Pacific Imperial Railroad
This page is about the Pacific Imperial Railroad.
Feb 04, 2015 Desert Line remains shrouded in secrecy. Council member David Alvarez calls for transparency on railroad restoration. By Joshua Emerson Smith. Alvarez asked for an update on a feasibility study of the Desert Line, as well as a financial audit of Pacific Imperial Railroad (PIR), the contracted company. MTS officials have yet to respond. http://www.sdcitybeat.com/sandiego/article-13870-desert-line-remains-shrouded-in-secrecy.html
JAN. 28, 2015 Mystery investors take over desert line. MTS board member demands answers on border railroad, gets few. By Greg Moran http://www.utsandiego.com/news/2015/jan/28/mystery-investors-take-over-desert-line/
Jan. 28, 2015 Trouble ahead? Trouble behind! Metropolitan Transit System announces new investors in Desert Line railroad By Dorian Hargrove, http://www.sandiegoreader.com/news/2015/jan/28/ticker-new-investors-desert-line-railroad/#
JAN. 15, 2015 The company that has a 99-year lease to operate a rail line from the border east to Imperial County made a required $500,000 payment to the Metropolitan Transit System Thursday, according to an agency spokesman. The payment was made by Pacific Imperial Railroad, and was originally due Jan. 2. The company, which has been plagued by accusations of mismanagement and fraud by investors and former executives, missed that deadline. That plunged the company into a technical default with MTS, which gave the company 10 days to make good on the payment. That deadline was Thursday. This was the second time the company was late on the required payment and needed the 10-day extension. It also missed a payment due July 1 but eventually paid up. http://www.utsandiego.com/news/2015/jan/15/pir-makes-payment/
Jan. 6, 2015 Metropolitan Transit System fails to foster trans-border railroad agreement. By Dorian Hargrove, Jablonski's lobbying can be seen in emails during the months leading up to the December meeting. On November 19, 2014, Jason Vorderstrasse, political consultant at the U.S. consultate's office in Tijuana, responded to MTS's request for them to host a meeting between representatives from Baja Rail, Jablonski, MTS attorney Karen Landers, county supervisor Ron Roberts, and executives from Pacific Imperial. "I'll go ahead to work with [Baja Rail] to come up with who will represent them. Please let me know who you think should attend from [Pacific Imperial]," Vorderstrasse wrote to Landers and Jablonski. "I'll also plan to meet with [Baja Rail] ahead of the joint meeting to stress the importance of the joint meeting and to make sure that [Baja Rail] is committed to making the line work." Landers responded the following day by asking if Vorderstrasse could invite Tijuana mayor Jorge Enrique Astiazaran and "[bring] the parties together." Vorderstrasse suggested minister of economic development Carlo Bonfante would be better. Jablonski agreed. "I think Carlo would be good also, thanks for getting back to us." Jablonski also suggested that Roberts invite Larry Irving, president of the Irving Group, a consulting firm that provides "strategic advice and assistance to international telecommunications and information technology companies." The meeting took place on December 15. Unbeknownst to Jablonski and others, Beltran was at work negotiating an agreement with another U.S. company, FPN-USA, run by the founder of Carrizo Gorge Railway, Gary Sweetwood, to haul freight on the Mexican side of the line. The agreement created another expensive obstacle for Pacific Imperial and essentially stripped them of any chance to connect the Desert Line with Mexico. Now, with Pacific Imperial unable to make the lease payment, as well as the haulage agreement between Sweetwood and Baja Rail, Jablonski's time and efforts for Pacific Imperial appear to have been for naught. Pacific Imperial executive Donald Stoecklein declined to comment on questions about the missed payment. http://m.sandiegoreader.com/news/2015/jan/06/ticker-desert-line-deal-derails/
JAN. 5, 2015 Railroad misses payment to MTS. Investor group hoping to revive border line also was late in July. The most recent payment was due by the close of the business day on Friday. MTS spokesman Rob Schupp said Monday that no payment was received. http://www.utsandiego.com/news/2015/jan/05/pir-pacific-imperial-misses-jan1-payment/
Oct 30, 2014 Hunter urges U.S. Attorney to investigate Desert Line Railroad. press release. http://hunter.house.gov/press-release/hunter-urges-us-attorney-investigate-desert-line-railroad
NOV. 11, 2014 Border rail line faces 40-mile gap. Absent a deal in Mexico, freight would be trucked in some spots. The investor group that was awarded a 99-year lease by Metropolitan Transit System to resurrect the dormant Desert Line railroad hasn’t been able to reach a key agreement with officials in Mexico, dashing hopes for a binational railroad that economic boosters have long sought. Instead, railroad officials have switched to a secondary plan using only U.S tracks. Freight from Mexico would be offloaded from rail lines, trucked across the border and reloaded onto trains at the Desert Line near Campo, under the new plan. http://www.utsandiego.com/news/2014/nov/11/border-rail-line-faces-40-mile-gap/
NOV. 7, 2014 UTSANDIEGO As a Metropolitan Transit System board member, San Diego Councilman David Alvarez decided he wanted to read up a bit on the controversy over the agency’s 99-year lease of the Desert Line railroad to a group of investors with a checkered history. So in July, Alvarez asked to see the business plan submitted by the leaseholders, known as Pacific Imperial Railroad, describing how they were going make the dormant line along the U.S- Mexico border function and thrive. He also asked to see a reconstruction plan outlining substantial work that had to be done before any trains could run, such as clearing tunnels and repairing tracks. But Alvarez was told by MTS lawyer Karen Landers that before seeing the documents, he would have to first sign a non-disclosure agreement, promising he would not share the information with third parties. “Each document is a confidential document not for public disclosure,” Landers wrote. “I can absolutely provide copies for Councilman Alvarez, but they will need to be preceded by a Non-Disclosure Agreement (NDA) acknowledging that each document is a confidential trade secret and that the reconstruction plan is a safety sensitive document. Therefore, the documents will be for CM Alvarez’s eyes only and the contents cannot be discussed with third parties.” Alvarez confirmed to U-T Watchdog this week that he refused to sign the non disclosure pact and still had not seen the records. And he sounded a bit miffed. “My role as a public servant on public agency boards is very clear,” he said in an email. “Only in a matter of closed session discussion, settlement negotiations or other major transactions has information been withheld from the public, but even that information is released once agreement is reached.” http://www.utsandiego.com/news/2014/nov/07/secrecy-agreement-desert-line-david-alvarez/
Nov. 1, 2014 Runaway train prompts need for brakeman. Congressman Hunter asks U.S. Attorney look into railroad company. By Dorian Hargrove, http://www.sandiegoreader.com/news/2014/nov/01/ticker-congressman-hunter-binational-railroad/
Oct 16, 2014 Desert Line: When it comes to reconstructing portions of the so-called “Impossible Railroad,” our southern neighbors are downright embarrassing us. On the U.S. side, Pacific Imperial Railroad has struggled to make any headway reviving the Desert Line, a 70-mile stretch of defunct rail in southeastern San Diego County that was leased to the company by Metropolitan Transit System. Pacific Imperial wants the line to serve as a direct link between factories in northern Mexico and markets in eastern U.S. “They are particularly focused on moving cars and other freight made in a factory-filled region between Tijuana and Tecate in Mexico into the U.S.,” Ari Bloomekatz reported. Baja California isn’t waiting for Pacific Imperial to get its act together. Gov. Francisco Vega de Lamadrid announced in September he had gotten more than $15 million from Mexico’s government to fix up the Impossible Railroad segment between TJ and Tecate, about 44 miles long. Vega took the opportunity to serve up some real talk for Pacific Imperial and the U.S. as a whole. From the U-T: “We can no longer be waiting to hear that tomorrow they’re going to get the line of credit, or the guarantee for their investment,” he said. … A big hurdle is getting the U.S. and Mexican sides to collaborate. “We see that we are not synchronized,” Vega said, “but that’s not going to stop us on this side.” http://voiceofsandiego.org/2014/10/16/tijuanas-winning-streak/
Scanning ‘The Impossible Railroad’ http://novalearningnetwork.com/scanning-impossible-railroad/
Sept. 16, 2014 Baja California moves forward on rail line. But dream of bi-national project on hold. http://www.utsandiego.com/news/2014/sep/16/desert-line-pacific-imperial-mts-baja/
Sept. 10, 2014 Crazy Train. Loco-motion: A modern-day rail heist. By Dorian Hargrove, http://www.sandiegoreader.com/news/2014/sep/10/cover-crazy-train/
Aug 20, 2014, Can (Pacific Imperial) do this? I think they can because, you know, I see this gelling up in a different way than was really envisioned. I think any deal to make this happen is going to have to involve Mexico. … Another model that people are strongly considering is some kind of … a joint venture between PIR and their equivalent on the Mexico side, which is Baja Rail. … They want this thing to happen over there, so there could be a joint venture. … Somebody could, they could blend companies, they could have stock transfer … they could form a new company, which would be a joint venture, there’s any number of legal ways where that could happen. And then I think it lends a whole other dimension to what the financing prospects are. … Some kind of formal interaction between PIR and Baja Rail, and that’s what we’re exploring right now. http://voiceofsandiego.org/2014/08/19/i-saw-an-opportunity-to-regain-control-of-the-desert-line/
Aug 13, 2014, Pacific Imperial Railroad’s bad track record. Desert Line leaseholder likely claimed fake asset. http://www.sdcitybeat.com/sandiego/article-13309-pacific-imperial-railroads-bad-track-record.html
AUGUST 7, 2014 San Diego Explained: The Impasse of the ‘Impossible Railroad’ http://voiceofsandiego.org/2014/08/07/san-diego-explained-the-impasse-of-the-impossible-railroad/
AUGUST 7, 2014 Pacific Imperial has no plans to recreate the full path of the Impossible Railroad and instead intends to use the Desert Line as a direct link between factories in northern Mexico, called maquiladoras, and lucrative markets in the eastern U.S. They are particularly focused on moving cars and other freight made in a factory-filled region between Tijuana and Tecate in Mexico into the U.S. Pacific Imperial is not really concerned with rail connections west of Campo on the U.S. side of the border. That includes the final leg of the Impossible Railroad, which ran from San Ysidro into and around San Diego. “We never intended, initially at least, to be operating on the San Diego loop,” said Pacific Imperial CEO Donald Stoecklein. “Our intent is to help the maquiladoras move product in and out of the maquiladoras.” http://voiceofsandiego.org/2014/08/07/how-san-diego-wound-up-on-the-wrong-side-of-the-tracks/
