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Council denies, tables, then approves agreement

The Harrison County Council Monday night voted to approve a $500,000 appropriation for the August 2006 railroad agreement between the Harrison County Economic Development Corp. and Lucas Oil Products. The deal requires the county to pay $100,000 upon the signing of the agreement and the same amount in July of each of the next four years.
Economic Development director Darrell Voelker brought the agreement to the board of commissioners last Tuesday night and was sent to the council with the intent of gaining approval for the commissioners to sign the document. The council put three motions on the floor regarding the agreement, and for Voelker, the third time was the charm.
Councilman Jim Heit-kemper first made a motion to approve the agreement, and Councilman Gordon Pendleton seconded the measure, but it failed, with only those two voting in favor.
Councilwoman Leslie Robertson said she has a problem paying $100,000 a year to run the railroad.
‘I’ve always had a problem with it,’ she said.
The council approved the appropriation and agreement in 2006, with only former Councilman Alvin Brown against. Pendleton said he was disappointed the council would agree to something and then change its mind two years down the road.
‘I, personally, could never do that,’ he said. ‘The man bought the railroad with the understanding he was going to get money.’
Robertson said she can’t help what the council committed to in 2006. Only Council Chairman Chris Timberlake and Councilman Ralph Sherman were on the board at the time. Robertson said she would like to revisit the matter at the council’s next meeting.
Pendleton made the motion, which passed unanimously, to table the matter. However, Councilman William T. (Bill) Nichols, who voted against the first motion, changed his mind and made a motion to pass the agreement. He explained he did so only to go along with what the council did in 2006.
‘I don’t think the county should be paying for the railroad,’ he said.
Pendleton seconded the motion and Heitkemper again voted in favor, leaving a 3-3 tie. Timberlake, as chairman, broke the tie, voting for the agreement, as he did in 2006. The money will be appropriated out of the riverboat economic development fund.
Voelker and Commissioner James Goldman revisited the history of the agreement at the commissioners’ meeting last Tuesday night.
Forrest Lucas, owner/founder of Lucas Oil, purchased the railroad when previous owner Fred Owen planned to shut down the system.
Voelker and county officials agreed the railroad is vital to Harrison County’s economic health.
‘We were up against a wall,’ Goldman said. ‘We could kiss those businesses goodbye.’
The county even passed an ordinance to create a port authority for the purchase of the railroad, before Lucas became involved. The outright purchase of the railroad would have cost at least $2 million for the county, Goldman said. Without the rail system, Lucas would be forced to leave and attracting new industry would become even more difficult. Goldman said the county also would lose Howard Packaging, which employs 75 and is growing.
‘This was the best deal for the county; $500,000 sounds like a lot, but, without the railroad, more (businesses) than Keller (which closed in 2004) would be gone,’ he said.
The rail line runs about seven miles north to New Salisbury, where it meets the Norfolk Southern Railroad. The feeder line helps keep down shipping costs for Lucas.
Commissioner Terry Miller, while recognizing the earlier commitment to Lucas, made the motion to send the request to the council.
When negotiations were being made, Lucas said he could operate the railroad, whose line is part of the old Louisville, New Albany and Corydon (LNA&C) Railroad, much cheaper than the county.
Voelker added Lucas would not stand in the way of any development by Main Street Corydon at the old Keller Manufacturing site, and he would one day like to see a tourist train to the little historic depot on the site.
Voelker added the rendition of the proposed Main Street Corydon project on the old Keller site, which kept the railroad track intact, influenced Lucas’ decision to go forward with the agreement. The agreement also states that Lucas would ‘reasonably cooperate’ with a project on the site.