Project Profile: The Cincinnati Southern Railway (CSR), Ohio

Cincinnati Southern Railway

Cincinnati, Ohio to Chattanooga, Tennessee

City of Cincinnati, Ohio Mayor Aftab, the Board of Trustees of the Cincinnati Southern Railway and Norfolk Southern Corporation (NYSE: NSC)

Asset Recycling

Intermodal / Freight

The Cincinnati voters approved the sale of the city-owned Cincinnati Southern Railway (CSR) to Norfolk Southern on November 7, 2023. The Cincinnati Southern Railway, one of the biggest freight operators in the U.S., was created by an Ohio law enacted in 1869. In November 2022, Norfolk Southern agreed to acquire CSR, a 337-mile freight railroad that runs between Cincinnati and Chattanooga, Tennessee for $ 1.62 billion. The agreement provides Norfolk ownership of approximately 9,500 acres of land that sits under infrastructure maintained and operated by Norfolk Southern. Norfolk Southern Railway currently operates the railroad under a lease agreement.

Cincinnati officials plan to use the proceeds of the transaction to form an infrastructure trust fund that will benefit the citizens of Cincinnati for generations to come. The Build our Future Infrastructure Trust, managed by the CSR Board, would solely fund the rehabilitation, modernization, or replacement of existing infrastructure such as streets, bridges, municipal buildings, parks, and green space. Cincinnati officials would not be able to use the funds received for payment of debt service or for the construction of new infrastructure improvements.

The CSR is currently owned by the city of Cincinnati and operated by the Cincinnati, New Orleans, and Texas Pacific Railway Company (CNOTP), a wholly owned subsidiary of Norfolk Southern Railway, under a lease agreement expiring in 2026. The city makes roughly $25 million annually from leasing the railway. Cincinnati officials plan to use the proceeds of the sale to establish an infrastructure trust fund that will benefit the citizens of Cincinnati for generations to come. Norfolk Southern will work with the city to finalize the sale, which is expected to close in the first quarter of next year, the spokesperson said.

CSR History

“Before the Civil War, Cincinnati was a major destination for steamboats,” according to the city of Cincinnati. “After the war, it was more economical to ship to the south via Louisville instead of Cincinnati because of the newly built L&N Railroad. Since no rail line existed connecting Cincinnati to the deep south, the city fathers decided to build one” and expand the Cincinnati economy. An Ohio law enabling the creation of CSR was enacted on May 4, 1869, with a resolution adopted a month later designating Chattanooga as the southern terminus.

Norfolk Southern Corporation, Equity Provider. Norfolk Southern intends to finance the transaction through a combination of internal and external sources

P3-Sales of existing freight rail line

Norfolk Southern

• Stinson Leonard Street, Legal Advisor

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• Cincinnati voters approved the sale of the city-owned Cincinnati Southern Railway (CSR) to Norfolk Southern on November 7, 2023.
• Norfolk Southern will now work with the city to finalize the sale, which is expected to close in the first quarter of 2024.

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• Use Value Capture Asset Recycling Strategy, sale the Cincinnati Southern Railway (CSR) to generate $1.62 billion funding the city desperately needs without incur additional debt or impose additional tax to Cincinnatians. The city is facing about $400 million in deferred capital maintenance projects at places like public health centers, parks, and fire stations.
• Establish Infrastructure Trust Fund from the proceeds of the sale to generate about $40 million to $50 million per year allow the city to address more of its infrastructure needs – fixing potholes, upgrading parks and recreation centers, repairing bridges and so on – and catch up to the backlog over time.
• Build support of organizations, five former Cincinnati mayors, and unions such as the Brotherhood of Local Engineers and Trainmen, AFSCME Ohio Council 8, and the Ohio Environmental Council Action Fund, according to the committee’s website.
• Transfer liability risks from the city to private sector

• Cincinnati votes to sell the Cincinnati Southern Railway,
• The Ferguson Act passed in 1869 to create the railroad
• The asset purchase and sale agreement
• Cincinnati Southern Railway
• Frequently Asked Questions;
• Mayor Aftab Announces Proposed Sale of Cincinnati Southern Railway to Norfolk Southern for $1.6 Billion
• A $1.6B Railway Sale Could Fund Cincinnati's Infrastructure