Cincinnati voters decided to approve the sale of the city-owned Cincinnati Southern Railway to Norfolk Southern by a close margin of 51.56%, with 100% of precincts reporting.
The corporation will pay the city $1.6 billion in a single lump sum payment; the city will establish a trust fund with the money, investing the principal and spending the investment returns on maintaining current infrastructure.
Members of the CSR Board of Trustees declined an interview request Tuesday night.
"The CSR Board of Trustees are excited about the historic value this remarkable asset will now deliver to current and future generations of Cincinnati citizens," said Board President Paul Muething in a statement. "[We will] secure the services of a financial advisor, as prescribed in Ohio law, who will work with the Board to develop an investment policy and then, with expert fund managers, ensure the responsible, diversified and professional management of this new financial asset."
Mayor Aftab Pureval said Wednesday he's relieved the sale passed and calls this an inflection point for the future of the city.
"Passing Issue 22 now ensures that future generations of Cincinnatians — not just in the next four or eight years, but over the next 100 years — can rely on this trust fund to make sure that the city continues to have the funds to prioritize basic services that people expect from City Hall," he said.
Pureval adds the narrow victory shows many residents still don't trust City Hall.
"We are committed to continuing to be as accessible as possible, to speak clearly and openly about our positions, to educate the public as much as we can, to earn back that trust," he said.
Norfolk Southern declined to make a representative available for an interview Tuesday.
Spokesperson Tom Crosson said in a statement the sale is a victory for Cincinnatians.
"Current and future generations will reap the benefits of new infrastructure investments, helping to create a better future for the city," Crosson said. "Now, we will work with the city to finalize the sale, which we expect to close in Q1 of 2024."
Norfolk Southern spent $4.2 million dollars on the campaign through mid-October; final spending information will be available when the next campaign finance report is due in December.
Opponents of the sale say they're disappointed in the results but will turn their efforts to keeping city officials accountable to promises made regarding how the money will be invested and spent.
"Looking forward, we have to come up with some way to hold the city's feet to the fire and make sure that the things that they promised or insinuated that was going to happen with this investment fund actually happen, because they put a lot of expectations out there," said Todd Zinser of West Price Hill, who organized one of a few different opposition campaigns.
RELATED: How Cincinnati could spend the money from the Cincinnati Southern Railway sale
Results are unofficial until certified by the Hamilton County Board of Elections. You can see an interactive version of the unofficial results on the BOE website.
Learn more about the sale in WVXU's pre-election guide: 34 questions about the Cincinnati Southern Railway sale, answered.
What happens next?
Official closing of the sale will take place no later than March 15, 2024.
Norfolk Southern has agreed to pay a transaction extension fee in December, January, February and March. The amount of each payment could vary; it starts at 1/12th of the full payment price ($1.62 billion) and is multiplied by either 4%, or the current yield for U.S. Treasury bills (more specifically, the coupon equivalent rate for 13-week bills).
One-twelfth of $1.62 billion is $135,000,000; multiplied by 4%, the payment would be $5.4 million.
The yield for U.S. Treasury bills has been above 4% for all of 2023 so far. The most recent coupon equivalent from Nov. 7 is 5.44%, which would equal a payment for the city of $7,344,000.
The sale requires approval from the Surface Transportation Board, an independent federal agency; the STB reviews each sale "to make certain that it does not substantially lessen competition, create a monopoly, or restrain trade, and that any anticompetitive effects are outweighed by the public interest."
RELATED: Why does Cincinnati own a railroad?
The STB decided Sept. 20 that the sale of the CSR to Norfolk Southern does not have any anticompetitive effects. In the same decision, the STB approved an agreement that allows CNOTP to continue operating on the line once the sale is complete.