2014 first half
July 31, 2014 Pacific Imperial Railroad, the company that leases the binational track — also known as the Desert Line — from San Diego's Metropolitan Transit System, is in financial peril and has been for some time. According to business records obtained from the State of Delaware, where Pacific Imperial Railroad is registered, the company has failed to pay annual taxes for two years, now owing $267,794 in back taxes. The document lists the company's current status as "a corporation that has not filed the required annual report and there are delinquent taxes due." The tax-debt revelation is the latest in what has been a rough couple of months for the company, its principals, and for Metropolitan Transit System officials. During that time, allegations that the railroad is nothing more than a vehicle for investment fraud have appeared in press reports and at monthly transit-board hearings. In addition to the alleged fraud, information regarding a $1.6 million penalty for transporting marijuana from Mexico in 2010 has come to light. Combined with the lack of progress in getting the railroad operational, all these factors have prompted congressman Duncan Hunter to get involved. During the past month, Hunter has written multiple letters to Metropolitan Transit System CEO Paul Jablonski, asking for reasons why Metropolitan Transit System thought it was in the public's best interest to award a railroad company with nearly no railroad experience a 99-year-lease. The congressman also asked about allegations of fraud and a potential financial scam by the company's top shareholders. Massive tax debt is not a new problem for the railroad. In July 2013, a federal tax court ordered former president of Carrizo Gorge Railway (Pacific Imperial Railroad's predecessor) and current self-proclaimed "consiglieri" to the railroad, Charles McHaffie, to pay $359,148 in unpaid taxes plus interest. According to the judgement, the harsh penalty was handed down due to McHaffie's "repeated failure to comply with court orders and participate in the discovery process." "It appears this is the way [Pacific Imperial Railroad] does business and its unsettling,” Joe Kasper, Congressman Hunter’s spokesman. “What’s no less confusing is that questionable practices and patterns don’t seem to matter to [Metropolitan Transit District] — and that is truly frightening.” Kasper says Hunter will continue to look into the matter. "If [Metropolitan Transit System] really thinks none of that matters, then taxpayers have good reason to suspect that [the transit agency], regardless of whether it knows it or not, could be complicit in perpetuating a fraud. At this point, the next step is to meet with federal authorities from various agencies to determine the best way to proceed to ensure the right light is shined on this situation. The only suitable outcome at this point is termination of the lease." http://www.sandiegoreader.com/news/2014/jul/31/ticker-calm-down-mr-congressman/
JULY 28, 2014 Do you want to know how a controversial company tasked with rebuilding a rail line along the Mexican border is actually going to construct and finance that line? Your guess right now is pretty much as good as the public officials who put them in charge. Two years ago the Metropolitan Transit System allowed Pacific Imperial Railroad to try rebuilding the Desert Line while the agency collected half a million dollars every six months on the lease. But its effort to rebuild the 70-mile stretch of defunct rail in southeastern San Diego County has been mired in conflict, allegations of mismanagement and claims county transportation officials were careless with a valuable public asset. Two congressmen on the Transportation and Infrastructure Committee even chimed in officially, saying they had concerns about the company’s financing and MTS’ actions. And now MTS refuses to release documents that would answer some of the most basic questions about the project, how Pacific Imperial actually intends to rebuild the line and what its business strategy is. The agency is withholding the company’s reconstruction plan because of concerns about terrorism – seriously. “The Desert Line Reconstruction Plan records consist of sensitive security information relating to freight transportation facilities and operations,” reads a statement from a MTS spokesman. And Pacific Imperial’s business plan is also not being released to the public. MTS spokesman Rob Schupp cited privacy issues. It is unclear whether any of the board members have seen a full reconstruction plan, but in an interview Thursday, Pacific Imperial head Donald Stoecklein indicated that the fact there are now essentially two reconstruction plans may be complicating the situation. The first plan he described as mostly “triage” work along the track that’s necessary to adhere to the terms of the lease set forth by MTS. That lease, which demands the $500,000 payment every six months, also includes specific milestones that Pacific Imperial must meet on its way to opening the line. If it misses the milestones or misses a payment, then MTS gets the line back from Pacific Imperial and all of the associated studies with it. Then Stoecklein said there was another plan for a more complete reconstruction. The estimates for full construction run anywhere from $60 to $100 million, he said. The plan is to eventually better connect manufacturers in northern Mexico with a rail freight route through the U.S. and into lucrative eastern markets. http://voiceofsandiego.org/2014/07/28/agency-says-business-plan-for-impossible-railroad-is-none-of-your-business/ http://www.utsandiego.com/news/2014/jul/31/mts-oig-hunter-pacific-imperial-border-railroad/
July 18, 2014 Trouble ahead, trouble behind. Uncovered document tells of desert railway drug-smuggling bust in 2010. http://www.sandiegoreader.com/news/2014/jul/18/ticker-sort-grateful-deads-casey-jones/
July 18, 2014 The National Government of Mexico owns ALL the railroads in Mexico, it gives concessions to companies to operate the different railroads. Example, KCS/KCSM has most of the eastern portions of the system, UP/Ferromex operates the western portions! The SD&AE/Tijuana y Tecate was always operated by SP, then later after MTS bought the line from SP and brought in Kyle, pretty much the same situation, but with a percentage of the revenues going to Mexico. The MOW was done by the Mexican track crews and paid by the Federal Government. SDIV had an exclusive agreement with Mexico to operate that portion of the line, again with Mexico paying the wages, SDIV would supply track materials . When Railamerica took over, the situation was in flux as the Federal Government nationalized ALL the rail lines in Mexico under the FNM banner, by the mid 90s, Mexico decided to offer concessions to private operators. Mexican law prevents non citizens/corporations from owning more then 49% of any companies working in Mexico and US corporations had to partner with Mexican corporations. When Mexico put ALL the lines up for bidding, all lines were snapped up except for the TyT!! A Mexican Corporation bid $10 million and SDIV bid $2 million! The Mexican corporation was the winner but never came up with the money and after 8-10 years the line was rebid and only SDIV bid at less then $1 million and the bidding was halted and the existing agreement with SDIV was continued on a monthly basis. When this happened the Federal Government stopped all payments for MOW and dumped that responsibility on Railamerica/SDIV, who objected to that without renegotiating the agreement. This is where, during the late 90s CZRY entered the picture and got an operating agreement with SDIV to haul sand from Lindero, just south of the border, to Campo. Railamerica refused to do the MOW and Mexico dropped the operating agreement to a day by day basis. CZRY went to Mexico offering not only to operate the line, but also do ALL the MOW and marketing of the line as well! Mexico then pulled the operating rights from Railamerica and awarded them to CZRY! CZRY was under-capitalized from the start and was looking for outside investment, when the hostile takeovers were begun and moving forward to today, the people who took over CZRY and essentially ran CZRY into the ground, not paying payroll taxes, equipment leases and the like! They are also the principals in PIR and we know that situation as it exists today!! Mike http://www.westcoastrailforums.com/thread-7684-post-85736.html#pid85736
July 16, 2014 James Warner, the criminal defense attorney who yesterday pled guilty to stashing $100,000 in drug money for a client of his, has played a role in other allegedly fraudulent endeavors in San Diego County. Warner was not only the attorney for Carrizo Gorge Railway, the binational railroad that has made headlines in recent weeks, but for a short period of time served as the railway's chief executive officer as well. In addition, Warner represented Charles McHaffie in a lawsuit filed by Gina Seau, the wife of the now-deceased football player, Junior Seau. In her lawsuit, which has since been dismissed, Seau accused McHaffie of scamming her out of $2.5 million with promises of cash windfalls from the Carrizo Gorge Railway — McHaffie is currently involved in Carrizo Gorge Railway's offshoot, Pacific Imperial Railroad, now at the center of numerous allegations of fraud. http://www.sandiegoreader.com/news/2014/jul/16/ticker-lawyers-money-train-seems-be-stopping/#
July 16, 2014 At an executive meeting this week of rail line executives, project leader and businessman Charles McHaffie made it clear the most recent $500,000 payment had been made and there was more where that came from. MTS Chief Executive Officer Paul Jablonski half-jokingly told McHaffie that he could make the next payment early if he wanted. McHaffie declined, saying he would milk this one a bit longer.Other members of the MTS board defended Pacific Imperial and the agency. Board member Bob McClellan, of the El Cajon City Council, said Pacific Imperial had a reason for making its payment late and he “understand(s) their position.” “Of course it concerns us that a congressman is concerned, but we’ve got our own information, so it’s not like he’s telling us anything we don’t already know,” said George Gastil, a Lemon Grove councilman, in response to an inquiry from Reps. Duncan Hunter and Jeff Denham about the line. But in a new letter to MTS Wednesday, Hunter wrote that it appears “MTS does possess the ability to control the lease terms.” Hunter also said a property in Mexico that Pacific Railroad has used as “cornerstone asset” for its involvement in the project “might not be owned or controlled by PIR or any of its principals – and never has been.” Oh, that, and he says the property — which he believes Pacific Imperial touts as worth $563 million — may only be worth $1.4 million. http://voiceofsandiego.org/2014/07/16/mts-almost-got-off-easy-on-the-desert-line/Cryptically, he wrote in parenthesis: “It is my understanding that this issue is being examined by federal authorities.”
