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Posted on Sat, Dec 29, 2012 : 5:20 p.m.

Kansas company enters agreement to buy Ann Arbor Railroad

By Paula Gardner


An Ann Arbor Railroad bridge over the Huron River.

Daniel Brenner |

The Ann Arbor Railroad - a so-called "short line" that runs from Ann Arbor to Toledo - will be acquired by a Kansas transportation company that wants to expand into Ohio, according to the company.

A subsidiary of Watco Companies LLC has reached an agreement to purchase the private company's stock, which will be held in a voting trust "until the Surface Transportation Board (STB) approves the transaction, which is expected to be in late January or early February," according to Watco.

Information on the transaction details was not available Saturday. Estimates put the AAR annual revenue at $6 million per year.

The 50-mile Ann Arbor Railroad serves southeastern Michigan and the Toledo, Ohio markets focusing mostly on the automobile and manufacturing industries. Most of its operations are in Toledo, but its headquarters is in Howell.

The acquistion gives Watco access to what it describes as " significant rail terminals in the Toledo area focused on automobile loading for industry leaders Chrysler, General Motors, and Ford."

Its interchanges include Class 1 railroads Canadian National, CSXT, and Norfolk Southern as well as short lines Great Lakes Central, Indiana & Ohio and Wheeling & Lake Erie.

“This acquisition expands our rail network in the State of Michigan and allows us to build stronger relationships with our customers while also giving Watco the opportunity to serve the State of Ohio and its important industrial base,” said Ed McKechnie, Watco chief commercial officer, in a news release.

“The Ann Arbor Railroad team has prided itself in delivering high quality service to our Customers,” said Jim Erickson, president of the Ann Arbor Railroad, in the same release. “We are going to continue to build on that high expectation of service, and look forward to working together with the rest of the Watco team.”

The railway has been run by the Ann Arbor Acquisition Corp, according to rail history sites. It's been operating it its existing short-line format since 1988, from a Great Lakes Central Railroad interchange north of Ann Arbor. It also includes a branch line in Saline to the Faurecia plant.

Ann Arbor Railroad also controls some railway right-of-ways that the city hopes to acquire as part of a greenway project.

Watco is based in Pittsburg, Kansas. It has 3,500 miles of railway in the U.S., including at least 20 short-line railroads.


John Q

Tue, Jan 1, 2013 : 12:07 a.m.

99% of the WALLY route is on the GLC. The Ann Arbor trackage only comes into play if the goal is to get a downtown station stop. The freight trains run mostly overnight avoiding any regular conflicts with a commuter train schedule.


Wed, Jan 2, 2013 : 2:57 a.m.

Maybe... Maybe not - too early to tell, IMHO. Time will tell. The WALLY thing is going nowhere fast, regardless, especially since the U is making noise about cutbacks, and LESS hiring going forward at the Med Center. Surprise, surprise...

John Q

Tue, Jan 1, 2013 : 6:09 a.m.

Why? The traffic patterns through Ann Arbor are largely dictated by traffic heading to and coming from the GLC. Even if the new owners drum up new traffic on the old Ann Arbor line, that traffic isn't going to head north through Ann Arbor. It's going to go south to Toledo where it will be interchanged with CSX.


Tue, Jan 1, 2013 : 3:06 a.m.

If the new owners increase the utilization of this segment of the line, there could be more freight traffic, day and night. Don't know if they will, but it could happen. There used to be 100 car+ coal trains several times a day, rumbling off to Dow Chemical, I believe, up in Midland - maybe as recently as 20 years ago.

Vivienne Armentrout

Sun, Dec 30, 2012 : 8:32 p.m.

In case you have missed out on the WALLY saga, here is my post which I just updated to reflect this news. The question is whether Watco will be more amenable to a WALLY station in downtown Ann Arbor than the Ann Arbor Railroad has been.

Unusual Suspect

Tue, Jan 1, 2013 : 2:19 a.m.

I think the same reason they buy a Smart Car - just to feel "green."


Mon, Dec 31, 2012 : 6:07 a.m.

