getting on track

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A blue Albany could have businesses seeing red P. 8

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Gearing up for e-bikes P. 10

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The List: Top-paid hospital execs P. 16

NEW YORK BUSINESS®

APRIL 9 - 15, 2018 | PRICE $3.00

GETTING ON TRACK How a little-noticed freight line plans to help free the city from its traffic nightmare PAGE 18

VOL. XXXIV, NO. 1 5

WWW.CRAINSNEWYORK.COM

*2018’s Notable Women

CUSTOM CONTENT

in Finance P. 21

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INFRASTRUCTURE

TRAINING

DAYS

To deliver goods in an ever more congested metropolis, officials are turning to its little-­ noticed freight-rail network BY DANIEL GEIGER

T

BUCK ENNIS, GOOGLE MAP

he New York & Atlantic Railway has had its brushes with Hollywood stardom over the years, including when one of its speeding locomotives sent the Jeep of actor Sam Worthington’s character into a cartwheeling wreck during a chase scene in the 2012 thriller Man on a Ledge. Now the railroad hopes to land a leading role in a real-life drama: delivering goods and materials into a jam-packed, hypersensitive city while reducing pollution in the process. More than 90% of those 277 million tons delivered per year—everything from food and retail products to lumber,

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ON THE RAILS

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Float barge Freight and passenger combined Passenger only Freight only “NYA”: New York & Atlantic Railway; “AMTK”: Amtrak; “CSXT”: CSX Transportation; “LI”: Long Island Rail Road; “MNCR MTA”: Metro-North Railroad

“Congestion is getting worse and worse, as predictgravel and garbage—are ­carted into and out of the five boroughs and surrounding areas by about 12.6 ed,” Nadler said. “We have an underutilized freightmillion trucks. The congestion, noise and pollution rail system and hopefully we can do more with it before this issue hits us over the head.” they cause have become especially pernicious as tens of thousands of Uber cars and other vehicles clog the streets, the transit system struggles, and population RUBIK’S CUBE and tourism reach record highs. The prospect of expansion comes fraught with With the amount of cargo set to grow by 40% in challenges for a railroad that runs not across the wide the next 30 years, planners are searching urgently for alternative delivery methods. Most major U.S. cities get THE MOVE: Bonner 20% of their goods by rail. In New ON of New York & Atlantic York, it’s 2%. This has prompted offi- Railway is ready to roll cials to turn to New York & Atlantic, on expansion plans. a niche freight carrier most city residents don’t know exists. The Economic Development Corp. is nearing the release of a plan that includes steps to better use and invest in rail. And the Port Authority of New York and New Jersey is finishing $133 million worth of upgrades to Greenville Yard in New Jersey, a waterfront train depot where freight cars arrive from around the country and are floated by barge to New York & Atlantic tracks in Sunset Park. The work will allow a sixfold increase in the number of cars that can be moved across the harbor, potentially jolting the freight line’s growth after years of modest gains. The Port Authority just began a $23.7 million study to examine the feasibility of expanses of America but through some of the most scaling up the float operation even further. It will densely developed and populated land in the world. also examine in greater detail a plan long champiNew York & Atlantic operates on tracks and yards it oned by Rep. Jerrold Nadler, D-Manhattan, to build leases from the Metropolitan Transportation Authora freight-rail tunnel from New Jersey to Brooklyn. ity that snake from southern Brooklyn into Queens.

