Economy delays BNSF rail-line sale to Port of Seattle

BNSF Railway's sale of its 42-mile Renton-to-Snohomish rail line to the Port of Seattle won't close before the first quarter of 2009.

Port officials, citing the crippled municipal-bond market, have announced a three-month extension of the $107 million deal, which had been scheduled to close by the end of this year.

The Port also announced it has chosen a rail operator with whom it will negotiate a short-haul freight service and possible excursion train between Snohomish and the wineries in Woodinville.

Based on a recommendation from BNSF, the Port chose GNP/Ballard, a partnership of Ballard Terminal Railroad operator Byron Cole and GNP Railway operator Tom Payne, as possible business partners.

Ballard would run freight cars and GNP would operate passenger cars, said Port spokeswoman Charla Skaggs. The operator of the former Renton-to-Woodinville Spirit of Washington Dinner Train had submitted a proposal, Skaggs said, but it was passed over in favor of GNP/Ballard.

The excursion train could possibly run as far south as Bellevue, depending on the outcome of a public planning process, Skaggs said. Payne in the past has promoted the idea of GNP running commuter trains from Snohomish to Bellevue.

A contract won't be signed with GNP/Ballard until the Port's purchase of the rail line is complete.

On the delay of that deal, Port CEO Tay Yoshitani said in a written statement that local governments across the country are delaying or scrapping projects because of the difficulty in finding buyers for their bonds.

"The Port remains committed to placing the corridor into public ownership," Yoshitani said. "BNSF understands the situation and agreed to this short delay. We look forward to finalizing the deal next year."

BNSF spokesman Gus Melonas declined to discuss details of the deal, but said, "We're working with the Port to move forward on the transaction."

Natasha Jones, spokeswoman for King County Executive Ron Sims, said, "We still have confidence that they will be moving forward once the whole worldwide economic situation improves."

BNSF, which recently halted freight operations south of Woodinville, agreed two years ago to sell the corridor to the Port, which in turn promised to trade it to King County for county-owned Boeing Field. That deal fell through when Port Commission and the Metropolitan King County Council balked.

Under the current sale agreement, the Port would continue to provide freight-rail service to businesses between Woodinville and Snohomish. King County would pay the Port $2 million for the right to build biking and hiking trails between Bellevue and Renton and between Woodinville and Redmond.

Skaggs said the virtually shutdown market for corporate "commercial paper" has begun to function again, giving Port officials hope that the bond market will improve soon. "The belief is that certainly by March of 2009 we should see more thawing in the bond markets," she said. "No one can say that for sure."

The Port's outstanding general-obligation bonds carry top-tier AAA ratings, Skaggs said.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com