The WALLY should be undesirable for Ann Arbor taxpayers as it will require at least $1.5 million in subsidies to cover annual operational and maintenance costs. The Howell-to-Ann Arbor railway is expected to transport only about 1100 commuters per year whose ticket price must be kept reasonable. With intermediate stops and additional bus rides required from the downtown station to wherever employment might be, I wonder why anyone would use the railway.


Sun, Dec 30, 2012 : 10:25 p.m.

If, as stated in the article, they are interested in doing more business with the Big 3, and more industrial business in general, dealing with WALLY Folly in any form would be an unwelcome distraction - unless the revenue gathered by allowing it was more than they could make shuttling cars and commodities around. I may be wrong, but from what I know of railroads, the whole WALLY thing would be seen as a royal pain in the butt, and hey would probably do what they could to discourage it.

Unusual Suspect

Sun, Dec 30, 2012 : 10:15 p.m.

I'm guessing if the AAR has been shopping itself around, they have wanted it to be with as few strings attached as possible. It's probably easier to sell a railroad that doesn't have extra ties and commitments attached to it. Several years ago Watco and Norfolk Southern attempted to enter an agreement to give Watco control over the track from Ypsilanti to Kalamazoo, and I seem to remember that Watco was willing to continue support of Amtrak service on that track. That deal didn't go through. Watco does currently operate a railroad - the Pacific Sun Railroad - that supports Amtrak traffic. So maybe those things signify Watco willingness to work with passenger traffic. I guess we'll see.


Sun, Dec 30, 2012 : 7:20 p.m.

Inside sources have also indicated that Watco is planning on purchasing B&O Railroad, Reading Railroad, Pennsylvania Railroad, then Short Line Railroad. When those deals are closed, they are planning on diversifying their portfolio by acquiring Electric Company and Water Works. After that it's real estate, with the purchase of Boardwalk and Park Place, maybe throw in a couple of houses then maybe a hotel or two. This will all be dependant upon whether the CEO does't go to jail, directly to jail, and does not pass "Go" or collect $200.


Mon, Dec 31, 2012 : 4:20 a.m.

You may have got that right Piledriver. They will not pass "Go" and will not collect $2M dollars . . . or will they? Hey! We're not in Kansas any more . . . right?

Tom Joad

Sun, Dec 30, 2012 : 4:05 p.m.

I'm waiting for a rails-to-trails project that will join up with the Lakeland Trails Park system of fabulous paved bike paths.

Unusual Suspect

Sun, Dec 30, 2012 : 6:33 p.m.

Hmm.... if the AAR was abandoned, then it appears the only customer the GLC would have south of Howell would be what looks from satellite imagery to be an industrial plant on North Territorial Rd. If they drop them and this turns to trail, then we could ride our bikes up to Zukey Lake Tavern!


Sun, Dec 30, 2012 : 3:44 p.m.

In 2010 rep.John Dingell iussed $ 200 million to the state of michigan for" A railroad" that promised by MDOT to take you/me to the thankgiving parade in Detroit..WEll 2 Thanksgiving parade have gooooone.... The Golden Spike from Ann Arbor to Howell/Brigthon Started 30/32 years ago.WHERE is there Plan? Really like for the AA news to investigate and show us the MONEY plus the Trains running!


Sun, Dec 30, 2012 : 3:58 p.m.

Dingell "issued"? Gee. I didn't know members of Congress, on their own, could "issue" money.


Sun, Dec 30, 2012 : 2:55 p.m.

In all the years I've lived her, I swear I've only seen a train on those tracks one time - we followed it through town, over crossings I didn't realize really had trains on them (by the Big House, for one example). It would be cool to accompany this story with a map or satellite photo of the train tracks.

Ann English

Sun, Dec 30, 2012 : 8:31 p.m.

For four years, I lived in an area where I could see and hear trains on that track from my BEDROOM, the highest point in the city. Today, the Highland Apartments sit there. That railroad line is for freight trains only. Once, I took a large map of Ann Arbor and highlighted both the Ann Arbor Railroad and Norfolk Southern Railroad. The photo of the AARR bridge is where the two lines cross, with the Norfolk Southern Railroad, which follows the Huron River until the Village of Dexter, going under that bridge. The AARR is straight north and south of town, but winds in an "S" shape as it goes through town. The last time I saw a train on the Ann Arbor Railroad tracks, it was crossing Ellsworth Road. When I worked in a business on State Circle, I could often hear the train whistle in the morning, as it crossed those tracks.


