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Beginning in April, the Western New York & Pennsylvania Railroad will begin hauling freight across the Southern Tier on the historic former 151-year-old Erie Railroad line.

On Thursday, the Southern Tier Railroad Authority and Norfolk Southern Corp. agreed to amend a 1998 contract to maintain freight service over the 145-mile line from Hornell west to the Pennsylvania state line and to Corry, Pa.

The agreement calls for Norfolk Southern to convey ownership of the line to the rail authority for nine years. During that time, the line will pay no property taxes. In 2011, the line will revert to Norfolk Southern and be back on the tax rolls.

The tax abatement will be in effect this fall when school taxes are due.

"As a result of the abatement, Norfolk Southern will have several years to make the line viable again without the albatross of a big property tax bill," said Donald R. Rychnowski, director of the Southern Tier West Regional Planning Board, which has worked to save the line for more than a decade.

"Local taxing jurisdictions will see the first effect of any abatement starting in 2001 for school taxes and 2002 for town, city and county taxes," Rychnow-ski said. "After the abatement period ends, municipalities will again see the property tax revenue from the line, as opposed to its total loss if the line was abandoned."

Last month, the superintendents of seven school districts along the rail line asked the authority for help because of the tax revenue they will lose for the next nine years. Up to $690,000 will be lost annually by schools along the line, including around $126,614 for the Olean School District.

Superintendents agreed to work with the railroad authority and the state to foster economic development along the line to increase tax bases.

"This strategy has been the subject of intense review and negotiations over many years, and we feel this is in the best long-term interests of southwestern New York and northwestern Pennsylvania," said County Legislator Gerard Fitzpatrick of Ellicottville, chairman of the railroad authority.

The agreement allows Norfolk Southern to sublease operating rights for the line to the newly created Western New York & Pennsylvania Railroad, a wholly owned subsidiary of the Livonia, Avon and Lakeville Railroad Corp.

Headquarters for the short line are in Lakeville, just off Route 15, south of Avon. It serves shippers north to Rochester and has been operating since 1964. It has around 15 employees and 11 engines.

Vice President William Burt, who is also a stockholder, said: "We see significant potential in the area where businesses are located, particularly in Jamestown. In April, we will begin rehabilitation and track repairs."

A priority is to repair the line west from Steamburg to Jamestown, where trains are now limited to 10 mph because track conditions. It must be increased to 25 mph, Burt said.

Engines and crews will be based in Jamestown, Burt said. He said anyone interested in working for the railroad or on a rehab crew should contact him at the new railroad.

Through a connection along the Norfolk Southern line at Waterboro -- near Kennedy -- the New York & Lake Erie Railroad of Gowanda will be able to ship over the Southern Tier main line, and the opposite will be true as the NY&LE offers a northbound connection to the Buffalo area.

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