Delaware Otsego Corporation

Delaware Otsego Corporation
Overview
Headquarters	Cooperstown, New York, U.S.
Reporting mark	Current- NYSW, CNYK Former- CACV, FJG, LASB, RVRR, SIRY, TPW Never materialized- KTER
Locale	Upstate New York; Northeastern Pennsylvania; New Jersey, U.S.
Dates of operation	1965–Present
Technical
Track gauge	4 ft 8+1⁄2 in (1,435 mm) standard gauge
Other
Website	www.nysw.com

The Delaware Otsego Corporation (DO) is an American railroad holding company that is headquartered in Cooperstown, New York.^[1]^[2] The company was established in 1965 as the Delaware Otsego Railroad by Walter G. Rich, and they began to specialize in reactivating abandoned branch lines as profitable short line railroads throughout New York and New Jersey. They were collectively known as the DO System.

Their largest subsidiary is the New York, Susquehanna and Western Railway (NYS&W), and reorganizing them expanded DO's status from a short line company to a regional railroad network. Since 1997, DO has been owned by DO Acquisition LLC. As of 2024, the NYS&W and the Central New York Railroad are DO's only remaining subsidiaries.

History

The Delaware Otsego Corporation (DO) was established in 1965 as the Delaware Otsego Railroad by a group of businessmen and railfans, led by Syracuse University law school student Walter G. Rich.^[3]^[4] DO was formed, in response to the New York Central Railroad's (NYC) abandonment of their Ulster and Delaware Branch. The NYC cut back operations to Bloomville, and DO subsequently acquired a 2.6-mile (4.2 km) section of the branch between Oneonta and Mickle Bridge.^[4] Delaware Otsego was named as such, since the section lied on the border between the New York counties of Delaware and Otsego.^[3]^[4]

The company acquired former United States Army 0-6-0 steam locomotive No. 2 from the Virginia Blue Ridge Railway, and they began using it for their tourist excursion operations.^[4] Their tourist trains operated on the branch between the passenger station near their interchange with Delaware and Hudson Railway (D&H), and Mickle Bridge. Occasional freight service was also provided. In 1970, the state of New York condemned the right-of-way, in favor of construction of Interstate 88 through Oneonta. With settlement money, Walter Rich and his fellow Delaware Otsego executives searched for another branch to acquire and operate.^[4]

In 1971, the D&H decided to abandon their Cooperstown Branch, which lied for 16 miles (26 km) between Cooperstown Junction near Colliersville and Cooperstown. Following some successful negotiations, Delaware Otsego purchased the Cooperstown Branch from the D&H and revived the route's original name, the Cooperstown and Charlotte Valley Railroad (CACV), and they relocated their tourist operations there.^[4] The Delaware Otsego Railroad was quickly renamed as the Delaware Otsego Corporation to reflect their new status as a holding company. Concurrently, they acquired their first diesel locomotive, ALCO RS-2 No. 100, to supplement 0-6-0 No. 2.^[4] DO also established their new headquarters at the two-story Cooperstown depot.^[5]

In 1975, DO discontinued their tourist operations from low ridership, and No. 2 was left in indoor storage in Milford.^[5] Throughout the 1970s and 1980s, DO acquired and established additional short line companies for freight operations, including the Fonda, Johnstown and Gloversville Railroad (FJ&G), the Lackawaxen and Stourbridge Railroad, the Staten Island Railway, and the Rahway Valley Railroad. In 1980, Delaware Otsego established the Kingston Terminal Railroad (KTER) to operate a 2-mile (3.2 km) section of the former NYC Catskill Mountain Branch between Kingston and Rondout, New York.^[6] Before operations were planned to commence, the branch's sole customer, a cement plant, shut down, and the KTER was quickly dissolved.^[6] That same year, DO purchased their largest subsidiary, the New Jersey-based New York, Susquehanna and Western Railway (NYS&W), and they reconditioned their trackage and expanded their operations into New York state, resulting in DO becoming classified as a regional system.^[7]^[8]

On October 3, 1997, DO Acquisition LLC announced that it had completed the short-form merger of Delaware Otsego with a wholly-owned subsidiary via a stock tender offer of $22 per share.^[9] The merger brought the Delaware Otsego Corporation and their subsidiaries under control of Norfolk Southern (NS) and CSX, with CSX and NS each obtaining 10% of DO's shares, while Walter Rich obtained 80%.^[10] On August 9, 2007, Rich died at the age of 61, following an eight-month struggle against pancreatic cancer.^[3] Shortly thereafter, the NYS&W reduced their operations, with lucrative traffic being siphoned-off to CSX and NS, and all commercial passenger operations were discontinued.^{[citation needed]} As of 2024, the NYS&W railway continues to operate freight trains between Syracuse, New York and North Bergen, New Jersey. The railway also hosts occasional detour of trains, when derailments or overflowing traffic block the CSX's River Subdivision.

