NS, city close sale of Cincinnati Southern Railway

The Cincinnati Southern Railway Board of Trustees on Friday announced the the city of Cincinnati had closed the sale of the short line to Norfolk Southern Railway for $1.6 billion.

On March 15, the city received the entire sale proceeds and an additional $20 million in deferred transaction fees from NS.

At the board’s special meeting on Feb. 29, members voted unanimously to approve a contract with UBS Financial Services to serve as financial advisor as required by Ohio law. The board also approved an investment policy statement as required by state law to indicate how the sale proceeds would be invested.

The sale is expected to generate about $55 million annually for the city, more than double the current lease payments paid each year by the railroad, said Paul Muething, the board’s chair, in a press release. Ohio laws require that the funds only be used by the city to rehabilitate, modernize or replace existing infrastructure.

“This transaction gives us the ability to deliver transformative and perpetual value to the city and its citizens. That is precisely what is now occurring,” said Muething.

The 337-mile, 143-year-old railroad operates between Cincinnati and Chattanooga, Tennessee. NS — which had leased the line for many years — announced in November 2022 that it signed an agreement with the city to buy the railroad. Cincinnati voters approved the sale late last year.