July 16, 2014 Hunter still troubled by MTS record on border railroad. http://j.mp/1tSxSQI [pdf]
July 13, 2014 A group of border-region business interests are eager to see the dream of rebuilding the Desert Line become reality, but the project is now mired in conflicts involving its latest owners and the Metropolitan Transit System. http://voiceofsandiego.org/2014/07/14/the-desert-line-mirage-lives-on-for-now/
July 13, 2014 Hear that train a com in'? Railway company makes overdue lease payment. http://www.sandiegoreader.com/news/2014/jul/13/ticker-hear-train-comin/
JULY 11, 2014 The company that has a contract with the Metropolitan Transit System to rebuild and operate a border rail line made a $500,000 payment to the agency Friday, ten days after the deadline to do so. The payment from the Pacific Imperial Railroad is required under the terms of a 99-year lease it has with MTS to run the Desert Line, a 70-mile length of track that runs from Campo to Plaster City in Imperial County. The lease requires the company to pay MTS $1 million per year in two installments. The first was due on July 1 but the company, which has been the subject of accusations from former executives of fraud and whose key leaders have been involved in numerous lawsuits and bankruptcies, did not make the most recent payment at that time. The company said it was holding the payments until a query about the validity of the lease that was raised in a June 27 letter from Rep. Duncan Hunter, R-Alpine, could be answered by the agency. In a response this week to Hunter, the agency stood by the 2012 lease, saying it was a better deal for taxpayers than a previous agreement that was in place. It also said the award complied with state law and the lease protects taxpayers in the future because it requires the company to meet certain performance milestones that if aren’t met could result in the lease being terminated. http://www.utsandiego.com/news/2014/jul/11/pacific-imperial-railroad-makes-lease-payment/
JULY 10, 2014 MTS answers Congress on railroad. Agency says the lease was not subject to competitive bidding rules. http://www.utsandiego.com/news/2014/jul/10/mts-answers-congress-border-railroad/
July 9, 2014 Who owns Rancho Tembabichi? Metropolitan Transit System to face more questions about railroad deal. for MTS, the lease with Pacific Imperial was needed for several reasons: first, if Pacific Imperial is unable to get the rail company on track, the rights to the Desert Line would be returned to MTS without the restrictions placed on it in a 1984 agreement that allowed then-lessee RailTex an option to purchase the line for a fraction of its value. The other plus, according to MTS: even if Pacific Imperial was successful in getting the railroad operating, MTS would receive the $1 million lease payment that could go toward other transit improvements. "Leaving aside that this was not a procurement of services or goods, sole-sourced or otherwise, MTS's enabling legislation gives it broad, unrestricted authority to 'lease, mortgage, sell, or otherwise dispose of any real or personal property necessary to the full or convenient exercise of its powers,'" reads the July 9 letter from MTS. "MTS may contract with 'any person upon such terms and conditions as the board as the board finds is in its best interest.'" The transit authority's letter also addressed the congressmen's questions over Pacific Imperial Railroad's financial integrity, despite the numerous lawsuits and the fact that the people behind the company were the same people who were incapable of repairing the line and running freight after a stockholder takeover of the old Carrizo Gorge Railway Inc. "At the time the [Pacific Imperial Railroad] agreement was approved in 2012, MTS was aware that [Pacific Imperial] was financed by a small group of shareholders…. MTS was aware that [Pacific Imperial] was attempting to raise additional 'seed funding' to support a larger financing effort. [Pacific Imperial] informed MTS that it owned a large property in Baja California that its shareholders were willing to put up as collateral for a project loan, if this was something that was requested by investors/financial institutions. MTS did not take a position as to the appropriate financing method....” http://www.sandiegoreader.com/news/2014/jul/09/ticker-who-ons-rancho-tembabichi/
JULY 3, 2014 SAN DIEGO — The company granted a 99-year lease to operate the Desert Line railroad missed a mandated $500,000 payment to the Metropolitan Transit System that was due on Tuesday. In a letter to Donald Stoecklein, chief executive officer of leaseholder Pacific Imperial Railroad, MTS lawyer Karen Landers wrote that her agency could terminate the lease for nonpayment of the funds, and gave the company until July 14 to pay up. According to Landers’ letter, Stoecklein has told her that the company intends to make the payment next week and that the payment was late because of “delays and difficulties” stemming from a letter sent Friday by Rep. Duncan Hunter, R-Alpine, and another congressman. In that letter, the representatives demanded that MTS explain whether the lease violated state law against no-bid contracts, and whether the agency had thoroughly vetted the background of the company and its shareholders. In a response to Landers, Stoecklein said the company decided to “hold further payments” until its own independent expert reviewed the state law issue. The 70-mile Desert Line runs from the border near Campo to Plaster City in Imperial County, with a portion dipping into Mexico. It’s considered a potential driver of border commerce. The company got the lease in 2012, but has made little progress toward restoring service. http://www.utsandiego.com/news/2014/jul/03/tp-railroad-line-operator-misses-lease-payment/
JULY 1, 2014 CONGRESSMEN DEMAND BORDER RAILROAD INFO. Hunter questions MTS granting 99-year lease to troubled company. http://www.utsandiego.com/news/2014/jul/01/tp-congressmen-demand-border-railroad-info/
June 30, 2014 MTS chief Jablonski railroaded? Congressmen seek answers regarding backcountry railway deal. By Dorian Hargrove, http://www.sandiegoreader.com/news/2014/jun/30/ticker-mts-chief-jablonski-railroaded/
May 13, 2014 Reactivation of the “Desert Line” Given Boost. The South County Economic Development Council has voted to support the reactivation of the San Diego Arizona Eastern Railway. Support of the “Desert Line” followed a presentation by Karen Landers, general counsel for San Diego Metropolitan Transit System, owner of the right of way, and Donald Stoecklein, CEO of Pacific Imperial Railroad Inc., the operator of the Desert Line. The geographic location of the Desert Line impacts the northwest part of Mexico (primarily Mexicali and Tijuana) and Southern California, including South County, which sits in the heart of the California-Baja California bi-national region. This border region and the border crossings associated is considered the busiest border crossing in the world by some experts. The re-opening of the Desert Line should assist in the elimination of some of the inefficiencies at the border crossing, which, according to the recently published Global San Diego Export Plan, result in “an annual loss of more than $1.3 billion. scroll down http://www.sandiegometro.com/2014/05/daily-business-report-may-13-2014/
5/12/2014 Southern California economic development council backs Desert Line reactivation. South County Economic Development Council (SCEDC) board members recently voted in favor of supporting the reactivation of the San Diego Arizona Eastern Railway, or Desert Line, in Southern California and northwestern Mexico. The vote followed presentations by the San Diego Metropolitan Transit System (MTS), which owns the right of way, and Pacific Imperial Railroad Inc. (PIR), which would operate the Desert Line under a 99-year lease with MTS. The presentations reviewed the economic impact of reopening the line, and the status of ongoing inspections, certifications and reconstruction work on 57 bridges and 17 tunnels. To upgrade the 70-mile Desert Line — which runs between the U.S.-Mexico border at Division and connects with a Union Pacific Railroad line in El Centro, Calif. — track and ties also will be replaced. The border region and associated border crossings are considered the busiest in the world by some experts, said PIR Chief Executive Officer Donald Stoecklein in a press release. Reopening the Desert Line would help eliminate some of the inefficiencies at the border crossing, he said. "The support of SCEDC is another step in facilitating the rail project, which connects the Maquilatropolis region of Baja California, to the Eastern United States," said Stoecklein. Added SCEDC President and CEO Cindy Gompper-Graves: "Reopening the Desert Line will help expedite the import-export process for cargo without compromising national security." http://www.progressiverailroading.com/short_lines_regionals/news/Southern-California-economic-development-council-backs-Desert-Line-reactivation--40405
May 9, 2014 The proposed reopening of a old railroad line stretching from Imperial County through Mexico to San Diego won key support Thursday from South County Economic Development Council. Pacific Imperial Railroad is planning to reopen the old Desert Line to serve the Mexican manufacturing facilities, known as maquiladoras, that are host to major American and international exporters, including Toyota, Hyundai, Mattel, Bose and Samsung. The line runs from Plaster City in Imperial County to Tecate in Mexico. “South County EDC and its members have historically been champions of finding more effective ways to move people and goods across the border,” said Cindy Gompper-Graves, president and CEO of the EDC. “Reopening the Desert Line will help expedite the import-export process for cargo without compromising national security,” The EDC’s board of directors voted to support the project, and also heard a detailed presentation from the San Diego Metropolitan Transit System, owner of the right of way, about the steps necessary to re-open the line. Work is needed on 57 bridges and 17 tunnels, as wells as replacement of track and ties along the 70-mile track. In his April visit with the EDC, U.S. Customs and Border Protection Commissioner R. Gil Kerlikowske said that if the railway is reopened, the federal government would absorb the cost of staffing at the port of entry. “The support of SCEDC is another step in facilitating the rail project, which connects the ‘Maquilatropolis’ region of Baja, California, to the Eastern United States,” said Donald Stoecklein, CEO of the railroad company. The line originally opened in 1919, but fell into disrepair in the 1980s. It includes the 186-foot-tall, 630-mile-long Goat Canyon Trestle, a historic Civil Engineering Landmark. http://timesofsandiego.com/business/2014/05/09/reopening-cross-border-rail-line-gets-south-county-support/ http://www.rtands.com/index.php/freight/shortline-regional/desert-line-receives-support-from-south-county-edc-board-members.html
