What are allowable uses in Railroad Rights of Way

Question

I have an opportunity to pick up a nice parcel, zoned heavy industrial, for peanuts. There is a 200' wide easement on the property from an old railroad line. It leaves about 10% of the property as clear to develop, but obviously, the rest would be extremely valuable to develop in this area, and it would also have direct access to the rail line. I contacted the railroad in regards to this parcel, but have not heard back. I also did some research on the history and usage of these parcels and noticed that the Supreme Court recently ruled in favor of landowners, in that if a rail line is abandoned, the easement becomes void, on fee simple land. It seems like this may be the case, as aerial views indicate that there is no more rail lines running through the middle of this lot.

Any ideas of acceptable uses in the R.O.W.? For example, would I be able to store things on the lot? Graze cattle? Have an RV storage? Anything?

Any ideas of acceptable uses in the R.O.W.? For example, would I be able to store things on the lot? Graze cattle? Have an RV storage? Anything?

Henry Clark · Answer

Talk with your neighbors where it would run through and find out what they know.  You will find someone that already has addressed this.

Michael Rutkowski · Answer

From my talks with BNSF, they are wanting to charge anyone who needs a ROW about $4600 annually, per lot, and this is 5 lots... It seems like there are 2 lines, with 1 of them being in existence, and used. The one going through the center of the property, just seemed to have never existed. I confirmed this visually. It didn't even seemed like it had been removed, just never even developed in the first place, as there are trees in the direct path over 100 years old. So I at least managed to confuse them a bit. But regardless of this, there is a 400' easement (200' into the 5 lots in question), eliminating 90% of the land usage without a leaseback on your own property of $4600/lot. I asked them what this fee was for, and since I was speaking with their real estate lawyer, he did honestly tell me it was almost 100% for legal fees. So I'm going to need to pass on this one!

I'm still toying with the idea of maybe doing a coffee hut out there, or equipment storage, but the market seems dead on the first idea, and saturated on the other. It's in a heavy industrial area, so maybe a food truck parking lot... I just don't like the idea of not being able to build on the land, and building equity that way.

Michael Rutkowski · Answer

It is confusing. There is 1 rail line being used on the far corner of the property, which is where the rail access would come from. Then on the RROW map, there seems to be another rail line, which goes through the center of the property. This is the one I have a problem with it, because the easement off that line, seems to cover 90% of the lot. But when you view the lot, on the ground, there is obviously no rail line there, or indication of any line ever being there. The far corner rail line is very obvious, being about 4' higher up than the lot on a bed of 1-2" crushed rock.

So I did call the company, which is BNSF in this case, and even they are confused. They are wondering where I got this map from, as not only do they not have any indication of a rail line there, but the streets on the far side of the lot in question don't even exist. On the map they show up with railroad crossings... But I did manage to get ahold of them, and while they did not give me any specific advice (since they need to do more research on this), they did say a blanket lease starts at $4600 annually. This is a lease, to access the ROW on your own land. Needless to say, almost $400/mth in rent on my own land + taxes, is not appealing to me. So while I wait for their response, I am thinking this is a no-go.

So while there is no rail line in the one spot, there is in another, and because of this, according to the rail company, the RROW is legit, and they would need to lease me back my portion of land... The lease for 1 lot is $4600, and this is 5 lots. I think at this point I will wish the seller good luck with their sale, and fully understand why they are basically giving it away now.

Jackson Babcock · Answer

@Michael Rutkowski

Look into Rail-to-Trails. Its an organization that utilizes the old railroad right-aways to form paths for walking, biking, hiking, Etc.  I don't know all the specifics but I had a neighbor in South Carolina who owns a piece of property that once had a railroad easement and tracks running through it.  The tracks had been removed for years.  From what he told me, the granted easement stated once the tracks were removed the land goes back to the owner but the rails-to-trails came in and reclaimed the right away for a walking path.  I know he fought this in court and lost.  Now he has a hiking trail through his property.  I don't know all the specifics and I'm not here to say who is wrong or right, just wanted to bring it to your attention.  Like @Henry Clark said "Railroad companies are a special animal."

Henry Clark · Answer

Its really a yes or no status.  You either have a Railroad Right of way or not.  If you have a ROW, then you can't do anything there.

A little confused.  There is no Rail, but you have direct access to the rail?

A.  Recommend you follow the old rail line above and below your property.  Look and ask other property owners where it runs through and see if they have built in the path and what legal actions or inactions they took.  They may have already did your research.  Normally easements stay for ever, unless they are legally released.  If not,  your banker or any future finance deals will not approve loans on any buildings in that right of way.

B.  Find the rail company and talk with their Legal or Property administrators and note the land and get their documented position.

We have two properties with Railways next to them or in them.  One is operational and they will not let you even park a truck there.  We bought our land from them.  The other was a loading spur for an old company that no longer exists.  Which we tore out.

Railroad companies are a special animal.  They have more power than most governmental units.