On down the line: We're one of only two states to own a railroad should we?

• Author: Martin, Edward
• Position: COVER STORY

Their lights looming out of rain and fog, the soot-black engines seem ghostly, save for the tremor they create underfoot. Norfolk Southern diesel 8719 and its twin, 9867, together pump out 8,000 horsepower as they lug a long line of boxcars, tankers and flatcars. Veteran trainmaster Clint Broderick watches as the locomotives gradually disappear into the murky dawn up the track, while far behind, their cars still roll past him. "Probably 132 at least," he says.

Finally, the last clear the 40-acre tangle of rails that make up Norfolk Southern Corp.'s terminal near downtown Charlotte. Booms echo as massive, remote-controlled yard engines, their handlers walking alongside like mahouts, slam empty cars together to form new trains. Early Amtrak riders arrive at the passenger station. The tappings of commerce are familiar here.

In the 1930s, Allen Gant got a telephone call in Glen Raven, a crossroads outside Burlington 110 miles up the line. The textile executive, a pilot, flew to Charlotte. Waiting in the Pullman car that had carried him from Wilmington, Del., was a brilliant, moody chemist whose new discovery would change what the world wears. Wallace Carothers' mission made millions for Glen Raven Mills. "The president of DuPont had given him instructions to share the secret of making nylon with Daddy," says Allen Gant Jr., the current president. The company, founded in 1880, thrived through the Depression and beyond on nylon and other innovations, including pantyhose, which Gant Sr. invented in the 1950s.

Throughout, the Gants have relied on these rails. Their forefathers helped lay them before the Civil War, and trains delivered the coal that fired the massive steam engine that powered the mill. Today, Glen Raven Inc.'s logistics arm moves goods on them. "You put all those dots together," Gant says, "and it's going to tell you how important North Carolina Railroad has been to us and the state of North Carolina."

Formally, that's North Carolina Railroad Co. Most Tax Heels don't know they own a rail line. It's the state's oldest corporation, chartered in 1849. Starting at this gritty rail yard near 12th Street in Charlotte, it's about as wide as a baseball pop fly but arches 317 miles across the state. It bisects the urban and industrial heartland, traverses miles of farm fields to link some of the largest agribusinesses and spans coastal rivers and bays on bridges barely wider than the locomotives hauling goods to cargo ships at the Port of Morehead City.

The state doesn't run the trains. Leaseholder Norfolk Southern does, along with Washington, D.C.-based Amtrak for passenger service. But it owns the ground and rails they run on. Alaska is the only other state to do so. NCRR operates as a private corporation and, unlike most state agencies, turns a profit. Five days before Christmas, President Scott Saylor drove to downtown Raleigh from the railroad's headquarters in an office park to hand deliver a $15.5 million dividend check that the N.C. Department of Transportation will use to improve freight service and safety and for rail-related economic development. "The railroad sets North Carolina apart in competing for new jobs," Saylor says. "It also generates revenue and tax base at zero cost to the state's taxpayers."

Though it has appreciated almost $200 million since 1998, largely through income plowed into improvements, officials and economists are loath to put a price tag on NCRR. "What's it worth? The question is more than rhetorical," says state Sen. Fletcher Hartsell Jr., a longtime Republican legislator from Concord who regularly takes the train to Raleigh. "It boils down to asking what Interstate 85 is worth," referring to the superhighway that parallels much of the railroad's route through the Piedmont. Using various business formulas, the answer might be anywhere from $500 million to $4 billion. But Hartsell and others say its true value can't be expressed in numbers.

"It's part of our heritage," says former Gov. Jim Martin, a Republican who went to bat for the railroad in the early 1990s. "It's part of what caused the Piedmont corridor to grow faster than the rest of the state and to become the economic engine it has become." Now this corridor of history and commerce is at a crossroads. Sixteen years after the

state bought out private investors, including the Gants, to...