Santa Cruz County Railroading since 1996

In 1937, the last independent railroad operation in Santa Cruz County ended leaving the entire county under the control of the Southern Pacific Railroad. This remained the situation until 1985, when the Santa Cruz Big Trees & Pacific Railway, operated by Roaring Camp, purchased the trackage between Santa Cruz Depot and Olympia. What was left—the track between Pajaro and Davenport along the coast—survived another decade before modernity finally caught up with the bullying tactics of the Southern Pacific, leading to its final demise. In its wake, the railroading history in Santa Cruz County changed drastically and continues to evolve even today.

Union Pacific Railroad (1996 – 2010/2012)

The history of the Union Pacific Railroad is virtually the history of railroading in the United States itself. The enterprise was founded July 1, 1862, via an act of Congress with the goal of connecting to the Central Pacific Railroad thereby creating the first transcontinental connection. This goal was accomplished May 10, 1869, and the two companies largely diverged from there. While the Central Pacific was eventually subsumed into the Southern Pacific Railroad (the final merger was not completed until 1959), the Union Pacific remained the predominant operation between the Mississippi River and the Rocky Mountains. For well over a century, it operated in concert with other companies, the Southern Pacific among them, but it never had much real estate in California except for the trackage of the Western Pacific Railroad, which it purchased in December 1982. That being said, from 1901, the Union Pacific actually owned the Southern Pacific, but they ran as separate operations until the Supreme Court broke the trust in 1913.

By 1988, the Southern Pacific Transportation Company was suffering and was abandoning track anywhere it could justify it. Rio Grande Industries purchased the company outright and then expanded the Southern Pacific name to all its franchies (such as the Denver & Rio Grande Western Railroad). But this still was not enough to keep it alive. In 1996, a second merger of the Southern Pacific and Union Pacific railroads was approved and the former entity ceased to be. Despite Southern Pacific acting as the majority party in the merger, Union Pacific chose to reincorporate under its own name, ending the existence of the Southern Pacific.

In Santa Cruz County, this had little immediate impact. Operations in the county were already irregular except for the Davenport cement plant traffic, and Union Pacific honestly had many other things to worry about elsewhere in the country. Still, between 1998 and 2003, unused sidings and spurs across the county disappeared, as evidenced by before-and-after SPINS maps produced by the railroad. In Watsonville and Watsonville Junction, around half of the sidings were removed or truncated to service the businesses that still utilised them. At Santa Cruz, all of the excess sidings and spurs were removed except for a single maintenance spur and the wye. Just outside the county, Union Pacific made a more drastic move by completely abandoning the remaining track between Castroville and Seaside, near Monterey, in 1999. Union Pacific chose to leave the track behind and simply remove the switch and junction track at Castroville, thereby disconnecting the Monterey Branch.

With the final closure of the Cement Plant in 2010, the Union Pacific was more keen to abandon the Santa Cruz Branch as it had the Monterey Branch a decade before. The remaining industries using the line – mostly Big Creek Lumber and a few patrons around Watsonville – were just as capable of using trucks, so Union Pacific threw in the towel. They sold the route to Santa Cruz County on October 12, 2012. Union Pacific retrains ownership of half-a-dozen spurs at the Davenport cement plant, but otherwise all trackage in the county is now owned either by the county itself or Roaring Camp Railroads.

For more on Union Pacific, see its website: http://www.up.com.

Sierra Northern Railroad (2010 – 2011)

Sierra Northern Railroad acted as the common carrier along the Santa Cruz Branch in 2010 and 2011, although the tracks remained Union Pacific Railroad property the entire time. Sierra Northern was formed out of a merger of multiple lines, including the Eccles & Eastern Railroad, incorporated by Karl and Burneda Koenig and Rick and Carol Hamman in 1988. This company had sought the common carrier license from Southern Pacific for the county, but was denied, severely limiting the railroad's potential. In 1995, it reincorporated as the Sierra Pacific Coast Railway and left the county. An entirely different entity, the Sierra Railroad, had been established in 1897 to connect the Central Valley to the Gold Country. In 1980, Sierra Railroad was sold to Silverfoot Inc., which in turn sold the railroad to the Sierra Pacific Coast in 1995. The combined Sierra Railroad and Sierra Pacific Coast purchased the Yolo Shortline Railway in 2003 and from this merger emerged the Sierra Northern Railway, a common carrier line that operates freight and passenger services on roughly 100 miles of California right-of-way.

