click to enlarge Chris Rooney

END OF THE LINE Mike McGuire’s proposed bill would shut down the North Coast Railroad Authority for good.

Last week, the California Senate unanimously passed a bill introduced by Sen. Mike McGuire that would create the long-anticipated Great Redwood Trail, extending from San Francisco Bay to Humboldt Bay.

But don't lace those hiking boots just yet.

McGuire's proposal, SB 1029, calls for the eventual construction of a 319-mile trail from Napa and Marin counties up to Humboldt County, along railbed now maintained by the debt-wracked North Coast Railroad Authority. The NCRA was created by the California Legislature about 30 years ago.

The trail would offer hikers a path that would run through old-growth redwood forests, along the Russian and Eel rivers, and end at Humboldt Bay.

"[Senate Bill] 1029 sets the stage to turn this 300-mile long-suffering train track into a world-renowned trail system," says McGuire in a statement, "that will benefit locals and visitors alike and be a boon to our local economies."

But there's a big roadblock before any of that can occur. The cash-strapped NCRA is based in Ukiah, and as part of his bill, McGuire calls for the dissolution of the agency once it has paid off the estimated $9.1–$9.6 million in debt now on its books.

According to the California Transportation Commission (CTC), roughly half of the debt, $4.2 million, is owed to the Northwest Pacific Company (NWP Co.), which is co-owned by former North Coast Congressman Doug Bosco.

Bosco says the debt to NWP Co. is the result of the state creating the NCRA and not adequately funding it. "They never got any money from the state," Bosco says. The NWP Co. stepped in to, among other things, pay off legal debts accrued by the NCRA over two lawsuits; one was brought by the city of Novato and cost the NCRA $750,000 in legal fees picked up by the NWP Co. The NCRA and NWP Co. are currently locked into a 99-year lease, Bosco says.

Under McGuire's bill, the NCRA is obliged to pay off its debt to the NWP Co., even as the bill calls for the dissolution of the NCRA after it has paid off all its debts. So what about that lease?

"The debt would still be owed," says Bosco, who is also an investor at Sonoma Media Investments, which owns the Press Democrat.

So why doesn't the state just come in and pay off that portion of the debt, to clear the way for this much-anticipated public use trail? "It could pay the debt if it wanted to," Bosco says.

And what's the deal with a private company making loans to a public agency? "It's unusual and it's a bit concerning," says McGuire. "It will take several years to unwind the mess that the NCRA is in," he adds and notes that the authority will "hit a crisis point in their finances" this fall, which is why McGuire is pushing for his bill now.

According to recent figures from the CTC, the NCRA also owes $2.7 million to the Federal Rail Authority on a 25-year note, which runs through 2036. And, as of January of this year, it was holding about $2.2 million in accounts payable, accrued expenses, accrued interest and other liabilities, according to the CTC, which criticized the debt-plagued authority in January for failing to come up with a plan for future solvency.

The NCRA has since backed the plan for its eventual dissolution under the McGuire bill.