April 21, 2014 Would-be railroad barons face steep grade. Note to MTS: Backers of Pacific Imperial Railroad have controversial past. By Dorian Hargrove, April 21, 2014 http://www.sandiegoreader.com/news/2014/apr/21/ticker-would-be-railroad-barons-face-steep/ “[Pacific Imperial Railroad] asked us to renew the lease in order for them to raise funds and we did. And, as of this time, that lease is in good standing,” MTS CEO Paul Jablonski said at the April 15 board meeting of the San Diego and Arizona Eastern Railway, the nonprofit that manages the Desert Line. Also at the meeting were Pacific Imperial Railway’s newest CEO, Donald Stoecklein; former president and now self-professed “consiglieri” to management, Charles McHaffie; and Daren Barone, a large shareholder who has been tasked with working with Mexican officials. Earlier in the meeting, the trio reiterated their commitment to getting the binational railroad on track and to dispel any allegations of fraud and money laundering from former management. McHaffie and Stoecklein’s colleague Daren Barone, the man in charge of working with officials in Mexico, has also been involved in his share of controversy. In 2013, Pacific Imperial's boardmembers, including Barone, entered into an $8.5 million contract with Watkins Environmental Incorporated to perform environmental remediation and construction on the the line. “Under the agreement,” reads a press release from Business Wire, ”Watkins will provide needed reconstruction concurrent with the inspections provided by JL Patterson and Associates, which cover 57 bridges, inspect 17 tunnels and approximately 70 miles of track, in compliance with PIR’s agreement with the San Diego Metropolitan Transit System (MTS) and PIR’s plan to commence operations in 2014.” But the work never commenced. And, according to a receptionist at Watkins, no contract is in place. Barone is a longtime business partner of Watkins, dating back to the early 1980s. As was reported by the Reader, Stoecklein and McHaffie are no strangers to controversy. Dozens of lawsuits have been filed against attorney Stoecklein and businessman McHaffie. Most recently, the duo was accused by the Neighborhood Market Association’s Mark Arabo and two of his colleagues of scamming them out of $400,000 in a deal to purchase the restaurant formerly owned by Junior Seau. But soon after entering into negotiations the investors were told the deal had fallen through but not before more than one hundred thousand dollars went missing. When confronted, Stoecklein and McHaffie attempted to convince the investors to put their money in the “lease of a short railroad system that goes from San Diego to Yuma through cross-border agreements they have with Mexico.” Arabo and the other investors declined but not before they say McHaffie and Stoecklein had already spent $145,000. That case is now making its way through court.
April 14, 2014 San Diego and Arizona Eastern Railway to roll? Executive from company to address allegations of fraud. By Dorian Hargrove, April 14, 2014 http://www.sandiegoreader.com/news/2014/apr/14/ticker-san-diego-and-arizona-eastern-railway-roll/
Friday, April 11, 2014 San Diego Regional Chamber of Commerce President Jerry Sanders told local media, "That's one of our top priorities." He added, "It's very complex, obviously, when you have two governments, two state governments, two city governments, and MTS [Metropolitan Transit System]. But I think it can be done." Complications involving freight rail use also exist. MTS in December 2012 leased a portion of the route to short line Pacific Imperial Railroad, which could make temporal separation of freight and light rail operations a necessity to comply with safety requirements mandated by the Federal Transit Administration and, perhaps more important, Federal Railroad Administration. But Sanders said business leaders and political officials in both nations were actively urging establishment of cross-border LRT service, noting the San Diego-Baja rail line was also among the top concerns discussed during a recent trade trip to Mexico City sponsored by the San Diego Regional Chamber of Commerce. http://www.railwayage.com/index.php/passenger/light-rail/san-diego-tijuana-seek-cross-border-lrt.html
Tuesday, April 8, 2014 MTS, the Metropolitan Transit System, leased operation of the Desert Line portion of the rail — from Imperial County to the border near Tecate — to Pacific Imperial Railroad in December 2012. The company currently is assessing reconstruction-needs along the line. Tijuana business leaders are pushing for reconstruction of the rail line on the Mexican side of the border. Baja California governor Francisco Vega de Lamadrid has said its one of his priorities. The San Diego-Baja rail line was also among the top concerns discussed during a recent trade trip to Mexico City sponsored by the San Diego Regional Chamber of Commerce. Some 75 San Diego and Tijuana business and political leaders were on the trip. “We’re seeing more companies want to come here and work on both sides of the border,” chamber president Sanders said, “but the railroad’s really an important issue for almost all of them.” A rail link would improve the shipping potential for cross-border businesses, take trucks off the road and entice shipping firms to choose San Diego’s port over Long Beach or Los Angeles, Sanders said. Despite the business leader’s optimism for having the rail line operational by the end of this year, there’s much work to be done. Among them, an operating agreement must be worked out between the Mexican and U.S. lessees, and a rail station must be built in Mexicali. In addition, Pacific Imperial Railroad has been accused of wrongdoing by former company leaders, the U-T reported recently. Two former CEOs of the company quit after believing they uncovered misconduct. http://www.kpbs.org/news/2014/apr/08/san-diego-baja-rail-line-has-new-boosters/
Chasing the New PIR Locomotives from West Colton to El Centro Part 3 HD Aug 27, 2013 Location 3: We watched the manifest roll by for a final time at the Barioni Boulevard Crossing in El Centro. The train had slowed as it was about to enter the small El Centro Yard. I noticed that the engineer was cracking up as he went by; at this point, I guess it seemed absolutely ludicrous that WE were still chasing this same train after nearly five hours. The locomotives were delivered to their final destination in Plaster City a few days later where they are awaiting some minor repairs before they are put into service by PIR. https://www.youtube.com/watch?v=1T6KxmnT8wQ
April 03, 2014, Room for more freight in San Diego? San Diego & Imperial Valley Railroad (SDIY), a Genesee & Wyoming subsidiary, is the direct recipient of that international traffic. Its 13-mile line from San Diego south to the border terminal of San Ysidro, Calif., bridges the gap between BNSF and Mexico’s Baja California Railroad (BJRR). SDIY also handles minor freight traffic on a branch from San Diego northeast toward El Cajon. Both segments of SDIY’s operation are on trackage shared with San Diego Metropolitan Transit System light rail trains. BNSF interchanges an average of 15 cars per day with the SDIY. During 2013’s fourth quarter, SDIY moved 1,301 carloads, of which 1,119 were carloads terminating or originating in Mexico. Pacific Imperial Railroad says its Desert Line is “uniquely positioned to service approximately 800 manufacturing facilities in proximity to the rail,” including the Toyota factory near Tecate. Such commerce would enter the U.S. and move east via PIR to a connection with UP, or west via PIR’s connection with BJRR. Moving west would mean access to San Diego, as well as a potential reach to the Los Angeles area via BNSF. However, overhead trolley wire between San Ysidro and San Diego may pose a restriction against high-profile cars such as auto racks. http://www.railwayage.com/index.php/freight/short-lines/room-for-more-freight-in-san-diego.html
April 03, 2014 Pacific Imperial Railroad, Inc. (PIR) announced today that it has entered into a strategic advisory agreement with Diamond Capital Advisors, LLC (“Diamond”) in connection with raising up to $150 million. Under the agreement, the funds raised will provide PIR with the capital required to repair bridges and tunnels, and replace track and ties on the 70 miles of railroad track between the US/Mexico Border and connecting with Union Pacific Railroad at El Centro, California. “We are extremely excited to have Diamond, a recognized leader in capital formation, as a key advisor and an integral part of our PIR team,” said PIR CEO, Donald J. Stoecklein. Gary Ferrell, Managing Director at Diamond, stated, “We are very pleased for the opportunity to participate in what we consider one of the most important investment opportunities in the Southern California region today.” Mr. Ferrell additionally indicated that Diamond understands the significance of providing the required capital to the PIR project, creating an operational rail system on the old Desert Line, allowing for the economic transportation of significant volumes of freight from the Maquilatropolis® region of Baja, California. ABOUT DIAMOND CAPITAL ADVISORS, LLC Headquartered in Los Angeles, California, Diamond is a premier middle market investment-banking group that provides financial advisory and investment banking services to a diverse client base, with securities cleared through Aaron Capital Inc., a member of FINRA and SIPC. ( www.diamondcapadvisors.com ). http://www.marketwatch.com/story/pacific-imperial-railroad-inc-enters-into-150-million-investment-banking-agreement-with-diamond-capital-advisors-llc-2014-04-01?reflink=MW_news_stmp http://www.progressiverailroading.com/short_lines_regionals/news/Pacific-Imperial-Railroad-forges-pact-to-acquire-infrastructureimprovement-capital--39983