Current Railroads

New York, Susquehanna and Western Railway

In 1980, the state of New Jersey approached Walter Rich and asked him to take over operation of the nearly-dead New York, Susquehanna and Western Railway (NYSW). In 1982, Conrail petitioned to abandon the former EL branches from Binghamton to Syracuse and Utica. DO acquired these lines and organized them as the Northern Division of the NYS&W. Soon after, portions of the former Lehigh and Hudson River Railway between Warwick, New York, and Sparta Jct., New Jersey, were purchased, and the western end of the NYSW was re-opened. Trackage rights over Conrail from Warwick to Binghamton were secured, creating a new through route from Syracuse to the New Jersey terminal waterfront at Little Ferry. The CNYK was integrated into the Northern Division at this time. The railroad was aggressively marketed as an alternative through route to New York City markets, operating lucrative intermodal double-stack trains starting in 1986. The NYSW quickly grew to become the flagship of DO.^{[citation needed]}

Central New York Railroad

Shortly after the move to Cooperstown, the line purchased its second line, the Erie Lackawanna's 22-mile (35 km) long Richfield Springs Branch, in 1973 and operated it as the Central New York Railroad (CNYK). State funds were made available to rehabilitate the line in 1974, and regular freight service was operated. This line split off from the Utica Branch, and interchanged with the EL (later Conrail). When DO acquired the Utica and Syracuse branches from Conrail, the CNYK was integrated into the newly christened Northern Division. Service was suspended in 1988, and the line was abandoned in 1998 after years of disuse. The CNYK name was reactivated by the New York, Susquehanna & Western in 2004, when it was assigned to the Port Jervis-Binghamton segment of the Southern Tier Line, leased from Norfolk Southern.

Former Railroads

Cooperstown and Charlotte Valley Railroad

With Delaware Otsego operations on the Catskill Mountain Branch in nearby Oneonta drawing to a close, the company was looking for a new home. The Delaware Otsego acquired the Cooperstown Branch in 1971 from the Delaware & Hudson which ran 16 miles (26 km) from Cooperstown Junction (near Colliersville, NY) to Cooperstown. After successful negotiations, the company purchased the Cooperstown Branch from D&H and revived its original name, the Cooperstown and Charlotte Valley Railroad (CACV) by forming a new Cooperstown and Charlotte Valley Railroad company.

A former D&H RS-2 was purchased (#4022), and repainted and renumbered as #100. Diesel and steam excursions were operated for about five years, along with freight service. The last regular freight service was operated in December, 1987, and the line was embargoed afterwards. It was used for freight-car storage before being sold to the Leatherstocking Chapter, NRHS in 1996, which has since rebuilt portions of the line and offers seasonal tourist service. As of 2022, rehabilitation is in progress to reopen the entire line between Cooperstown Junction and Cooperstown, with new service planned to continue south of Milford to the NS connection.

Fonda, Johnstown and Gloverville Railroad

In 1975, DO purchased the Fonda, Johnstown and Gloversville Railroad (FJG) and managed to turn it around into a profitable operation. The recession of the early 1980s took its toll, and the railroad was shut down in 1984. A final run with a Trackmobile was made in 1988 to clear the line of any remaining railroad equipment. Most of the FJ&G route has been converted into a rail trail.

Lackawaxen and Stourbridge Railroad

The Erie Lackawanna suffered severe damage as a result of flooding from Hurricane Agnes in 1972, forcing the company into bankruptcy and reorganization. By 1974, it was clear that the Honesdale Branch was not to be included in the Conrail plan, despite having many customers on the line. Officials from Wayne County campaigned to save the line, and searched for an operator to take over the branch. In March, 1976, the DO was approached with the possibility of operating the line, and expressed interest. The Lackawaxen and Stourbridge Railroad (LASB) was created to operate this branch, and a special order was handed down from the ICC directing operation of the line until a purchase agreement could be worked out. The first LASB train departed on April 1, 1976. The railroad enjoyed various forms of success operating passenger excursions as well as regular freight service. In 1989, the DO bowed-out and the newly formed Stourbridge Railroad (SBRR) took over. A flood in 2005 severed the line, and a failed attempt by Morristown and Erie Railroad to operate the line resulted in the abandonment of all operations in 2012. Ten years later (2022), however, the entire railroad sees passenger service under new ownership, as The Stourbridge Line.

