Cincinnati's railroad: built in 1880, leased for generations, sold for $1.6 billion

A city builds a railroad

After the Civil War, Cincinnati worried about losing trade as shipping shifted away from the Ohio River. The Ohio Constitution barred cities from going into business with stock corporations, so the city built a line itself, in an effort led by Edward A. Ferguson. ^[1]

Voters approved $10 million in bonds in 1869, and the city later needed $6 million more to finish 337 miles of track and tunnels to Chattanooga, Tenn. The last spike went in on Dec. 10, 1879, and the line opened on Feb. 21, 1880. ^[1]

Landlord to the railroads

The city never ran trains. It leased the line from 1881, first to the Cincinnati, New Orleans and Texas Pacific Railway, which was folded into the Southern Railway in 1894. Norfolk Southern later operated it as one of its busiest routes, with up to 30 trains a day. ^[1][2]

The sale

In November 2022, the city and Norfolk Southern agreed on a sale. The Surface Transportation Board found no harm to competition in September 2023, and on Nov. 7, 2023, Cincinnati voters approved the deal with about 52% of the vote. ^[2][3]

Norfolk Southern paid about $1.6 billion and closed in March 2024, gaining permanent control of the line and about 9,500 acres. The vote came months after the railroad's derailment in East Palestine, and some unions and community groups opposed the sale. ^[1][2][3]

A trust fund instead

The money went into a trust invested like a retirement fund. The city may spend only the earnings, and only to repair or replace existing infrastructure such as streets, parks, recreation centers and police and fire stations. At the time of the vote, the city estimated its maintenance backlog at about $400 million. ^[3]