From there, the line connects to the MTA’s Long Island Rail Road tracks heading east, and north to a freight line operated by the railroad CSX that wends through northern Queens and the Bronx to Amtrak and Metro-North tracks. The volume of cargo it delivers is split about evenly between the city and Long Island. To make their way through the system, New York & Atlantic’s 2,000-horsepower diesel locomotives must operate at speeds not exceeding 15 mph, stop at myriad road crossings, negotiate tight turns and work within slim delivery windows. One of the line’s biggest bottlenecks is the central hub of its operations, a freight yard in Fresh Pond, Queens, that at its widest point is 13 tracks and encompasses about 10 acres. While that may sound large by the standards of New York City real estate, many other train depots in the boroughs dwarf it. Sunnyside Yards in Queens is nearly 200 acres. Almost all of New York & Atlantic’s traffic converges in Fresh Pond, where it is rearranged so cars heading to the same destination can be hitched together. “It’s a Rubik’s Cube,” said James Bonner, New York & Atlantic’s president. “In the railroad business, there’s a saying that the best conductor is the fattest, because he figures out what he has to do with the least steps. But when you’re space-constrained, you wind up needing to take a lot of additional steps.” The rail yard must manage the work while remaining mindful of the quiet residential neighborhood

“WE HAVE AN UNDERUTILIZED FREIGHT SYSTEM, AND WE NEED TO DO MORE WITH IT BEFORE ­ ONGESTION HITS US OVER THE HEAD” C

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INFRASTRUCTURE

FACTS

of Glendale that surrounds it. Minimizing the impact of 200,000ton locomotives just feet from people’s bedrooms is no easy task. “We work hard to try SHARE OF NYC GOODS to mitigate the issues that arrive by rail; the and concerns,” Bonner average for U.S. cities said, “but railroading is 20% is a ­ metal-on-metal business.” To muffle screeching, New York & Atlantic, a subsidiary of rail holding company NUMBER OF tractor Anacostia, installed trailers needed to haul $25,000 greasing mawhat can fit in one railcar chines in several areas of the yard to lubricate each 3-foot steel train wheel that rolls over them. ­Anti-idling technology installed EMISSIONS REDUCED in 2011 at a cost of $1 by shipping via rail million prevents locoinstead of by truck motives from belching unnecessary fumes. Part of the job for Bonner is staying on the lookout for situations that could bother residents. For instance, he recently had the yard’s crew move a car holding newly furbished railroad ties that had been soaked in the preservative creosol to keep the chemical’s solventlike odors from wafting toward the neighborhood. While few residents want a freight yard abutting their home, the advantage of having trains in the city’s delivery network is undeniable. Each railcar can haul as much as four tractor trailers can and produces 75% less emissions. Trains can’t eliminate trucks, but hauling goods by rail as far as possible allows light-duty vehicles rather than big rigs to handle the final leg of the supply chain. Next to waterborne container shipping, freight rail is the cheapest way to move heavy goods. Take gravel. New York & Atlantic hauled 1 million tons of it last year from Connecticut quarries 170 miles away to a large yard in Maspeth, Queens, that supplies much of the city’s construction industry with the powdered stone and aggregate needed to make concrete. The company brings so much beer from Mexico, flour from the Midwest and cooking oil from Canada that Bonner and his crew have nicknamed it the pizza-and-beer railroad.

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FREIGHT TUNNEL NOT QUITE ON TRACK REP. JERROLD NADLER has argued for decades that a rail tunnel should be constructed under the harbor so that hundreds of thousands of freight cars could come straight into the city. Nadler has prompted the federal government, the state and the city to spend at least $45 million in the past 15 years to study the idea. Expansion of a barge operation (below) also is being explored. Few disagree that replacing truck traffic with railcars is a laudable goal, but many planning experts and railroad executives doubt that a freight tunnel is feasible. Money is one obstacle. Consider that New York and New Jersey officials have struggled to secure funding for an $11 billion Gateway passenger-rail tunnel under the Hudson River that is regarded as the most urgently needed infrastructure project in the region, if not the country. Even if the funds to build a freight tunnel could be raised, the rail network in the boroughs might not be able to handle the volume necessary to make the approximately $10 billion undertaking pay off. New York & Atlantic Railway controls the Brooklyn line to which the tunnel would connect, but the company also relies on Long Island Rail Road tracks and has only slim windows of time at night and just after the morning rush to send trains to and from Nassau and Suffolk counties. Another limitation on the tunnel’s cost-effectiveness is that while it could be built to accommodate double-stack trains, which are more than 20 feet tall, many of the region’s bridges and overpasses trains must pass under are too low for the taller railcars. — D.G.

