Improving Freight and Passenger Rail
In a complex transaction called "transformational" for freight and passenger rail transportation in the Commonwealth of Virginia, Holland & Knight attorneys are advising CSX Transportation Inc. in the sale of certain CSX assets and right-of-way to the Virginia Passenger Rail Authority (VPRA). The decades-long project will create greater capacity and efficiency in freight rail in the Middle Atlantic region and expand passenger and commuter rail to and from Washington, D.C.
The initial transaction involved the sale of more than 350 miles of railroad right-of-way and 225 miles of tracks on three segments. The firm was engaged in all negotiations between interested parties, including CSX, Amtrak, Virginia Railway Express (VRE) and VPRA. The transaction will ultimately increase VRE service by 75 percent along the Interstate 95 corridor, double the number of Virginia Amtrak trains and lay a foundational link for the Southeast High Speed Rail Corridor. Importantly, it allows CSX to improve operations on hundreds of miles of track along a core artery of its main freight rail network.
The complexity of the deal required a high degree of coordination and considerable depth of knowledge and experience. Holland & Knight's strategy centered on ensuring that the client's key principles – safety, capacity, compensation and liability – were met at every stage. The firm's sophisticated approach allowed for open discussion and collaboration with CSX's in-house teams as well as CSX's local real estate counsel. By embracing the client's core principles, the combined Holland & Knight-CSX team and VPRA were able to find common points of interest at each negotiation. This approach recognized the essential nature of rail transportation for both freight and passenger use, the community of interest in infrastructure improvement, the desire of all parties to address the core principles up front and a mutual requirement to maintain operational and safety standards.
The sale, valued at $525 million, marks the beginning of several years of representation for the Holland & Knight team as the corridor goes through the design, engineering and construction phases. The sale is part of Virginia's overall $3.7 billion project intended to improve rail infrastructure in the state. Holland & Knight's Transportation & Infrastructure Industry Group was named 2022 "Transportation Group of the Year" by Law360 in part for its initial work on the matter.