In a turnabout from its stated intentions, Foam Packaging has backed out of its half of a deal to purchase sections of a 4.25-mile stretch of rail line in south Vicksburg and Warren County from Kansas City Southern. Vicksburg officials, however, will soon seek a 60-day extension to a deal inked last year to help a long-planned casino along adjacent property that, if not realized, could turn the trail over for public use as a bike path, Mayor Laurence Leyens said.

In filings Tuesday with the U.S. Surface Transportation Board, Foam Packaging president Raymond B. English said a five-year transition period to have rail lines put in the company’s name made the planned purchase an “impractical decision.” The company has found other rail options by which to have goods delivered, but, when reached Thursday, English declined to specify. He did say, however, the decision does not mean the end of the 37-year old family-run business, employer of about 130.

“We’ll continue to operate with just a little increase on costs,” English said, adding materials will be delivered by truck and rail.

On Wednesday, the U.S. Surface Transportation Board issued a stay of all activities involved in closing transactions involved in the rail line abandonment. It gave all parties involved a May 28 deadline to issue statements on how it affects abandonment proceedings ongoing since December and a June 2 deadline on all replies. In March, the company was approved to purchase the northernmost, 1.9-mile section of rail lines to continue shipment of raw materials to its foam container manufacturing plant off U.S. 61 South — something company officials said at the outset of talks in 2007 was important to the survival of the business. Its purchase was to be a $376,320 joint venture with Maryland-based short-line rail operator James Riffin.

STB, which is the regulatory body for rates and most line issues in the railroad industry, cited federal law stipulating rail lines be preserved when willing offers are available.

Foam Packaging was at odds with Leyens administration-led plans to purchase 155 acres of KCS-owned right of way, including the part set to be abandoned, using money deposited into an escrow account by Minnesota-based Lakes Entertainment Inc. If development on its $200 million facility did not progress by city-set deadlines, the acreage would be converted into a bicycle trail.

“The cost is the trail. The benefit is 65 acres — if Lakes doesn’t build in a year,” Leyens said.

Lakes Entertainment’s unnamed development would be the city’s seventh casino and has been in a pre-construction phase for more than three years. The company still must show financing plans to the Mississippi Gaming Commission in order to begin construction. Once financing is approved, a development has three years to build, MGC deputy director Allen Godfrey said, adding the firm has an indefinite period to present financing plans to the state because previous rules mandating a two-year window to do so has been waived for all developments in Mississippi.

The southernmost, 2.35-mile portion of the rail line approved by the federal rail authority for sole purchase by Riffin. It includes the Glass Road trestle, partially dismantled by the Warren County Road Department in January to alleviate a traffic obstacle for ambulances and fire trucks. County officials halted the work when concerns arose about possible federal law violations. In decisions since then, STB officials have not held Warren County in violation of any laws, saying only KCS — as owner of the trestle at the time of its attempted demolition — is free to sue the county over the matter if they deem necessary.

Riffin and a New Jersey-based firm, CNJ Rail Corp., acted as consultants since abandonment proceedings began six months ago. English said he was first approached by Riffin at its outset to discuss setting up a short-line rail company — an idea English indicated he soured on over time.

“I don’t want to be in the railroad business,” English said. “I want to preserve Foam Packaging.”

Also this week, STB ruled KCS must pay $19,277 within 60 days to Riffin to pay for rebuilding the trestle using previously used bridge materials from Texas. An offer from Riffin and English to jointly purchase the entire line was thrown out by STB, on the grounds that the two previously had not established a corporate affiliation.

Reached late Thursday, Riffin said he was fully aware of English’s decision.

“It leaves a whole lot of uncertainty,” Riffin said.