Federal regulators green light CN merger with conditions

Echoing the sentiments of a divided Chicago region, federal regulators issued their final report Friday on the environmental impact of the Canadian National Railway merging with the smaller EJ&E railroad, finding it will ease freight traffic in Chicago and nearby suburbs but cause problems for some towns along the "J."

The report issued by the U.S. Surface Transportation Board gave a list of conditions CN must follow to ease negative impacts of buying the EJ&E but seemed to assume the deal would move forward.

CN is proposing to buy the smaller EJ&E, which runs in an arc between Waukegan and Gary, Ind. It would move freight trains from its lines in Chicago and nearby suburbs onto the EJ&E tracks, which CN contends will ease a bottleneck in the city. However, residents along the EJ&E fear the move will cause traffic, safety problems and environmental hazards.

Reaction predictably followed along the battle lines that have been drawn for a year since CN first announced its intentions.

"I'd like to say I'm surprised, but I'm not the least bit surprised," said Aurora Mayor Tom Weisner. "The (STB) consulting staff has been fairly consistent in disappointing anyone who believes a fair, in-depth analysis of this deal is in order. We've basically seen a rubber stamp here."

"To say (the report) is a disappointment is a huge understatement," Barrington Village President Karen Darch said.

While both Barrington and Aurora have fought the transaction for months, Buffalo Grove is among a number of Cook County communities crossed by CN tracks that endorse it.

The government's voluminous report "leaves no doubt that this was a comprehensive and extensive examination," Buffalo Grove Trustee Jeff Berman said. "This appears to be a very strong recommendation for approval with conditions that are reasonable and take into account the positive and negative effects of the transaction."

Buffalo Grove would stand to gain by the approval since it would see less train traffic. Still, Berman said that while he felt opponents have overstated the potential negatives of the deal, he's glad to see the report address ways to mitigate those effects.

STB planners recommend two grade separations be constructed near Aurora and in the South suburbs on the EJ&E tracks and that CN pay for 15 percent of the cost.

It also sets a five-year monitoring period in which CN would be answerable to the agency to ensure it complies with their suggestions. Other steps include assisting 13 emergency responder facilities along the "J" that might be affected by more trains.

The report is significant but not the final step, as Surface Transportation Board members have yet to vote on it and one representative at least on the three-person panel opposes the merger. As far as timing goes, the report must first be published in the federal register Dec. 12 before a decision is made. Typically, agencies must wait 30 days after publication to rule but the STB is empowered to act before that.

CN officials praised the report, calling it "exhaustive and comprehensive," and urged the board to make a decision quickly. The Canadian railway is facing a Dec. 31 deadline to close the deal with EJ&E's owner, U.S. Steel.

The STB staff's analysis outlines a number of conditions CN needs to follow if the merger is approved.

• Contribute 15 percent toward the Aurora-area and Linwood-grade separations. Cooperate with communities to install warning signs at grade crossings in Hawthorn Woods, Lake Zurich, Barrington and in Plainfield.

• Pay for the installation of video cameras at railway crossings located near hospitals, fire and police departments so train blockages can be monitored. These emergency services include Lake Zurich Rural Fire Protection District Station 3, Barrington Fire Department Station 1, Advocate Good Shepherd Hospital, Bartlett Fire Protection District's future Station 3, West Chicago Fire Protection District Stations 1 and Station 3 and Plainfield Fire Protection District Station 3.

• Notify Fermilab officials in Batavia of changes such as major increases in train speed that could cause significant vibrations.

• Work with Barrington to make improvements so the village can maintain its Quiet Zone designation.

• Appoint an environmental liaison to work with all levels of government to monitor natural resources, such as forest preserves, along the EJ&E tracks for five years.

• Take measures to ensure the habitats of the Indiana bat and Hine's emerald dragonfly, which are threatened species, are not destroyed.

• Avoid construction along tracks within Pratt's Wayne Woods Forest Preserve in northwest DuPage County that would disturb bird nesting.

Regarding one concern, that the merger will kill the proposed STAR line, a Metra commuter line connecting suburbs from Will to Cook counties, the STB concluded the transaction would not hurt it. Metra officials had no comment although they have said the fact CN does not want STAR line trains to use the EJ&E tracks as originally planned could hurt the project.

Planners also noted that CN could have leased the EJ&E tracks to put freight on instead of going through the STB process.

In terms of quality of life, the report somewhat obviously notes that added freights creating more noise "would annoy residents located near the EJ&E line." But it adds that the problem wasn't likely to be great enough to cause people to move.

The Illinois congressional delegation has split on the issue in a bipartisan manner. U.S. Sen. Dick Durbin and U.S. Reps. Melissa Bean, a Barrington Democrat, Bill Foster, a Geneva Democrat and Judy Biggert, a Hinsdale Republican all issued scathing criticisms of the move.

"Unjust and un-American," was how Bean described the report in a statement. The analysis leaves taxpayers to pay for the bulk of safety features, contains no teeth to ensure recommendations will be enforced and ignores the implications for the STAR line, she concluded.

Weisner scoffed at the amount STB regulators suggest CN pay for grade separations, which are astronomical in cost.

"Even though 15 percent for a grade crossing is unprecedented for CN, on a $50 million deal, (that) is only $7.5 million. Plus, the truth of the matter is at least 13 or more separations are needed over the next few years and there's no participation from CN on that," he said.

Darch called the report "just woefully inadequate" and said it appeared the concerns of thousands of citizens and leaders who went on record opposing the transaction "fell on deaf ears."

"If the (Surface Transportation Board) uses this document, which disregards so many important issues ... it would be a travesty," Darch said.

But U.S. Rep. Daniel Lipinski, a Western Springs Democrat who sits on the powerful House Transportation and Infrastructure Committee backed the STB staff, saying "many communities in my district and across this region will see fewer freight trains, fewer blocked crossings and fewer train whistles in the middle of the night. The STB needs to move expeditiously on this. It's important to the region and the nation."

CN has offered to pay about $60 million to remedy problems caused by the extra traffic, which could add more than 20 trains to some communities.

Daily Herald staff writers Jake Griffin and Diana Wallace contributed to this report.