Staten Island Railway

The earliest portions of the Staten Island Railway were built in 1860, connecting the ferry landing at Tompkinsville with the village of Tottenville, New York. Looking to expand into the New York City area, the Baltimore and Ohio Railroad purchased the line in 1885. The B&O financed the construction of new ferry terminals and slips at St. George, as well as a branch along the north shore of the island to connect to New Jersey via a bridge over the Arthur Kill. Known as the Staten Island Rapid Transit, the line provided freight and passenger service to the island, and the passenger service was electrified in 1925. In 1971, the rapid transit passenger operations were turned over to the Staten Island Rapid Transit Operating Authority: a division of New York's Metropolitan Transportation Authority.^[11]

The B&O and successors Chessie System and CSX Transportation continued to operate freight service on the island until 1985, when SIRT was sold to the Delaware Otsego Corp. Operated as the Staten Island Railway (SIRY), mostly with spare equipment and crews from the Susquehanna, little was accomplished in the way of improvements. Crews were based out of Arlington Yard, and sometimes would be called to work the neighboring Rahway Valley Railroad, acquired by DO in 1986. One of the last regular freight moves off Staten Island took place in March, 1991. The railroad filed for abandonment in December, 1991, and AK Drawbridge was left locked in the raised position. The lines on Staten Island were subsequently transferred to the New York City Economic Development Corp. and the Port Authority of New York and New Jersey, which have restored the bridge and developed ExpressRail to service the Howland Hook Marine Terminal.

Rahway Valley Railroad

The earliest ancestor of the Rahway Valley Railroad was the New York & Orange Railroad, chartered in 1897, connecting the four miles (6.4 km) between Kenilworth, New Jersey to a connection with the Central Railroad of New Jersey (CNJ), and later with the Lehigh Valley Railroad (LV). Never turning a profit, the line closed and was sold at foreclosure in 1901. The New Orange Four Junction Railroad was formed to take over the NY&O in 1901, and was looking to expand to Summit, New Jersey. This project failed as well, and the NY&O and the NOFJ were combined into the new Rahway Valley Railroad (RVRR) in 1904. By 1906, the railroad was extended to Summit, but interchange with the Delaware, Lackawanna and Western Railroad would not be established until 1931. The railroad experienced its share of rise and decline between the wars, but managed to remain profitable through the postwar era. The formation of Conrail in 1976 took away the railroad's competitive connections, and an increasing number of railroad customers were switching to trucks.

Delaware Otsego acquired the venerable Rahway Valley Railroad in 1986 after it was unable to secure liability insurance. Freight traffic had dropped-off significantly by this time, and service was frequently provided by Staten Island Railway (SIRY) crews. Primary interchange was moved to the former CNJ connection at Cranford, New Jersey. After years of declining traffic levels, DO shut down the RV in 1992. The remaining property was acquired by Union County in 1994.^[12] On May 9, 2002, the Morristown & Erie Railway entered into a 10-year operating agreement with Union County to acquire and rehabilitate the remaining RVRR and SIRY lines in New Jersey.

Toledo, Peoria and Western Railway

In 1995, the NYSW acquired a 40% interest in the Toledo, Peoria and Western Railway (TPW), with full control going to DO in 1996. During this time, this regional railroad that operates in Illinois and Indiana was dispatched from the DO offices in Cooperstown, New York. Some TPW locomotives were painted in the Susquehanna's distinctive yellow-and-black paint scheme during this time. The TPW was acquired by RailAmerica in 1999.

Delaware Otsego railroad ownership timeline

Current
- New York, Susquehanna and Western Railway (1980)
- Central New York Railroad (1973)
Former
- Cooperstown and Charlotte Valley Railroad (1971)
- Fonda, Johnstown and Gloversville Railroad (1974)
- Staten Island Railway (1985)
- Rahway Valley Railroad (1986)
- Toledo, Peoria and Western Railway (1996)
Never materialized
- Kingston Terminal Railroad (1980)

References

^ "Delaware Otsego System". Archived from the original on 2007-02-21. Retrieved 2006-09-18.
^ "DELAWARE OTSEGO CORP Annual Report (Regulation S-K, item 405) (10-K405) Item 2. PROPERTIES". Archived from the original on 2007-09-30. Retrieved 2006-09-18.
^ ^a ^b ^c Cummings, Andy (November 2007). "Obituary - NYS&W's Walter Rich, 1946-2007". Trains. Vol. 67, no. 11. Kalmbach Publishing. p. 17. Retrieved November 7, 2024.
^ ^a ^b ^c ^d ^e ^f ^g Hartley (1988), p. 29.
^ ^a ^b Hartley (1988), p. 30.
^ ^a ^b Hartley (1988), p. 32.
^ Hartley (1988), pp. 31, 33.
^ Tupaczewski (2002), pp. 90, 91.
^ "DOCP Acquisition LLC Completes Merger of Delaware Otsego Corp. - Business Wire | HighBeam Research: Online Press Releases". Archived from the original on 2011-05-16. Retrieved 2006-11-28.
^ "'Docp Acquisition LLC' - Filings - Page 1". SEC Info. Archived from the original on 2012-09-14. Retrieved 2016-11-28.
^ Drury, George H., The Historical Guide to North American Railroads, Kalmbach, 1991. p. 312-313
^ "Rahway Valley Railroad". Trainsarefun.com. Retrieved 2016-11-28.