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PORT AUTHORITY OF NY & NJ

GROWTH PLANS

TO REACH THE CITY, railcars are floated over the harbor or cross the Hudson River 140 miles north.

By the end of the year, the Port Authority plans to finish scaling up its float system at Greenville Yard, increasing what it barges each year to Brooklyn from 4,000 railcars—about 15% of New York & Atlantic’s traffic—to as many as 24,000. That is the equivalent of nearly 100,000 trucks. The Fresh Pond yard is fed by other lines as well and can sort only about 40,000 cars a year without costly upgrades. So some trains will have to be diverted to other nodes to take advantage of the upgrade. Bonner plans to boost business in southern

is being conducted by a partnership between engineering firms STV and AKRF. Meanwhile, a hot market for industrial real estate in New York City has suddenly raised another hurdle for the line’s ability to expand. Warehouse spaces, including properties adjacent to New York & Atlantic’s rail network that are key to the logistics of freight, have increasingly been repurposed for more lucrative uses. Many are now housing tenants in the growing e-commerce sector, which relies much more on trucking than on rail. For instance, Cascades, a Canadian paper products company that owned a warehouse near the large gravel yard in Maspeth and used New York & Atlantic for shipments, just sold the property for more than $70 million to owners who likely won’t use the railroad. “You need a lot of land and infrastructure to support freight rail, and in the city, it’s simply not there anymore, and what little there is, is disappearing,” said Jon Broder, an executive at Conrail, the rail carrier that drives freight cars into Greenville Yard to be floated to Brooklyn. While that may be the work of market forces, Bonner sees his employer getting more gigs in a production that gets larger and more complex every year. He recently toured a Long Island City warehouse site after it hit the market for $100 million to promote to the sellers its connectivity to the rail line. Sure enough, marketing materials for the Borden Avenue property boasted that it was the largest industrial building in the city abutting a rail spur. Perhaps it will attract a buyer who can use New York & Atlantic to move massive quantities of goods in and out of the city. If no one notices the additional train traffic, Bonner won’t mind a bit. ■

NEW YORK & ATLANTIC CARRIES SO MUCH BREW, FLOUR AND COOKING OIL, CREW MEMBERS HAVE DUBBED IT THE PIZZA-AND-BEER RAILROAD

Bonner, 40, began his career in railroading at age 20, pounding spikes on freight tracks in western Kansas. He started at New York & Atlantic in 2013 as a sales and marketing executive. In 2016 he was named president of the line. This year he expects the company to move 32,000 cars—5,000 more than when he joined. To add customers, the railroad has been developing delivery depots along its roughly 20-mile rail network. It recently renovated a 12-acre rail yard it controls on 53rd Avenue in Long Island City. That $10 million project, done in partnership with the MTA and the city, included 300 feet of new track and the renovation of a building to house cargo. Right now the site is used to service a cooking-oil company, but Bonner sees it as a bigger food hub where flour, rice, cornmeal and other commodities can be delivered in bulk to wholesalers and manufacturers.

Brooklyn, particularly among food customers, by bypassing Fresh Pond and steering trains to the southernmost section of the railroad’s track, along the border of Dyker Heights and Borough Park. To make drop-offs there, New York & Atlantic plans to build a small yard along 61st Street and another in East New York, each of which could sort and unload up to 4,000 cars a year. Future upgrades to Greenville Yard could render it capable of floating in as many as 75,000 cars annually, which, when combined with what New York & Atlantic receives from areas north of the city, could allow the rail line to remove as many as half a million trucks from the road—enough to appreciably reduce congestion. The economics and feasibility of that expansion will be examined in the Port Authority study, which

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