This area in Elliston is part of a 65-acre tract Norfolk Southern Corp. has identified as a desirable site for its proposed intermodal rail yard.

Photos by Justin Cook | The Roanoke Times

This area in Elliston is part of a 65-acre tract Norfolk Southern Corp. has identified as a desirable site for its proposed intermodal rail yard.

Photos by Justin Cook | The Roanoke Times

Frank Howard and his wife, Joyce, live near Cove Hollow Road in Elliston. Their home could become the property of Norfolk Southern Corp. if the intermodal rail yard plans go forward.

ELLISTON -- While lawyers argue for and against the use of state funds to build a planned intermodal rail yard in Elliston, the railroad has begun to buy land rights for the 65-acre project.

This month, Lawrence and Beverly Cooper granted Norfolk Southern Corp. permission to place tracks, signals and other rail equipment on their land on Cove Hollow Road. The railroad recorded a deed of easement April 6 in Roanoke County Circuit Court.

Last month, Ronald and Peggy Morse sold the railroad their former home and land on Cove Hollow Road. They received $575,000 for 2.7 acres, more than twice the assessed value, according to a land transfer recorded March 12 in Montgomery County.

"We took the deal because it was a good deal," Peggy Morse said, adding the couple had been planning to move anyway. They now live in Vinton.

Railroad spokesman Robin Chapman confirmed the Morse and Cooper deals are the first real estate transactions to be completed since word of the project surfaced in 2006.

The railroad and residents have begun closing land deals even as Montgomery County challenges the project in court.

Chapman explained: "The project itself remains tied up in court, but these purchases were commitments that we had already made to the landowners."

Last fall, Montgomery County sued the state on grounds that a planned contribution of $31 million toward the $50 million project cost would violate the state constitution and amount to the government improperly financing a private transportation company.

Former County Administrator Clay Goodman said last month the case -- pending in Richmond Circuit Court -- is in the document-sharing, or discovery, phase. No hearings have been held yet, according to the court Web site.

The railroad intends to build an open-air transfer point for shifting freight containers between trains and trucks. The intermodal yard will link the Heartland Corridor freight route between Columbus, Ohio, and Norfolk, immediately adjacent to the project site, and Interstate 81, a short drive away.

More land deals are likely.

James and Ardith Matz said the railroad accepted an option to buy their land on Cove Hollow Road, which county records say measures 3 acres. Paperwork has not been signed, the couple said earlier this week. They are hunting for a new place to live.

But Frank and Joyce Howard of Elliston said the railroad doesn't have a deal with them. They are willing to sell a portion of their land, but not until the railroad offers them an attractive price.

The couple speak passionately of the disruption and dislocation the project will cause them, but say they believe it will spawn economic benefits for Elliston and nearby areas.

"I think we need the jobs," Joyce Howard said.

Meanwhile, Douglas Sink of Shawsville said drawings indicate the railroad wants about 2 acres of a residential property he owns on Cove Hollow Road. He said he is open to negotiating, but railroad executives are moving slowly.

Railroad officials recently told him, "Stand tight. When we're ready we'll come see you," Sink said.