Mar 30, 2014 Critics worry railroad firm is off track. MTS has given 99-year lease to open Campo-to-Plaster City line. Four senior executives have left the company granted the 99-year lease. They include CEO Ernest Dahlman, hired in early 2013 to raise millions of dollars needed to get the line operating, and President David Rohal, a veteran railroad executive who was hired in December. Both quit after they believed they had uncovered wrongdoing, including $1 million in payments to a Nevada company that is owned by one of the principal shareholders in Pacific Imperial. Rohal was so disturbed that he contacted the FBI with the information, according to documents obtained under the Public Records Act by U-T Watchdog. The company’s current CEO, San Diego lawyer Donald Stoecklein, denied those allegations, saying the payments were legitimate loan repayments to the Nevada firm. He also said that the displaced managers are scheming themselves to take over the line. http://m.utsandiego.com/news/2014/mar/29/pacific-imperial-railroad-mts-contract-trouble/
Dahlman and Rohal first met and became interested in the Mega Region when originally recruited to form a management team for the dormant Pacific Imperial Railroad (PIR) in San Diego. Dahlman and Rohal left PIR in early February 2014 to form their own organization. Read more here: http://www.heraldonline.com/2014/03/24/5798896/veteran-industry-executives-combine.html
Jan 14, 2014 - San Diego Association of Governments http://www.sdmts.com/MTS/documents/2014-1-14SDAEFINALPKG_004.pdf
June 21, 2013. San Diego, CA –The Pacific Imperial Railroad, which plans to revitalize the Desert Line from Imperial County to Mexico-based manufacturing sites, has reached several major milestones in its agreement with the Metropolitan Transit System. The latest milestone was a $500,000 lease payment to MTS for freight railroad rights on the 69.9 mile Desert Line between Plaster City, Calif., and the border with Mexico at Tecate. “We are encouraged by the progress this group has made to transform a historic rail line into a viable economic engine for the region,” said Paul Jablonski, Chief Executive Officer of MTS. Since the MTS Board of Directors approved the Desert Line operating agreement with PIR in December 2012, PIR has submitted a proprietary business plan and reconstruction plan. The $500,000 lease payment, which was due July 1, 2013, was submitted on June 11. PIR will now proceed with its reconstruction plan that includes an assessment of the condition of 57 bridges and performing necessary repairs. Upcoming milestones are the completion of initial repairs on the rail line (December 2013) and the testing of trains (January 2014). The line is expected to have limited operations within three years and have full scale operations in five years. MTS is scheduled to receive another $500,000 lease payment on January 1, 2014, and $1 million or 15% of gross operating revenue in every year of the lease, which can be up to 99 years. The Desert Line was originally built by John D. Spreckels beginning in 1906. It was completed in 1919 at a cost of $18 million. Once repairs are complete, the Desert Line will provide a much needed link for supply and finished products between the United States and Mexico. MTS operates more than 90 bus routes and three Trolley lines on 53 miles of double-tracked railway. The system generates about 300,000 daily trips. For more information on how you can use public transportation and save money, go to www.sdmts.com. http://sdmts.com/MTS/PacificImperialRailroadReachesMajorMilestonesPays500000LeaseforDesertLine.asp
MTS Board Meeting reports
Tuesday, October 21, 2014 - 9:00 a.m. http://www.sdmts.com/MTS/documents/2014-10-21SDAEFINALPKG.pdf
April 15, 2014 http://www.sdmts.com/MTS/documents/2014-7-15SDAEFINALPKG.pdf Don Jones, Trains Magazine
Jan 14, 2014 - San Diego Association of Governments http://www.sdmts.com/MTS/documents/2014-1-14SDAEFINALPKG_004.pdf
Oct 10, 2013 http://www.sdmts.com/MTS/documents/2013-10-10.pdf
Jun 20, 2013 http://www.sdmts.com/MTS/documents/2013-6-20.pdf
Feb 21, 2013 http://www.sdmts.com/MTS/documents/2013-2-21_000.pdf
Jan 15, 2013 - Report on San Diego and Imperial Valley (SD&|V) Railroad. http://www.sdmts.com/MTS/documents/2013-1-15FinalPkg_000.pdf
May 17, 2012 MTS Board of Directors Meeting. see agenda item 9: assignment of CZRY to PIR http://www.sdmts.com/MTS/documents/2012-5-17BoardPkg.PDF
The Desert Line: PIR falls into default on its lease. Jul 03, 2014 7:25 PM http://www.kusi.com/story/25939826/the-desert-line-pir-falls-into-default-on-its-lease
The Desert Line: Congress demands answers. Updated: Jun 30, 2014 11:14 PM PDT http://www.kusi.com/story/25911257/the-desert-line-congress-demands-answers
The Desert Line: Experts weigh-in Updated: May 01, 2014 http://www.kusi.com/story/25398124/the-desert-line-experts-weigh-in
KUSI went to the man who run MTS, the landlord of the Desert Line, to ask him why. Paul Jablonski refused our efforts to get him to speak on-camera, but he did agree to speak with us on the record. What does he make of the owners of Pacific Imperial? Jablonski told us he sees McHaffie as a man with a grand vision for the railway, someone willing and able to wrest control of it from the prior group, the Carrizo Gorge Railway.
Jablonski went on to say leasing the line to McHaffie and Jory's company was, quote, "our best option." He explained it like this: "rather than stay embroiled in the back-and-forth of the prior company, we cleaned up the contract to have clear milestones of performance."
"Ultimately, you want to be able to move 400 cars a day," continued Stoecklein.
Jablonski's confidence in that promise seems firm. He says PIR has kept its promise to pay its first $1 million annual lease installment and it has met its milestones. As to the stories of misuse of funds, Jablonski says "we have no knowledge of an improper use of funds or any violation of law by PIR."
Indeed, MTS just ruled to reject Rohal and Dahlmen's request for a partnership to run a railroad on the Desert Line, stating "MTS will not negotiate new leases with anyone while its contract with Pacific Imperial is in force."
KUSI News just learned Pacific Imperial Railroad is now announcing it has entered into an agreement with a Los Angeles firm called Diamond Capital Advisors to raise up to $150 million to repair bridges and tunnels, replace track and ties on the 70 miles of railroad track between the U.S./Mexico Border, and connecting it with Union Pacific Railroad at El Centro, California. Under scrutiny, PIR appears to be acting quickly to raise the funds they need to keep the contract. Its detractors have so far lost on all fronts. And MTS sits back, collects its million dollars per year and watches to see whether the railroad to nowhere ever turns into the vision its builder - San Diego industrialist John Spreckels - had so many years ago. http://www.kusi.com/story/25149863/the-desert-line-railroad-to-nowhere-mts-weighs-in
At the end of KUSI's interview, Stoecklein reached across the table and handed over Pacific Imperial Railroad's confidential management report to its board of directors. Among other things, it's an indictment of the company's detractors. In it's 197 pages, the new PIR leadership lays out its case: the old leadership (Dahlmen and Rohal) abused their privileges, exceeded their authority, mismanaged money, and tried (and failed) a hostile take-over of the company - all while failing to meet self-imposed deadlines for bringing in investment funding. So there are the charges and counter-charges between people competing for control of the coveted Desert Line Railroad. http://www.kusi.com/story/25135742/the-desert-line-a-train-to-nowhere-part-two
Railroad bosses have spent most of the century trying to get the Desert Line up-and-running. Now, a pair of Las Vegas land-and-stock speculators have come to San Diego and, despite their checkered histories and the fact they (and their companies) have never run a single train, they somehow managed to persuade the Metropolitan Transit System to give them the lease for what may be one of the most valuable rail lines in all of North America. The company is called Pacific Imperial Railroad. You probably haven't heard of it because it has never run a single train. What's more, its owners are the targets of lawsuits dating back years.
The Desert Line; seventy miles of track; a century of trouble. It was 1904 when industrialist John Spreckles envisioned a rail line from San Diego Harbor to the rest of the nation, commencing at Campo, and crossing the barren desert, all the way to Plaster City near El Centro.
Beset by calamity after calamity, including World War I, it was known as the impossible railroad, engineered through some of the most treacherous terrain ever traversed. Fifteen years later in 1919, Spreckles drove the Golden Stake on the last transcontinental railway built in America.
For decades, hundreds of tons of freight moved along the line, but the Southern Pacific Railroad let it fall into disrepair and tried to abandon it - selling it in 1979 to what is now the Metropolitan Transit System. MTS bought the tracks for the trolleys that move people around San Diego, and with those tracks, the old Desert Line to be used for its original purpose: moving freight.
The Public Transit Agency granted a 99 year lease to a private company now known as Pacific Imperial Railroad, and that's where the story begins.
"It's an after-thought," said David Rohal, a Yale-educated career railroad man and former Senior Vice President and COO of Rail America. "It's seventy miles from San Diego. It's out-of-sight. It's out-of-mind."
Rohal came to San Diego in 2013 to run PIR from the rails up.
"San Diego is sitting on top of a neglected asset. It is ready to be rebuilt, it is ready to connect the economy of a mega-region with the markets of the United States."
Rohal joined forces with New York investment banker Ernie Dahlmen, whose resume includes building transportation businesses. Dahlmen says he signed on as CEO of Pacific Imperial to tap Mexico's economic growth.
