120-year-old Phila. railroad challenges SugarHouse

Almost three decades have gone by since railcars hauled sugar from the old Jack Frost refinery on the Delaware River.

But that hasn't deterred an obscure, 120-year-old railroad company from staking a claim to the land under those ghost tracks - and throwing another challenge in the path of the SugarHouse Casino project.

The Philadelphia Belt Line Railroad is trying to prevent SugarHouse developers from using a strip of land that cuts across the project's 22-acre site, which straddles Fishtown and Northern Liberties.

The railroad says City Council gave it the right to use the land - the width of a track plus 91/2 feet - in 1890.

In a complaint filed this year in Philadelphia Common Pleas Court, Belt Line said it would not give up its access without a fight - or compensation. The two sides had been negotiating since late 2007, to no avail. A trial is set for Nov. 2.

A lawyer for Belt Line, John B. Taulane III, declined to comment on the case.

Leigh Whitaker, a spokeswoman for SugarHouse, also would not discuss pending litigation. But in a court document filed June 29, a SugarHouse attorney said the parties were in "active negotiations."

SugarHouse wants to turn the land into a private service road for the casino, set to open next year. In 2006, it won one of the two slots licenses for the city, but legal and political challenges, plus neighborhood opposition, have delayed construction.

Work on an interim slots parlor and surface parking is expected to begin at the end of the summer, Whitaker said.

A lawyer for the city, Andrew Ross, said the Belt Line lawsuit should not affect the casino's ability to get construction permits.

The land in question once was part of Penn Street. The refinery closed in the early 1980s and was demolished in 1997; with it went Penn Street. In court documents, SugarHouse said Council removed the road from maps in 2004 and thereby eliminated the railroad's right-of-way.

"Once the City of Philadelphia abandons a street, any right-of-way granted by the city . . . is extinguished," SugarHouse said in a filing.

Belt Line, basically a holding company with one full-time employee, has 16 miles of tracks and rights-of-way. Its earnings come from a Conrail lease on 2 2/3 miles of track, billboard rentals on company property, and investments, according to a 2007 report by the U.S. Railroad Retirement Board, which represents rail workers.

Although some of Belt Line's remaining tracks are used by railroads such as CSX, Norfolk Southern, and Canadian Pacific, most of the rights-of-way have been paved over for roads or ripped up for development such as the casino.

Belt Line was created to ensure that all rail operators had access to city-owned piers. At the time, Delaware Avenue was the gateway to the Philadelphia ports, and city leaders did not want any one railroad to seize control of the waterfront.

The tracks were to be "free of the exclusive control" of any single railroad, said Mary Flannery, a spokeswoman for the Greater Philadelphia Chamber of Commerce.

Because of the railroad's civic role, a precursor to the chamber was given a hand from the start in appointing Belt Line directors. But, Flannery said, the chamber derives no fees from the private business, which is headed by Charles E. Mather III.

Mather did not return calls for comment placed to the Belt Line office in Center City.

Flannery said the chamber was not a party to the lawsuit and supported construction of the SugarHouse casino.