Special Report preview: Railroad to nowhere?
The Desert Line.
Built nearly a century ago, industrialist John Spreckles overcame treacherous terrain and countless calamities to open the last intercontinental railway in America.
Decades of neglect allowed it to crumble and forced manufacturers to truck billions of dollars worth of product through a log-jammed border crossing.
A new effort is rolling, to bring the Desert Line back to life.
“San Diego is sitting on top of a neglected asset,” said former company president David Rohal.
“I don't think this opportunity would exist, either for me or the region of San Diego, had they not pursued it so tenaciously,” said Donal Stoecklein, CEO of Pacific Imperial Railroad.
The Desert Line's landlord — the Metropolitan Transit System — awards a 99-year lease to a new railroad company to rebuild the tracks and turn them into an international shipping line.
The railroad company's owners use the lease as a calling card to attract tens of millions of investment dollars.
Then, former corporate leaders make damning allegations against the owners.
“I had garnered a lot of institutional interest and individual interest in the railroad” said former company CEO Ernie Dahlman. “A lot of it kept coming to a full stop and I really didn't understand why.”
“The background of the people who own the paper is terrible,” said Rohal.
Could the new railroad company itself become the next calamity to doom the Desert Line?
“I think the business background of the owners and management always has an impact on raising funds, especially from institutional investors,” Stoecklein said. “I don't think, in this case, it's going to be a significant issue.”
San Diego's public transportation utility, now responsible to decide whether a pair of Las Vegas speculators can bring the Desert Line back to life.