The Desert Line: PIR falls into default on its lease

For more than a century, railroaders have tried to turn the 75-mile Desert Line into the international freight line it was meant to be. The latest attempt by a pair of Las Vegas speculators with a checkered business history, hundreds of lawsuits against them and no railroad experience. Despite their apparent liabilities, the Metropolitan Transit System granted a 99-year lease to Pacific Imperial Railroad. Critics contended in vain it was a bad deal for the public utility, but say MTS refused to listen.

MTS boss Paul Jabolonski told KUSI News last May he had complete confidence in PIR’s owners to pay their lease and build a railroad. Then, a bombshell last week: a letter from Congressmen Duncan Hunter and Jeff Denham, demanding immediate answers about why a public agency is doing business with questionable companies and whether the lease is even legal. MTS promised answers and insisted the contract is legal.

But Wednesday, PIR pulled the rug out from under its landlord with a letter saying PIR is withholding its half million dollar payment due July 1st. Within minutes, MTS responded with a letter, serving notice PIR is in default and risks losing the lease in 10 days. The clock is ticking; control of the coveted Desert Line with its potential to generate billions of dollars a year to the region’s economy is hanging in the balance, as are questions about how San Diego’s transit service allowed this to happen in the first place.

Categories: KUSI