million. The local governments hired their own appraiser to counter that, but A.E. Balkin & Associates this spring arrived at a sum that's not much lower - $15.7 million. Both appraisals were based on an "over-the-fence" method of setting value. It means the land price was based on what it would be if it was an extension of adjoining property lots. With the high appraisals in hand, CSX rejected a city-county offer of $2 million for the corridor.

Citing their shaky financial situation, the city and county have pulled their bid to purchase the right of way. As a result the status of the greenline and the possibility of a light rail corridor are put on hold. The city believes that they have presented a good package, since it would seem that the only market for the corridor is local government. On the other hand, CSX is a business and seek to maximize profits for their shareholders. From the article:

CSX spokesman Gary Sease said the company is obligated to seek the market price when selling land."We are a for-profit company and we're responsive to our shareholders, so we don't give the property away. We sell it for fair market values,"

With the city and county pulling out of the negotiations the only entity left pursuing the purchase of the rail right of way is the non-profit, Greater Memphis Greenline. It remains to be seen if the non-profit will be able raise the substantial funds needed for the current purchase price.

The central question is what is going to happen now? Does CSX have any other potential buyers to realize what they consider to be the market price of the land? Could they sell the rail right of way to the land owners adjacent to the rail line? It seems to me that if CSX's only option is to sell the corridor in its entirety than the market analysis used by both the local governments and CSX is flawed. Connecting the market value of the corridor to the market value of the neighboring parecls makes little sense if the land cannot be purchased by adjacent land owners. The question then becomes, what is the market value for the entire right of way taken as a transportation/recreational corridor. With either side not willing to negotiate the corridor will be on hold until one or both sides are willing to compromise?