The general manager of the New Orleans Public Belt Railroad, a unique riverfront asset that includes 25 miles of tracks connecting the six major rail lines that service the city's port and nearby industry facilities, plans to step down next month amid ongoing public speculation over the city-owned railroad's potential sale.
Jeff Davis took the helm of the scandal-battered agency in 2013 after its previous general manager, Jim Bridger, was forced to resign amid charges of lavish spending. Bridger ultimately pleaded guilty to misappropriation of public funds and was sentenced to probation.
Davis, 44, this week submitted his resignation, effective at the end of the year, to become chief operating officer of a Dallas-based company that handles rail transportation logistics and short-line railroad operations.
The privately held company contacted him in recent months to gauge his interest in the new opportunity, apparently as it became clear in the industry that the New Orleans railroad's fate was uncertain.
"I've certainly enjoyed my time here at the Public Belt," Davis said in an interview Wednesday. "I would like to think I left the railroad in better shape than I found it."
Doug Campbell, the Public Belt's executive vice president and chief operating officer, is expected to be tapped to lead the agency on an interim basis.
There has been speculation about a potential sale of the railroad for two years. In January 2015, Thomas Coleman, the former CEO of International Matex Tank Terminals, announced his interest in buying the railroad. (Coleman is the father of Dathel Georges, who owns The Advocate along with her husband, John Georges.)
Meanwhile, Mayor Mitch Landrieu has publicly prodded the agency's board to consider selling the railroad, which could provide a cash infusion for the city.
But the idea has received a chilly response from local trade groups and maritime leaders, who fear that relinquishing control of the railroad could push prices higher for some users or lead to preferential treatment for others.
Ryan Berni, a top Landrieu aide who attends board meetings as the mayor's representative, plans to update the Public Belt's board Thursday about the city's next steps in the process of considering a possible sale.
"We've been clear from the beginning: Our commitment has been to put this issue to rest by actually doing the thorough analysis," he said. "Of course, there's going to be uncertainty, because there is uncertainty. ... We have to actually do this process thoroughly and fully, so that the question of what is in the best interest of the Public Belt is answered."
Six of the seven Class I freight railroads that operate in the U.S. connect at New Orleans and depend on the Public Belt to move cargo through the local port. That's the most such railroads of any seaport in the country.
Earlier this year, the city hired KPMG, a consulting firm, to evaluate the city's options for what to do with the Public Belt Railroad. The firm's findings are expected to be discussed when the board meets Thursday.
Already, KPMG has estimated the railroad's value at between $61 million and $196 million, not including the Huey P. Long Bridge over the Mississippi River in Jefferson Parish, which the agency also owns.
At its June meeting, the 10-member board reluctantly voted to move ahead with a 60-day study — which the city is paying for — to consider various options, including selling the railroad, maintaining the status quo or signing a long-term public-private partnership with an operator that would invest in the line while the city retains ownership.
At the time, several board members, including President Pro Tempore Lynes "Poco" Sloss, David Schulingkamp and Kyle Wedberg, spoke out against a sale.
Not long after that, Wedberg resigned from the board at the mayor's request, a move that some saw as an attempt by the mayor to make the board more willing to go along with a possible sale. Wedberg was replaced by longtime Landrieu aide and adviser Emily Arata.
Sloss acknowledged Wednesday that questions about a potential sale have been a distraction, and he called Davis' departure "a big loss."
"The whole process of looking at whether to keep the status quo or do a public-private partnership or sale, I think, has probably added complexity and difficulty to the job, but I think he's gotten an offer that would be foolish to refuse," Sloss said.
Davis agreed Wednesday. He said he's lost two management-level employees at the railroad in recent months as its fate remained unresolved.
"It has been a challenge to try to grow the business and bring stability to current customers and the customers that we're trying to attract," he said.
He added, "People are reluctant to sign or involve themselves in any kind of contractual obligations with us until the uncertainty with the railroad is resolved."
Though he'd largely kept quiet at the agency's board meetings as a potential sale was discussed in recent months, Davis said he's in favor of maintaining the status quo. Still, he acknowledged that the railroad is in need of capital improvements — upward of $30 million — over the next three to five years.
"The Public Belt for the last 108 years has operated under this business model that we're currently under," he said. "I think it's very successful. It's operated exactly the way it's supposed to. We are here to be the neutral party for the port. We weren't ever designed to be a profit center for the city. That was never what it was designed to do."