"One of the things that is rattling the economic growth, is the fact that they have 3,000 trucks crossing the border a day, that are experiencing delays," stated Dahlmen. "So a railroad that could solve that, with logistics of rail versus truck, seem incredibly appealing."
Both men say it was the 99 year lease contract with MTS that attracted them and prospective investors.
"I went with (Dahlmen) to Wall Street, we met with the people who have the hundreds of billions of dollars to put to work and they were excited about the project, the management team. They wanted this vision to happen," said Rohal.
Within weeks though... signs of trouble.
"I had garnered a lot of institutional and individual interest in this railroad. A lot of it kept coming to a full stop. I didn't understand why," explained Dahlmen.
Dahlmen says a would-be investor sounded an alarm.
"It was the day before Thanksgiving; he was planning on funding, and he came back and said 'Ernie, I'm really sorry to tell you this, but we've looked into the ownership group and the stuff that we've found has raised some grave concerns. We're not sure if we'll be able to move forward.'"
Prompted by a private investigation firm's report, obtained by KUSI News, Rohal and Dahlmen turned their attention away from building PIR to investigating its owners. The report cites scores of lawsuits naming PIR and its owners, Charles R. McHaffie and Dwight W. Jory, from plaintiffs contesting McHaffie and Jory's control of the railway to its board's decisions, shareholders' voting rights, and distribution of stock. The report went on to reveal legal judgements against McHaffie for failure to pay federal payroll taxes, as well as failed real estate projects in San Diego and beyond. And there was one lawsuit, filed by the ex-wife of the late Chargers star linebacker Junior Seau. Gina Seau claimed she loaned McHaffie $2.5 million for the railroad and he spent the money somewhere else. The suit was dismissed, but Seau has reportedly never seen her money since.
"The background of the people that own the paper is terrible. They have never been a part of a successful business," said Rohal. "They have been responsible for dozens of businesses, all of which have failed.
There are potentially billions of dollars in international commerce at stake here, and critics say it is folly and foolish to put this railroad into the hands of these two individuals. What is Pacific Imperial Railroad's response to the accusations? Tuesday, on The KUSI News at 6 and 10 PM, part two of a three-part series of reports. A prominent San Diego attorney, who is the new CEO of the railroad, takes the tough questions. He also has some scathing accusations of his own. http://www.kusi.com/story/25124362/the-desert-line-a-train-to-nowhere
Special Report preview: Railroad to nowhere? The Desert Line. Built nearly a century ago, industrialist John Spreckles overcame treacherous terrain and countless calamities to open the last intercontinental railway in America. Decades of neglect allowed it to crumble and forced manufacturers to truck billions of dollars worth of product through a log-jammed border crossing. A new effort is rolling, to bring the Desert Line back to life. "San Diego is sitting on top of a neglected asset," said former company president David Rohal. "I don't think this opportunity would exist, either for me or the region of San Diego, had they not pursued it so tenaciously," said Donal Stoecklein, CEO of Pacific Imperial Railroad. The Desert Line's landlord -- the Metropolitan Transit System -- awards a 99-year lease to a new railroad company to rebuild the tracks and turn them into an international shipping line. The railroad company's owners use the lease as a calling card to attract tens of millions of investment dollars. Then, former corporate leaders make damning allegations against the owners. "I had garnered a lot of institutional interest and individual interest in the railroad" said former company CEO Ernie Dahlman. "A lot of it kept coming to a full stop and I really didn't understand why." "The background of the people who own the paper is terrible," said Rohal. Could the new railroad company itself become the next calamity to doom the Desert Line? "I think the business background of the owners and management always has an impact on raising funds, especially from institutional investors," Stoecklein said. "I don't think, in this case, it's going to be a significant issue." San Diego's public transportation utility, now responsible to decide whether a pair of Las Vegas speculators can bring the Desert Line back to life. http://www.kusi.com/story/25118456/special-report-preview-railroad-to-nowhere
San Diego and Arizona Railway
- The company charter was executed on December 14, 1906
- completion of the line November 15, 1919
- Damage to the lines from both natural disasters and sabotage exerted great financial pressure on the company, and in 1932 Spreckels' heirs sold their interests in the railroad to the Southern Pacific
ref, about and links
Historical Desert San Diego and Arizona Railroad. The Impossible Railroad and Carrizo Gorge. http://www.desertusa.com/mccain/oct_sdazrr.html
The Goat Canyon Trestle of Carriso Gorge https://www.youtube.com/watch?v=3ryHquaDpl4
San Diego & Arizona Eastern (SD&AE) Railway
about, ref and links
Carrizo Gorge Railway. A Ride on the Impossible Railway. by Ryan Weaver http://www.desertusa.com/mag08/sept08/corrizo-gorge-railway.html
- The company took over the SD&A's operations in February 1933 after financial troubles led John Spreckels' descendants to sell their interests in the railroad to the Southern Pacific. Through the years natural disasters and vandalism rendered sections of the line unserviceable, and portions of the line have been sold to various interests.
- May 5, 1965 Coors piggyback and yellow box car derailed.
- In 1967 the railroad reported 46 million ton miles of revenue freight on its line.
- San Diego & Arizona Eastern's Carrizo Gorge After abandonment following Tropical Storm Kathleen in August, 1976 http://members.trainorders.com/cimascrambler/carrizo_gorge/index.htm
- August 20, 1979: San Diego's Metropolitan Transit Development Board (MTDB) purchases the SD&AE Railway Company in restored condition for $18.1 million (the SP retains ownership to the Plaster City to El Centro segment). The ICC approves operation of freight service by Kyle Railways under contract to MTDB. The MTDB reorganizes the SD&AE as a Nevada nonprofit corporation.
- Genesee & Wyoming Inc. (G&W) (aka Kyle Railways) owns short line and regional freight railroads in the United States, Canada, Australia, the Netherlands and Belgium. Our subsidiaries provide rail service at 37 ports in North America, Australia and Europe and perform contract coal loading and railcar switching for industrial customers. In addition, G&W Australia operates the Tarcoola to Darwin rail line which links the Port of Darwin with the interstate rail network in South Australia. Operations currently include 112 railroads organized in 11 regions, with more than 15,000 miles of owned and leased track. http://www.gwrr.com/about_us
- January 1980: Washouts caused by desert storms displace parts of the SD&AE Desert Line and S-BC Tijuana y Tecate lines, in both the US and Mexico.
- January 1983: With the Mexico damage repaired, Kyle Railways begins rail shipments between San Diego and Plaster City.
- June 18, 1983: Fire destroys two (2) bridges on the Desert Line.
- April 25, 1984: The ICC denies Kyle Railways’ request to abandon the railroad.
San Diego and Imperial Valley Railroad (SDIV)
Matt Domen, General Manager
Carrizo Gorge Railway
- July 4, 1997: Lakeside based Carrizo Gorge Railway, Inc. (CZRY) is formed to operate and repair the Desert Line.
- Gary Sweetwood with help from three investors, spent the following seven years and thousands of dollars digging out miles of buried railroad track and clearing tunnels. By 2004, Carrizo Gorge Railway had opened, at one point hauling 20 rail cars a day, mostly sand, from Plaster City in Imperial County westward to the border. Yet profits from freight weren’t enough to keep up with the cost of maintaining the line. According to a fourth-quarter summary report submitted to the Metropolitan Transit System, gross income from shipments of sand totaled $329,205, whereas expenses were $265,439 and maintenance costs for ties, joints, and payroll amounted to $227,919, resulting in a $164,153 net loss for that quarter.
- Michael Reading: part of the Original Carriso Gorge Railway Inc(CZRY)., I was part of the team that got the SD&AE Railroad opened and running again in 2004. This was before the McHaffie/Jory engineered takeover of CZRY and subsequent PIR coming into existence. We managed to get the line reopened using our own money.
- Carrizo Gorge police chief Mark Langlais
- conductor Matt Adams
- engineer Mike Reneau
- April 13, 2002 Trip Report : Carrizo Gorge Hike http://www.silogic.com/cg/Carrizo_Gorge.htm
- test train through Gorge February 2004 http://youtu.be/eZknykgEl3I?list=UUFmMgjYkAE_pHtPyreHQiew
- March 13, 2004 Carrizo Gorge Railways 102 in the desert near Dos Cabezas http://www.railpictures.net/viewphoto.php?id=53656
- April 11, 2004 Carrizo Gorge Railways (CZRY) F7(A) #100 on Goat Canyon trestle http://www.railpictures.net/viewphoto.php?id=57442&nseq=19
- September 05, 2004 UP 1398 (leased by CZRY) shoving a tractor to scoop sand near Dos Cabezas http://www.railpictures.net/viewphoto.php?id=77072&nseq=0
- James Warner onetime CEO and attorney
- In 2005, Carrizo Gorge entered an operating agreement with Union Pacific to move additional freight from Imperial Valley into Mexico. To buy some needed time, management searched for investors. They hired ex–San Diego city council member Byron Wear to work as a consultant and to use his contacts to locate money. Later that year, a local doctor, Robert Strauss, loaned Carrizo Gorge $300,000 to be repaid in three years at 7 percent interest. Gary Jacobs, the eldest son of Qualcomm founder Irwin Jacobs, invested $400,000; Corky McMillin added $250,000 before he died in 2005. Wear managed to find even more investors by the names of Charles McHaffie, Sheila LeMire, Dwight Jory, James Warner, and, later, Donald Stoecklein. Their entrance marked the beginning of the end for Carrizo Gorge Railway. http://www.sandiegoreader.com/news/2014/sep/10/cover-crazy-train/
- 2008 http://forums.mtbr.com/california-socal/carrizo-gorge-ko-pah-400454.html
- McHaffie was on the losing side of another court battle, one brought against him by the federal government for failing to pay $360,000 in payroll taxes when he was the principal for Carrizo Gorge Railway.
ref and links
Carrizo Gorge Railway. A Ride on the Impossible Railway. by Ryan Weaver http://www.desertusa.com/mag08/sept08/corrizo-gorge-railway.html
East County Dirt Works
East County Dirt Works, Incorporated filed as a Articles of Incorporation in the State of California on Monday, November 02, 1998 and is approximately sixteen years old, according to public records filed with California Secretary of State. The filing is currently active as of the last data refresh which occured on Sunday, April 06, 2014.
