RTC moves to terminate agreement with Progressive Rail, speed construction of rail trail

In order to move forward with building three segments of Coastal Rail Trail over the Santa Cruz Branch Line railroad tracks, the Santa Cruz County Regional Transportation Commission (RTC) is cutting ties with the current rail operator, Minnesota-based Progressive Rail.

In a news release late Thursday night, the RTC announced it is terminating its agreement with Progressive Rail and becoming the common carrier along the Santa Cruz Branch Rail Line north of Watsonville. The move comes after the commission voted in early December to build 8 miles of the Coastal Rail Trail on top of the rails, rather than next to them as previously planned, as it tries to complete the project within budget and on time, and not jeopardize a $96.6 million grant from the state — the largest active transportation grant ever awarded by the California Transportation Commission.

“This decision marks a necessary step in the development of transportation solutions along the RTC-owned branch line, including the Coastal Rail Trail in the near-term and passenger rail in the long-term,” the release reads. “This action also preserves the existing freight and recreational rail uses along the branch line, while allowing Coastal Rail Trail projects to be implemented along non-operational sections of the line.”

Progressive Rail has consistently opposed railbanking, which is the practice of taking a rail line out of service while still theoretically preserving the corridor for possible future train use. Although the RTC is not considering this practice and is pursuing a different bureaucratic maneuver to build the trail over the tracks, negotiations with Progressive Rail have nevertheless been unsuccessful.

The RTC is already requesting proposals from rail operators to continue freight service in Watsonville.

Christensen told Lookout on Friday that this move was likely “inevitable,” but that the recent switch to building the trail over the railroad tracks made it clear that the agreement had to end.

“Operating passenger rail would have been challenging with a private railroad having some leverage and control over the line,” she said. “If we were to implement passenger rail, we would need control of the line so we can schedule trains.”

The relationship between the RTC and Progressive Rail has been strained for some time, with commissioners and RTC leadership saying that the agency is difficult to deal with. Christensen said that the RTC has had “years-long disputes” with the company, and said that its lack of cooperation with the new trail plan was “the straw that broke the camel’s back.” 

Lookout has reached out to Progressive Rail for comment.

While the RTC has issued a notice of termination already, that does not void the contract immediately, said Christensen. She said the organizations will need approval from commissioners and the Surface Transportation Board, the federal agency that regulates interstate freight rail, and will also have to select a new operator for the existing freight services in South County. She expects that will take several months. 

Christensen added that she’s confident that the move will be finalized well before the state grant’s 2027 deadline for construction to begin on Segments 8 through 11. She views this move as a positive change for the transportation agency.

“We’ll have local control over our line, and we’ll be able to use it for its intended purpose, which is to improve transportation for our community,” she said. “We don’t have to dance around some private railroad with interests that don’t align with ours.”

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