Pacific Imperial Railroad
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| - | 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/ | + | 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. |
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| + | 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 | 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 | ||
Revision as of 17:57, 23 April 2014
This page is about the Pacific Imperial Railroad.
Contents |
news
Updates
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.
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 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
KUSI series
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
History
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.
Key People
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
links
http://akronrrclub.wordpress.com/tag/pacific-imperial-railroad/
http://en.wikipedia.org/wiki/Pacific_Imperial_Railroad
http://www.westcoastrailforums.com/thread-7684-page-21.html
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
http://pacificimperialrailroad.com/
http://www.youtube.com/watch?feature=player_embedded&v=FpzGPL47-hQ