Gary Sweetwood serves as the President and has interests in other corporate entities including Champion Diesel Sales & Service, LLC located in Lakeside, CA . Gary's past corporate affiliations include Cg International Aggregates, Inc., Elmer Sweetwood & Sons, Inc. , and Sweetwood & Shaw Combined Services, Inc.
Gary Sweetwood is also the registered agent for the company. Also known as a statutory or resident agent, the registered agent is responsible for receiving legal notifications regarding court summons, lawsuits, and other legal actions involving the corporate entity. http://www.corporationwiki.com/California/Lakeside/east-county-dirt-works-incorporated/43014896.aspx
Tijuana y Tecate (TyT), Baja Railroad, Mexico
Administradora de la Vía Corta Tijuana-Tecate (ADMICARGA) a State Government Agency. http://www.fcbc.com.mx/Concessionaire.htm
San Ysidro Border https://goo.gl/maps/vGN9C
Gas y Anexas, La Mesa https://goo.gl/maps/zdJZE
Garcia, Del Ferrocarril 5, BC, Mexico https://goo.gl/maps/PQ123
Cortina de la presa, Presa Rodríguez, La Presa, Tijuana https://goo.gl/maps/Ba9fD
crossing, Camino Vecinal, Tijuana, BC, Mexico https://goo.gl/maps/dwc3e
gas plant https://goo.gl/maps/X7vRE
Redondo Loop https://goo.gl/maps/VUVOI
Industrial Park, Carretera Federal 2 Tecate, BC https://goo.gl/maps/tx9ZM
Tecate Brewery Presidente Venustiano Carranza, Primera, BC, Mexico https://goo.gl/maps/gLGgF
Steelyard, Culiacan, Industrial, Tecate, BC, Mexico https://goo.gl/maps/oZQ2F
Tecate Industrial Park, Paseo José María Morelos y Pavón, BC, Mexico https://goo.gl/maps/KHnud
Published on Feb 12, 2013 TREN DE CARGA DE GAS DESCARRILA EN TIJUANA FREIGHT TRAIN OF GAS IN TIJUANA derails https://www.youtube.com/watch?v=bSaY0OvQrIM https://www.youtube.com/results?search_query=TREN+DE+CARGA+DE+GAS+DESCARRILA+EN+TIJUANA https://www.youtube.com/watch?v=OwEOqDhiiwQ
Repair of railroad routes "Via account Tijuana - Tecate" https://www.youtube.com/watch?v=0vMoTwLxPi8
tren tijuana tecate.mpg Engine 3820 Travel by Train -Tecate Tijuana, Baja California. https://www.youtube.com/watch?v=8297OnCVDwE
Baja California Railroad Inc.(Español) https://www.youtube.com/watch?v=kqw3orD543o
End of an era, Carrizo Gorge Railway, Inc. (CZRY) has temporarily suspended it's commercial freight operations on it's Desert Line Sub, so it will return the two borrowed GP60's (2034 & 2072) and one GP38-2 (2556) to UP via the San Ysidro, CA interhcange with SDIY and BNSF. This is the reason why CZRY is leasing two GP38-2's from GATX/GMTX to keep running the Tijuana-Tecate line handling commercial freight. This video shows the two leasers together which lasted for two weeks on a typical local freight in downtown Tijuana, B.C. MX https://www.youtube.com/watch?v=3e9zBXAPDgc
Pacific Imperial Railroad
- September 11, 2009 The SD&AE/TyT is basically under three operators. Hector M. Gonzalez Tijuana, B.C. http://www.westcoastrailforums.com/thread-992-post-24308.html#pid24308
- February 10, 2010
- February 10, 2010
- February 10, 2010 https://www.flickr.com/photos/cleopatra69/8562821147/
- March 14, 2010 https://www.flickr.com/photos/kdough/4436296833/in/album-72157623504374713/
- May 2010 F7 at Plaster City, scroll down http://cs.trains.com/trn/f/741/t/165140.aspx?page=2#1922832
- August 2010 According to a “Notice of Penalty” obtained by the Reader, in August 2010, Carrizo Gorge Railway was slapped with a $1.6 million dollar fine after Customs and Border Protection officers discovered 202 pounds of marijuana stashed in an empty railcar. Carrizo Gorge Railway has since changed its name and is now known as Pacific Imperial Railroad; however, the principals for that company have remained the same. "On August 23, 2010, Carrizo Railway Inc. manifested railcars BNSF 469335 and BNSF 473568 as empty railcars entering the U.S through the Otay Mesa Railyard. Inspection by CBP officers revealed 91.8 kilograms of Marijuana concealed in the bottom of the hoppers," reads the Notice of Penalty received on October 4, 2010.
- 49 box cars stored at Coyote Wells sometime between May 2012 and June 2012 as seen on Google maps streeview.
about, ref and links
DEPARTMENT OF TRANSPORTATION Surface Transportation Board [Docket No. FD 35657] Pacific Imperial Railroad, Inc.—Change in Operator Exemption—Rail Line of San Diego and Arizona Eastern Railway Company Pacific Imperial Railroad, Inc. (PIR), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to change operators, pursuant to an agreement with Carrizo Gorge Railway, Inc. (CGR),1 from CGR to PIR over a 70.01-mile rail line between milepost 59.60 in Division, Cal. and milepost 129.61 in Plaster City, Cal. (Desert Line).2 The Desert Line is owned by San Diego and Arizona Eastern Railway Company (SD&AE). The agreement provides for a change in operators for the Desert Line through CGR’s assignment of its authority to operate the Desert Line to PIR, with the consent of SD&AE, its parent, San Diego Metropolitan Transit Development Board, and SD&IV. The transaction may be consummated on or after August 31, 2012 (30 days after the notice of exemption was filed). PIR certifies that its projected annual revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier and further certifies that its projected annual revenues will not exceed $5 million. If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than August 24, 2012 (at least 7 days before the exemption becomes effective). An original and 10 copies of all pleadings, referring to Docket No. FD 35657, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, one copy of each pleading must be served on Thomas F. McFarland, 208 South LaSalle Street, Suite 1890, Chicago, IL 60604. http://www.gpo.gov/fdsys/pkg/FR-2012-08-17/pdf/2012-20260.pdf
- Donald Stoecklein, CEO of Pacific Imperial Railroad Inc.
- Charles R. McHaffie
- Dwight W. Jory
- Sheila LeMire, McHaffie's former girlfriend
- Daren Barone, a large shareholder who has been tasked with working with Mexican officials
- spokesperson Jack Berkman
- David Arganbright its Senior Vice President of Corporate Development.
- Jeffrey Kinsell, owner and partner of of Kinsell Newcomb & De Dios
- Daniel Neveau
- Ernest Dahlman CEO, hired in early 2013
- David Rohal, President, a veteran railroad executive who was hired in December
- Gary Sweetwood, president
- International Railroad Investment Fund (aka Camden Healthcare) established by Stoecklein in October 2011, Headquartered in Las Vegas, the company's first action was to issue 110,000,000 shares at a price of $.001 per share.
- Locati Global Holdings. incorporated around the time of Pacific Imperial Railway, was created by Dwight and Theodora Jory. Its home base is headquartered in Henderson, Nevada.
- Gold Mountain North LLC, also founded by the Jorys back in 2004.
- Public Private Equity Group LLC. June 2013, launched by McHaffie, Stoecklein, and Dwight Jory, among the company's first action was to issue 110 million shares, valuing them at $.001 per share.
- AC Funding, $1.1 million in payments made to A C Funding, a Nevada corporation with a corporate officer named Dwight Jory.
- CC Trust
- Pacific Imperial Railroad Inc. (PIR) has entered into a strategic advisory agreement with Diamond Capital Advisors L.L.C. to raise up to $150 million for infrastructure improvements. Under the agreement, the funds will help PIR repair bridges and tunnels, and replace track and ties on 70 miles of track between the U.S./Mexico border and a connecting Union Pacific Railroad line in El Centro, Calif. The capital will enable PIR to create an operational rail system on the old Desert Line and build significant volumes of freight from the Maquilatropolis region of Baja, Calif., said Diamond Capital Managing Director Gary Ferrell in a press release. 4/3/2014 http://diamondcapadvisors.com/about/our-team/
- Watkins Environmental Inc http://www.bbb.org/san-diego/business-reviews/asbestos-removal-service/watkins-environmental-inc-in-san-diego-ca-172002455 Mr. Greg Watkins, President Mr. Damon Barone, Chief Operating Officer
Stoecklein claims that one of those companies, Gold Mountain North LLC, a company started by Jory and his soon-to-be wife, Theodora, brought a major asset to the deal, a $550 million property in Mexico known as Rancho Tembabichi. The property, states Stoecklein, is "approximately 21,326.73 acres on the Sea of Cortex [sic] in Baja California, Mexico. The primary parcel is 5,685.30 acres, with 12 miles of ocean front, a natural lagoon with an estimated area of 12.36 acres, set on a gentle sloping site with a view of the Sea of Cortez."