Sun, Dec 30, 2012 : 5:21 p.m.

Actually the trains run thru here daily, usually early in the morning. You can here the whistle/horn all over downtown/ north area.


Sun, Dec 30, 2012 : 2:13 p.m.

May the Ann Arbor railway rest in piece. Snap your photos of the cars near Maple in Saline, they will soon be a antique.

Craig Lounsbury

Sun, Dec 30, 2012 : 1:44 p.m.

I've always dreamed of the day I could take the train to Toledo. I wonder if this move will help or hinder my dream? ;)


Sun, Dec 30, 2012 : 3:57 p.m.

The dotted line on the map to Toledo indicates a bus service run by AMTRAK that runs from East Lansing to Ann Arbor to Dearborn to Detroit to Toledo. That bus service hooks up with trains that run through Toledo (e.g., Chicago to D.C.).


Sun, Dec 30, 2012 : 2:12 p.m.

Amtrak's station in Toldeo had a dotted line linking Ann Arbor to Toledo, suggesting the route was coming soon, but that was decades ago. With Ann Arbor being the largest station (by volume) in the state, it makes since to link to Toldeo as the gateway to the east.

Ren Farley

Sun, Dec 30, 2012 : 1:25 a.m.

Is Watco the firm that tried to get operating rights on the Michigan Central line from Dearborn to K-Zoo a few years ago when Norfolk Southern wanted to get out of business in Michigan? Wasn't that blocked by Representative Joe Swartz and the Surface Transportation Board? Will Ann Arbor be better served by Watco ownership of the line that Thomas Ashley constructed shortly after the Civil War? I hope that Washtenaw and Ann Arbor officials take a stand on this issue.

Unusual Suspect

Sun, Dec 30, 2012 : 2:30 p.m.

I'm not positive, but I don't think Ann Arbor itself is "served" by this railroad anymore. I believe there are no customers remaining here. If Fingerle still is, I would guess they're an infrequent customer, since I never see any freight cars there anymore.


Sun, Dec 30, 2012 : 4:11 a.m.

It was JIM Ashley, not Thomas. And for bringring his railroad thru AA we changed the name of Second Street to Ashley Street.

Top Cat

Sun, Dec 30, 2012 : 1:03 a.m.

Does the name "Ann Arbor Railroad" continue or does it become a fallen flag ?


Sun, Dec 30, 2012 : 3:24 p.m.

I was thinking the same thing. I hope it continues with the same name.

Unusual Suspect

Sat, Dec 29, 2012 : 11:46 p.m.

If this company is interested in buying it for it's Ohio trackage and connections, I'm wondering if they will even continue the service up into Michigan. If they don't, perhaps the Great Lakes Central (owner of the track north of Ann Arbor) will buy it. Or maybe this line will go the way of so many others and disappear. If so, I would love to see it replaced by a trail from here to the northeastern Toledo area. it would pass through some rural area and Milan, Dundee and Temperance on the way.

the leprachaun

Mon, Dec 31, 2012 : 12:58 a.m.

They continue Michigan operations to feed the GLC it traffic. Also about 4 Canadian Nation trains use the Ann arbor fro south of Dundee to Toledo.

Craig Lounsbury

Sun, Dec 30, 2012 : 1:41 p.m.

It would seem, if they are big on moving automotive parts, they would continue their Michigan presence. But I am just guessing.


Sat, Dec 29, 2012 : 11:34 p.m.

They will likely welcome Hieftje's folly trolley with open arms {and hands for payment).


Sat, Dec 29, 2012 : 11:13 p.m.

Sounds like a serious industrial user who will ramp-up industrial usage and hopefully nix the Wally pipe-dream-to-nowhere vision of the Hieftje and his buddies. Doubt they will want to deal with some piss-ant commuter rail project.


Sat, Dec 29, 2012 : 10:39 p.m.

Best trestle jump in the area!