City gets $454,000 settlement from ICG

After it shut down its north-side line from Freeport to Centralia in the early 1980s, Illinois Central Gulf Railroad began selling off the rail line right of way. The problem was that the land wasn’t ICG’s to sell.

The recent conclusion of a class action suit provided reimbursement to the municipalities, organizations and individuals that purchased the land from ICG. Included in the settlement was the city of Vandalia.

More than 400 parties that were involved in the suit were repaid in full, plus interest, with the total amount paid out being $5.805 million. The issue was resolved after a trial court ruled that the railroad had no conveyable interest in the right of way.

The city has received a check for $454,744.96, according to Mayor Rick Gottman.

Those funds, Gottman said, have gone into the city’s general fund, to be used for “industrial development and infrastructure needs in the city.

“Our plan is to use this money as part of our efforts to recruit new business and industry,” he said.

The money ultimately could be used to replace some state monies that the city lost after Orgill decided not to locate its new distribution center in Vandalia and National Ethanol LLC backed off on its plans to build an ethanol plant here.

The city was awarded $1.246 million from the Illinois Department of Transportation for improvements to Main Street and Van Sant Avenue south of Wal-Mart and Vandalia Commons. Both developments were proposed for that area on property owned by the city.

The city has likely lost those state funds, with IDOT officials saying that the Vandalia improvement project “would have to be re-evaluated at the end of the fiscal year,” said City Administrator Jimmy Morani.

City officials are hoping that the city will still receive at least some of $1.507 million in grant monies from the U.S. Department of Commerce’s Economic Development Administration.

Most of those funds were to be used as matching funds for the IDOT grant, with $350,000 allocated as a federal match for water and sewer line improvements in that area.

Leave a Comment