- About an hour and a half drive east of San Diego, on an unused stretch of track that is the eastern end of the old Desert Line, we found the only tangible evidence that PIR has done anything to build a railroad. The owners of PIR took $450,000 of investors' money and bought three locomotives from Idaho, Northern, and Pacific Railroad and had them towed there, where they've sat ever since. The only problem with them is: they don't work.
There are a total of 6 paved grade crossings on the Desert line portion of the SD&AE, of which 3 have crossing gates. Two others have crossbucks only and one has nothing. The one with nothing is at about MP 110.98, east of Dos Cabezas. http://www.westcoastrailforums.com/thread-7684-post-86198.html#pid86198
Why did Robert D. (Bob) Jones resign from MTS in April 2013? He's now Pacific Region Senior VP at Genesee & Wyoming Inc., a rail company that purchased Rail America, which Bob Jones had been with since 2002. Rail America had its own story of financial losses
Duncan D. Hunter, United States Representative http://hunter.house.gov http://transportation.house.gov/about/membership.htm
Hill Climbers: Joe Kasper Has Served Two Generations of Hunters http://www.rollcall.com/news/-218522-1.html
Duncan Lee Hunter is an American politician. He was a Republican member of the House of Representatives from California. http://en.wikipedia.org/wiki/Duncan_Hunter
Alternatives and Competitors
LOSSAN Rail Corridor Improvements. During the next 20 years, SANDAG plans to construct nearly $1 billion in improvements in the San Diego segment, including a primary effort to double track the corridor from Orange County to Downtown San Diego. To date, just over half of the San Diego segment has been double tracked. Other infrastructure improvements include bridge and track replacements, new platforms, pedestrian undercrossings, and other safety and operational enhancements. http://www.keepsandiegomoving.com/lossan/lossan-intro.aspx https://lossan.octa.net/AgendaPDF/Sep%2015,%202014%20-%20Board%20Agenda.pdf
Port of Lázaro Cárdenas http://en.wikipedia.org/wiki/Port_of_Lázaro_Cárdenas Kansas City Southern de México http://en.wikipedia.org/wiki/Kansas_City_Southern_de_México
Punto Colonet MegaPort: Here's the back story: The LA/Long Beach ports are very congested as are the rail lines serving them, and this is will not get any better in the coming decades. As a result, the Mexican government wants to capture some of this trade by building a port near the village of Punto Colonet, which is a couple of hours south of Ensenada. They have been awarding concessions for port related projects and land sales have been booming there. U.P. had proposed building a new line from Yuma, AZ south towards San Felipe and over the Baja Penninsula to Punto Colonet. Getting the Mexican goverments help in acquiring the land probably wouldn't be too bad, but farmers around the Yuma area were not happy with the prospect of the U.P. using eminent domain to acquire land on the U.S. side of the border. As a result the farmers protested and subsequently, the U.P. dropped the proposal: http://ympo.org/docs/Punta%20Colonet_1.pdf?ef589d http://westernfarmpress.com/yuma-farmers-skeptical-union-pacifics-move-derail-proposed-new-railroad
Proposed Mexican rail line would link El Paso area with Pacific Coast. August 1, 2014 EL PASO, Texas — A joint Chinese-Mexican venture revealed this week might bring rails from the Pacific Ocean to the international border opposite Union Pacific's newly opened terminal and intermodal yard in southern New Mexico just across the state line from El Paso. http://trn.trains.com/en/Railroad%20News/News%20Wire/2014/08/Proposed%20Mexican%20rail%20line%20would%20link%20El%20Paso%20area%20with%20Pacific%20Coast.aspx
- San Ysidro, 15.0 https://goo.gl/maps/SJAPr
- Division, 59.6 https://goo.gl/maps/j0MQk
- Campo, 65.8 https://goo.gl/maps/eeuK2
- Clover Flat 71.9 https://goo.gl/maps/EqS2v
- Miller Creek 73.5 https://goo.gl/maps/T3GDi
- High Bridge 77.27 https://goo.gl/maps/NKJHC
- Hipass 84.5 https://goo.gl/maps/fRhT4
- Jacumba 92.9 https://goo.gl/maps/PWJ1S
- Titus 94.0 https://goo.gl/maps/H4UzA
- Titus 95.0 https://goo.gl/maps/cjSiA
- Dubbers Spur, 96.0 https://goo.gl/maps/9U0rG
- Mile Post 97 https://goo.gl/maps/mfxha
- Mile Post 98 https://goo.gl/maps/SZTqV
- Horseshoe siding 98.0 https://goo.gl/maps/luNSN
- 99.2 https://goo.gl/maps/i6Lgs
- Carrizo Gorge 100.7 https://goo.gl/maps/QYke4
- Mile Post 100 Tunnel 9W https://goo.gl/maps/qxXiR
- Mile Post 101 Tunnel 12E https://goo.gl/maps/8gISr
- land slip https://goo.gl/maps/hgm0X
- Goat Canyon (Tunnel 15 Spur) 102.3 https://goo.gl/maps/lCKEc
- Mile Post 103 https://goo.gl/maps/XMVn7
- wrecked boxcars https://goo.gl/maps/tYoti
- Mile Post 104 https://goo.gl/maps/CMGwt bridge
- Mile Post 105 https://goo.gl/maps/HgPpC
- Mile Post 106 https://goo.gl/maps/sCced
- Mile Post 107 https://goo.gl/maps/aigoU
- Mile Post 108 https://goo.gl/maps/R36fV
- Mile Post 109 https://goo.gl/maps/txJPo
- The water tower at Dos Cabezas, 109.5 https://goo.gl/maps/hTKhe
- Mile Post 110 end of siding https://goo.gl/maps/GeQxT
- Mile Post 111 https://goo.gl/maps/QKvKj
- Mile Post 112 https://goo.gl/maps/RMp5x
- Coyote Wells 122.5 https://goo.gl/maps/7MjsM
- Plaster City 129.61 https://goo.gl/maps/IR9Ch
- Seeley 139.8
- Wilsie 145.1
- El Centro 147.84
GRAND ISLAND, Neb. – Union Pacific has started an $11 million track project on its double track main line between Grand Island and Gibbon. The project is scheduled to be completed by mid-December. The railroad will replace 78,400 concrete ties and drop 14,400 tons of ballast as part of the project. $420,918 per mile.
Union Pacific is investing $6 million in its branch between Burt and Goldfield in northern Iowa. The railroad will replace 33,000 ties and install 13,300 tons of ballast. In addition, crews will renew the surfaces at 66 road crossings. 3,000 ties per mile so about $500,000.00 per mile for ties and ballast.
http://youtu.be/3ryHquaDpl4?t=1m51s "in the 1920s the break even point was 50 cars per day but the line averaged only 11 per day."
The Goat Canyon Trestle Huell Howser California’s Gold January 08, 1999 https://blogs.chapman.edu/huell-howser-archives/1999/01/08/trestle-californias-gold-1006/
San Diego and Arizona Railway yard at San Ysidro, Blue Line. http://youtu.be/9yLJY-WDzlk
The Goat Canyon Trestle of Carriso Gorge https://www.youtube.com/watch?v=3ryHquaDpl4
Central Oregon and Pacific #3816 on CZRY Uploaded on Aug 25, 2009 Actually it was 2007 Being from Medford it was a shock to see CORP power in the San Diego County area of Jacumba, working for Carrizo Gorge Railway. You can hear Interstate 8 in the background. http://youtu.be/BK1wyxymvaM
Carrizo Gorge Railway http://youtu.be/_xkBPP8_n5k This was made in 2005/06, long before the hostile takeovers occurred and long before PIR ever happened!! I was the engineer on the train, in UP 2072!! The switching shots were done at Campo, with the Mexican crew doing the ground work, I was in the cab. The video crew got a lot of shots following the train between Campo and Jacumba, great shot of the train going over the Campo Creek Viaduct!! They boarded the train at Jacumba and rode with us to Coyote Wells and got off there. We continued on to Seeley to interchange with the UP!!
San Diego and Arizona RR http://youtu.be/id2y3eT5dC8
Your Colorful Southern Pacific Preview - Charles Smiley - TrainVideoDepot.com http://youtu.be/gSqh7oBvJgo?t=2m20s
Hyrail ride on trestle over Highway 94, Campo, Ca. http://youtu.be/K-ZzY9BnN7w
Carrizo Gorge Railkart http://www.youtube.com/watch?v=4wOKZHM0bpQ
Railroad Police (GoPro Hero3+) http://www.youtube.com/watch?v=GYzipfWfrV0
Desert Line Tour http://www.youtube.com/watch?feature=player_embedded&v=FpzGPL47-hQ
Crossing the Famous Goat Canyon Trestle. On March 1st 2014 the Pacific Southwest Railway Museum was given permission to access the Carrizo Gorge to Dos Cabezas at MP 110. We used vintage Fairmont A-5 motorcars. The journey was part of a ferrying move and pre-inspection trip. http://www.youtube.com/watch?v=z5HtxYMICG4&list=UUAFC_KrJHR-HdgNM40vFzNw
freight under wire http://imgur.com/a/ooFN8