Earlier this month, the City of North Charleston put the state on notice — a federal lawsuit is on the way. Now, state senators are threatening to cut funding to the city if North Chuck moves forward with the lawsuit, which means the folks in Columbia are scared as hell.

The S.C. Commerce Department is moving forward with its plans for a state-run rail terminal servicing trains from the State Ports Authority (SPA). The plan to send some of those trains through the Navy Yard redevelopment and nearby Park Circle has residents up in arms. Short of standing in the tracks, they don’t have many cards to play. Fortunately, city officials have a handful. Two weeks ago, the city filed paperwork in federal court that lays out the potential case against the state. Here’s a look at the cards the city can play and why they could stop the state’s rail plan.

1. An Understanding: Nearly a decade ago, the city made an agreement with the SPA for the fate of the former Navy Yard. The SPA would get the southern end to develop a port terminal. The city would get the northern end for its new urban center. A lot of promises were made, including a pledge that the SPA wouldn’t send trains through the north end of the Navy Yard. The question for the court is whether the state is responsible for promises made in that Memorandum of Understanding (MOU), which was ratified by the state legislature. “The state is the state is the state,” says Brady Hair, the city’s lead attorney. “We’ve said that from the beginning.”

2. Permit Problems: The MOU could be a trump card, but the other argument in the upcoming federal suit focuses on permits for the SPA’s new terminal. Environmental watchdogs in Washington approved terminal permits based, in part, on the MOU. Sending rail cars through the north end of the base goes against what was promised in the MOU, so the city believes it is a violation of the terms of the permit. That could require a fresh round of environmental studies. Mayor Keith Summey says it’s not his intent to delay the port project, but a redo on the permitting process would no doubt set the terminal back, possibly for years.

3. Finders Keepers: In a separate case, North Charleston is suing to block the condemnation of city-owned property that is essential to the state’s rail yard plans. The sites include a city fire station that services the Navy Yard and property the city had gifted to Clemson for a wind turbine facility. The city’s case is multilayered, including an argument that the state didn’t follow the right procedure in filing the condemnation and claiming that the city is already using these sites for a public use.

4. Time to Kill: The state may see value in moving swiftly to address the condemnation case, but the federal challenge could languish in the court for years. “I’m not so sure the federal government would see it as urgent,” says Summey. And the city isn’t ruling out other legal hurdles if these aren’t enough. Right now, the state has the time to spend hanging out in the courtroom. But the closer we get to the opening of the new port terminal, the more pressing the need for the state to move forward with a rail plan — any rail plan. If only there was an option that was a little less controversial …

5. An Alternative: Late last year, the state Commerce Department rushed its plan for a rail yard, putting new train tracks on a map and purchasing hundreds of acres in a foreclosure fire sale — much of which it doesn’t actually need. All of this was in response to the city’s announcement last spring that it had reached an agreement with rail company CSX for a private rail yard to service trains from the new port terminal. Many believe that rival Norfolk Southern is twisting arms in Columbia to get legislators to oppose CSX, but the company’s plan could start looking much sweeter if this impasse drags into 2012.

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