From last month but I just ran across it. Modoc Northern takes over Lakeview line By Anthony Larson Special to the Record Railroads are making a comeback in this area, thanks to growing business interests and some aggressive planning and marketing efforts. The fledgling Modoc Northern Railroad has quietly acquired the track and is now in the process of securing the equipment needed to turn what was a dying industry into a reborn, profitable venture. "We provide a service in transportation, something you can't necessarily hold in your hand," said Don Blansett, president of Modoc Northern, which began operation of the Klamath Falls to Alturas line from Union Pacific in 2005. "But yet, we're a heavy industry unto itself." The occasion for Blansett's optimism was acquisition of the 55-mile Lakeview to Alturas branch of the former Lake County Railroad in November last year, thus gaining control of the entire 160-mile rail corridor from Lakeview, through Alturas and on to Klamath Falls. "It grew to be a larger enterprise than the county could really efficiently handle on their own," he said of the Lake County line. "So we, in turn, acquired the railroad from the county." Saying that making the two lines into one "makes a lot of sense," Blansett pointed out that Modoc Northern is now poised to better serve businesses in Siskiyou and Modoc counties in California, as well as Klamath and Lake counties in Oregon, with their connection to Union Pacific in Klamath Falls. "We are, in a lot of ways, the lifeline. If we were not able to bring the product out of Lakeview, it would be very difficult for that community to sustain itself the way it is. "We feel very good about this property being one that's going to be successful," he said, explaining his vision of the need for railroads in this area. "We are seeing growth up in Lakeview." Since Lakeview shipping business is the primary source of revenues for the fledgling railroad, Blansett is extremely pleased to now own the entire line. "It's critical for us to keep that intact," he said. With a strong background in railroading, as well as a love of trains, Blansett seems to be the right person in the right place at the right time to bring a dying enterprise back to life. "I've got family that was in the railroad (business) back East. From the time I was about three years old, I was exposed to it. And so, I grew up always wanting to be on the railroad." However, Blansett is no wide-eyed optimist when it comes to the realities of the railroading business. "It's been good to me, but it does open your eyes," he said. "I love what I do. Don't get me wrong. But, it's not necessarily all the glamour that you imagine growing up. "That's why I like my models," said the avid model railroader, laughing as he contrasts models to managing the real thing. "I've got something I can control instead of it controlling me." Blansett is betting on future growth in the area. "That's what we're after here. We see Alturas as a community that does have some things to offer to try and attract new industry." He also plans to do the same with other communities along the line, encouraging agricultural and industrial growth. "We are only as strong as the communities that we serve," Blansett said. "What we're seeing is that the industry has shaken down to a point that the ones that are left, we feel confident, will remain. "What we're trying to do now is show them that with our cost structures, we can get their product into a new market, and maybe they can make a little more money." None of this is pie in the sky, since Blansett has done this before with the Utah Central Railroad, located in Ogden, Utah, a decaying rail system whose history goes all the way back to the building of the first transcontinental railroad in about 1869. "We started the Utah Central back in 1991," he said. "Our success in Utah was not just in bringing business back to the rail that had been de-marketed, though that was a part of it. Our real success there was in attracting new industry. We have a lot of control in what we're able to do in showing properties along our lines and incentives to get people to come to these towns." Reversing the same sort of trend in Northeastern California can be done with proper management and promotion, according to Blansett. "What you've got here is 20 years of de-marketing rail business." Using state sponsored business incentives and underwriting some to the costs to shipping customers, Modoc Northern is poised to turn things around. "In a community like we have here, where we're willing to put switches in and that kind of thing," said Blansett, "it helps encourage business to locate here. "We had over $50 million in new plants and equipment locate to the Utah Central over a ten year period, beginning in 1995. I think the same thing can happen here," he said, explaining his business plan. "We have an awfully good infrastructure model. An industry can locate in Alturas or Lakeview, and the cost to ship by rail is identical if they were located in Klamath Falls. That right there takes (the cost of) transportation off the table." Modoc Northern has made a commitment to obtain over $1million in new equipment, as well as improving maintenance to become even more competitive. "Locomotives aren't like an automobile. You just don't get in, start it up and away you go," he said, explaining how one builds a railroad on a budget. If you want to buy a locomotive, and you don't have the $2.8 million in your pocket to go to General Electric to order a brand new one, then the search is on." Experience dictates that Modoc Northern be well managed. "It's easy to use up infrastructure," said Blansett. "But if you do that, at some point in time you'll pay the price." Increased freight volume is the key to profitability, and bringing everything up to snuff makes that possible, according to Blansett, who expects to double the present 3,000 cars-per-year volume by 2010. "We try to run a first class property. We don't try to run this thing on a shoestring." Now "in the market for two more locomotives," Modoc Northern presently employs 15. "Between now and 2010, we see the company going to 35 employees, total," said Blansett. "Alturas is where we will eventually have our engineering department located, and we will have a small operating contingent here. "It would be nice to have the Alturas community support the railway and support the new industry coming to the community to utilize the rail."
