Santa Cruz County RTC ends rail operator contract, plans interim trail

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The Santa Cruz County Regional Transportation Commission has formally terminated its contract with the designated rail operator, Saint Paul and Pacific Railroad, a subsidiary of Progressive Rail Inc. The commission plans to pursue an interim design for the Coastal Rail Trail that would place the trail in the center of the rail corridor, instead of alongside the tracks. This move is aimed at freeing the commission to construct the trail segments without triggering adverse abandonment, which the rail operator has refused to agree to.

Why it matters

The commission's decision to end the rail operator contract and pursue an interim trail design is a significant shift in the long-running debate over the future of the rail corridor in Santa Cruz County. It comes after voters overwhelmingly rejected a 2022 ballot measure that would have favored placing the trail at the center of the corridor, rather than alongside the tracks. The commission's move is seen by some as defying the will of local voters, while others argue it's the only way to make progress on the trail amid ballooning project costs.

The details

The commission voted to officially cut ties with Saint Paul and Pacific Railroad, which has been the common carrier on the Santa Cruz Branch Rail Line since 2018. The commission cited the rail operator's failure to meet minimum rail car service totals and fulfill maintenance obligations, forcing the commission to spend its own funds on repairs. The rail operator disputed this, claiming the commission's failure to complete necessary repairs kneecapped its ability to fulfill the contract terms. The commission also voted to amend agreements with the city of Santa Cruz and the county to pursue new designs for the Mid County segments of the Coastal Rail Trail, with the goal of placing the trail in the center of the corridor instead of alongside the tracks.

• The commission made its intention known at a Jan. 15, 2026 closed session meeting when it directed its staff to issue a notice of termination of the existing agreement with the rail carrier.
• The commission voted to officially terminate the contract with Saint Paul and Pacific Railroad at its public meeting on February 5, 2026.

What they’re saying

What’s next

The commission must apply for its common carrier status at the federal Surface Transportation Board, and though it plans to serve as a non-operating carrier, it will still be responsible for facilitating freight operations near Watsonville. The commission also plans to explore options to retrofit the Capitola Trestle as a trail within a separate project lead by the city of Capitola under the commission's oversight.