A Sierra Northern train passing in front of the Santa Cruz Beach Boardwalk's Casino Arcade, 2009. [Wikipedia]

Knowing that the cement plant would be closing, Union Pacific was eager to give common carrier privileges to Sierra Northern, which ended up being responsible for transporting the moveable machinery out of Davenport. Since the closure of the cement plant meant that the line may prove less profitable, Union Pacific also promised common carrier privileges in a more heavily-trafficked line in West Sacramento. They subsequently failed to grant that license, though, and, in retaliation, Sierra Northern pulled out of its common carrier duties in Santa Cruz in December 2011. This coincided with the decision to purchase the Santa Cruz Branch Rail Line by Santa Cruz County in the May 2010 election. After spending over a million dollars in repairs, Sierra Northern left, forcing the county to look for a new common carrier to continue rail operations along the line.

For more on Sierra Northern, see its website: http://www.sierranorthern.com.

Santa Cruz & Monterey Bay Railway (2012 – 2017)

Since around 2000, the Santa Cruz County Regional Transportation Commission (RTC) had sought the purchase of the former Southern Pacific Santa Cruz Branch so that the line could be controlled more directly by county voters. Finally, on May 6, 2010, the RTC was able to initiate the purchase of the line for $14.2 million. Funding was secured by January 2011 and the final purchase was finished October 12, 2012. Since Sierra Northern had departed the county and Union Pacific had not sought a new carrier, the commission had to find its own carrier for the line and one that they felt they could control more directly. On May 17, 2012, after five months of no railroad service on the line, the commission approved a contract for Iowa Pacific Holdings to become the new common carrier in Santa Cruz County, operating through the newly-incorporated subsidiary "Santa Cruz & Monterey Bay Railway Company".

The Train to Christmas Town, 2012, in front of the Santa Cruz Beach Boardwalk's Casino Arcade [Lance Nix]

Iowa Pacific was incorporated as an international railroad company in 2001 based out of Chicago. It owns numerous subsidiaries in over a dozen states, as well as two railways in the United Kingdom which operate as the British American Railway Services. The carrier was licensed in Santa Cruz County to operate both freight and passenger services, although it took too much time to ensure the quality of the right-of-ways for the latter. For four years, the railroad operated the Train to Christmas Town seasonal event, which in 2012 ran between the Santa Cruz Beach Boardwalk and Wilder Ranch, but in later years has operated outside Watsonville. In 2016, it ran the Polar Express seasonal train instead, although the company failed to pay its portion of the proceeds to Warner Bros, the owner of the franchise, prompting a lawsuit. Around the same time, the county sued the company for failing to pay amounts due for Union Pacific cars that were parked on tracks throughout the line in 2016. In October 2017, it was announced that Iowa Pacific would be withdrawing from Santa Cruz County effective December 31. The company's rolling stock, except for one locomotive, were removed December 30 from the Watsonville biofuel plant spur. Shortly after leaving Santa Cruz County, the company declared bankruptcy and was wound up in March 2021.

St. Paul & Pacific Railroad (2018 – 2026)

The original St. Paul and Pacific Railroad was a shortline operation in Minnesota that operated from 1857 to 1879 before merging into the Great Northern Railway. In 1996, Progressive Rail, Inc., was founded in Lakeville, Minnesota and soon leased the Minneapolis, Northfield, and Southern Railway as its main route. It soon began expanding operations outward to Illinois, Missouri, Iowa, and Wisconsin, with additional routes leased in Washington, Oregon, and North Carolina.

The City of Watsonville of the St. Paul & Pacific Railroad on the tracks outside Watsonville. [Howard Cohen]

The financial collapse of the Iowa Pacific in late 2017 led to the company abandoning its obligations to Santa Cruz County, leaving the role of common carrier open. Following several months of assessing options, the RTC granted common carrier privileges to Progressive Rail in mid-June 2018. Although the license permitted the company to serve the entire branch to Davenport, including both passenger and freight service, only the first five miles of trackage were actually useable due to a washout beside Harkins Slough. Progressive took over common carrier duties in early August 2018 despite Iowa Pacific rolling stock still remaining on Watsonville sidings. Progressive incorporated the subsidiary St. Paul & Pacific Railroad to operate the line and soon brought in a diesel switch engine named City of Watsonville to handle the small amount of freight traffic within the Watsonville freight zone. Over the roughly two years that Progressive operated in the county, it served approximately six customers, many of whom were first-time rail freight patrons.

