Behind-the-scenes talks to relocate Hamilton's waterfront rail yard — and radically remake the west harbour — are picking up steam as the sale of U.S. Steel looms.

Stuart Street has been a rail hub for more than a century, at one point boasting a passenger station at Caroline Street and later a massive freight terminal in the 1960s. Today, the 22-track shunting yard still blocks public use of 24-plus hectares of harbour land between Bay Street and Dundurn Castle.

That means train cars full of chemicals, fuel, asphalt and other industrial materials are "shunted" — sorted into new trains for local delivery — just steps from places like the waterfront trail and Bayfront Park.

Since the 1990s, the city has tried repeatedly to convince owner CN to move, most memorably by funding a controversial study on relocating to Aldershot for $100 million.

But the city now has an "imminent opportunity," created by the expected departure of U.S. Steel just a few kilometres to the east of the rail yard, said Mayor Fred Eisenberger.

"It is a big play, no question," said the mayor, who suggested several agencies and governments need to be involved. "But the window of time in terms of what is happening with U.S Steel is potentially very small, so there is some urgency to move on this."

The biggest deadline involves the steelmaker, which has said it wants to sell its Hamilton plant and surplus lands around piers 16 to 18 by the end of the year. An obvious suitor is the land-starved Hamilton Port Authority, which is refusing to comment on any possible negotiations.

Hamilton bureaucrats haven't recently broached the topic of the Stuart Street yard with CN, said city manager Chris Murray — but he's been told the company is talking with the port authority about the future of area rail infrastructure, including the yard.

That's not surprising, said former port authority head Keith Robson. He said the agency has long craved a modern rail hub and distribution centre.

Robson, now a consultant, said the agency discussed the idea as far back as 2006 when it bought 42 hectares of U.S Steel land on Pier 22. "A brand-new rail yard, purpose-built for today's shipping needs, I could see that being attractive to all parties," he said.

There are other deadlines in play, too.

Regional railroad operator Genesee & Wyoming recently took over a long-term management lease for the shunting yard that expires in 2018. Vice-president Jean-Marc Montigny said the company is interested in extending the lease with CN, but so far, that hasn't happened.

The city is simultaneously working on a plan to sell and redevelop 20 properties directly south of the rail yard, with a presentation to council expected late this year.

That land — controversially bought for $8 million in 2010 for a Pan Am stadium that went elsewhere — is the centrepiece of a planned west harbour resurrection featuring park space, new businesses and homes.

But at the moment, it also includes a rail yard-shaped hole — and an Ontario Municipal Board-ordered ban on housing in a 150-metre band surrounding the CN land.

"We can't just leave it like that forever," said Coun. Chad Collins. "If we treat relocation as just a dream, absent from our official plan and budget process, (the yard) will just sit there for another few decades."

Collins and downtown Coun. Jason Farr are approaching residents about forming a "rail yard task force" to explore the costs, opportunities and obstacles involved with moving the facility.

Count in Bill Curran, a local architect who helped a group of concerned citizens create a vision for the rail lands in 2012 — after the city left the yard out of a new secondary plan for the neighbourhood — that included condos, stores and green space.

"It's the next big thing for the city. It's game-changing," he said. "It connects the downtown to the water; it connects major civic amenities like Dundurn and Bayfront."

Curran's firm provided pro-bono "visioning" drawings to the city and calculated how much land — almost 20 hectares — would be available for development without the rail yard.

It's important to remember the railroad tracks won't disappear along with the yard, he noted. The main CN line would continue running along the water — as would new GO tracks to the under-construction James Street station.

Curran doesn't see that as an impediment, arguing a regular rail line isn't as noisy or dangerous as a working rail yard. Pedestrian bridges could span the CN and GO tracks, he said, with traditional lights and gates used to control road crossings.

The group's vision for the swath of reclaimed land between the main line CN tracks and the water includes carefully spread-out apartments or condo towers — to avoid "walling off the waterfront" — as well as hectares of new parkland and a widened waterfront trail that includes a separate bike path.

"It's not a finished plan; it's the start of a conversation," he said. "It's meant to get people talking about the possibilities, to show how transformational this could be."

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Not everyone is convinced radical change is necessary. "We don't mind the noise or the view. It's like watching a miniature train set from up here," said Rein Ende, who moved into his hilltop Crooks Street home overlooking the yards a decade ago.

"I'd rather look at toy trains than condo towers," said the retired teacher, who nonetheless would applaud the addition of parkland at the water. "But I'm not too worried. I don't think (CN) will move out of generosity."

CN isn't willing to publicly discuss the prospect of a move. "CN is not planning to relocate Stuart Street yard, which remains an important rail car classification site for … Hamilton industry," said spokesperson Mark Hallman in an email turning down repeated interview requests dating back to November.

But Curran argued the company could get "a very palatable price" for the waterfront land. "It wouldn't have to be a completely altruistic gesture," he said. "They've moved rail yards in other cities. They can do it here."

Former downtown rail yards are being redeveloped in Toronto and Regina, while Barrie is eyeing an old rail station for commercial resurrection.

Many other cities are routinely rebuffed, however. Sudbury has studied relocating CP lines out of its downtown, but the rail company argues the move is unnecessary.

Cities can theoretically use federal legislation to try to force the relocation of rail infrastructure, but it rarely happens, said transportation consultant Mary-Jane Bennett — especially since the municipality can be legally obligated to pay a big part of the bill.

"If a rail facility moves, it's usually because the rail company wants it to happen," she said, adding Hamilton's 1990s estimate of $100 million is probably out of date.

Physical relocation costs, usually covered by government, are only part of the equation, she said. Rail companies also seek compensation for operational costs, like trains forced to travel farther to off-load cars.

An early 2000s proposal to move the Hamilton shunting yard to the east end of Burlington Street, near Woodward Avenue, lost momentum over the need to build at least three overpasses, recalled Eisenberger.

There is plenty of room and various rail spurs criss-crossing U.S. Steel lands. But rail companies prefer to keep "working yards" on the main line, rather than force trains to backtrack on spurs, said Sydney Hamber, a broker who helped amass land for CN in Milton.

"They also don't like people living too close to an active yard," he added, pointing to noise complaints and liability concerns. The city learned that the hard way recently when CN forced council to back down on plans to allow new housing within 150 metres of the existing Stuart Street yard.

But Hamber also knows better than to give up.

He stepped in to broker a deal in the late 1990s when the city was stymied in its efforts to buy a narrow strip of harbour land from CN that eventually became the waterfront trail.

"Things always change. There's always a new opportunity," he said.