On July 1, 2020, due in large part from the economic fallout from the COVID-19 pandemic, Progressive Rail announced its intention to end common carrier services in Santa Cruz County and assist in transitioning that service to a new carrier. After several months of negotiation, however, the company pivoted to hiring a subcontractor to run local operations in the name of the St. Paul & Pacific Railroad. The chosen firm chosen in 2021 was Roaring Camp Railroad's subsidiary Santa Cruz Big Trees & Pacific Railway, which conveniently had two recently-purchased diesel locomotives stranded in Watsonville due to the RTC's failure to keep the branch between Watsonville and Santa Cruz in a usable state. 

On February 5, 2026, the RTC terminated its common carrier arrangement with Progressive Rail, though the railroad had not received prior notice and immediately threatened legal action. The action was in fact illegal since Progressive Rail retained the right to nominate a successor and Union Pacific had a secondary right-of-refusal. Through February and March, the two parties negotiated an amicable separation, which was approved at the April 2 meeting with the agreement to pass common carrier responsibilities onto two contractors chosen by the RTC. The termination of the Progressive Rail contract also ended the subcontract with Santa Cruz Big Trees & Pacific, rendering its two locomotives stranded on a private spur in Watsonville. 

For more on Progressive Rail, see its website: https://www.progressiverail.com.

Chicago, Rock Island & Pacific Railroad (2026–)

With the departure of Progressive Rail, the RTC split off the first three miles of the Santa Cruz Branch Rail Line as a new "Watsonville Branch Line," ending at Milepost 3, where the former line now begins. This allows the industrialized section between Watsonville Junction (Pajaro) and Lee Road in Watsonville to operate under a different common carrier arrangement than the 29 miles of the Santa Cruz Branch Rail Line. On April 2, 2026, a common carrier agreement for the Watsonville Branch Line went to the Chicago, Rock Island & Pacific Railroad, which had been Progressive Rail's preferred successor in 2020, when it first attempted to back out of its local obligations.

The original Chicago, Rock Island & Pacific Railroad is one of the oldest railroads running in the United States, with its origins in the Rock Island & La Salle Railroad of Illinois, incorporated February 27, 1847. The company's trackage grew throughout the 19th century, eventually stretching from Minnesota to the Gulf of Mexico and Chicago to Colorado. The company, facing fierce competition from Union Pacific and the Burlington Northern Railroad, went bankrupt in January 1980 and shut down. It was resurrected in 2017 as a Mississippi-based company run by Robert Riley, with common carrier contracts in Mississippi, Kansas, and Oklahoma, though it also owns its own trackage in Kansas where it operates the Ottawa Northern Railroad. Operating three miles of trackage in Santa Cruz County will be the company's first operation on the West Coast.

For more on the Chicago, Rock Island & Pacific Railroad, see its website: https://rockislandrail.com.

Santa Cruz County Coastal Rail (2026–)

The surviving 29 miles of the Santa Cruz Branch Rail Line, from Watsonville Slough to the end of track in Davenport, will be run by a nonprofit rail subsidiary overseen by the Santa Cruz County RTC called Santa Cruz County Coastal Rail. Other than negotiating with the Santa Cruz Big Trees & Pacific Railway over  trackage rights between Maple Street and the San Lorenzo River in Santa Cruz, the company does not plan to operate any rail traffic over the section of the branch under its authority and the entity mostly exists to allow the RTC to convert portions of the line to a trail by removing or paving over the existing rails as a means of avoiding formal abandonment, adverse abandonment, or rail banking. While this action will help ensure the completion of the long-delayed Monterey Bay Sanctuary Scenic Trail, connecting the Santa Cruz North Coast with Monterey and Pacific Grove, it threatens millions of dollars in federal, state, and local funding, as well as various grants, that require some form of active rail service across part or all of the branch line.

For more on the Santa Cruz County Regional Transportation Commission, see its website: https://www.sccrtc.org.

Citations & Credits:

• Hambleton, Dave. Public comments on this article.
• Hattis, PK. "Santa Cruz County RTC OK's separation agreement with current operator," Santa Cruz Sentinel, 04/02/2026.
• Hoppin, Jason. "With the rail deal apparently done, a final twist; Sierra Northern notifies RTC it wants out of deal," Santa Cruz Sentinel, 12/16/2011.
• Sloan, Steve. "Last UP Santa Cruz Local," Steve Sloan Train Photos, 2009.
• Union Pacific Railroad, Roseville Service Unit – Salinas Subdivision SPINS, 1998, 2003. 
• Whaley, Derek. Santa Cruz Trains: Railroads of the Santa Cruz Mountains. Santa Cruz, 2015.