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Monday, December 28, 2009

Missouri city to seek grants for rail siding

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Construction of a new railroad siding in the west industrial park in Washington, Mo., could begin late next spring or early summer if the city receives final approval of state and federal grant funds it's seeking, the Missourian reports. The city has received the preliminary nod for more than $2 million in state economic development grants to finance the "team track" rail siding at the end of West Main Street, according to Dick Oldenburg, economic development director.

City council members unanimously approved two resolutions authorizing Mayor Dick Stratman to pursue Community Development Block Grants, including $1.3 million in federal economic stimulus funds. The council action came following separate public hearings on the CDBG grants.

Oldenburg said the reason for the special meeting was to meet a Dec. 31 deadline to apply for a CDBG grant offered through the federal economic stimulus program.

Missouri received a "significant" amount of stimulus funds - about $6.5 million - for public job creation projects, Oldenburg explained. Washington was one of five communities "picked" for the grants, he said, and is in line to receive $1.3 million for the team track project.

The city also is applying for a "regular" CDBG grant for $750,000 to apply toward the project estimated to cost $3.5 million.

The project, under study since 2002, would provide a secure facility where local industries and businesses could load and unload products and materials onto railroad cars and trucks. It also would allow for the elimination of the rail siding along Front Street, between Cedar and Stafford streets.

CG Power Systems, formerly Pauwels Transformers, needs the rail siding to be able to ship extra large transformers it will be manufacturing at the new plant in the Heidmann Industrial Park. Other plants also have expressed interest in utilizing the siding to reduce transportation costs. Canam Steel also is interested in utilizing the rail siding to ship a "new line" of bridge steel, which will be tied to stimulus fund projects, Oldenburg said.

Oldenburg said the city plans to utilize $500,000 in tax credits awarded to CG Power Systems toward the team track, and also apply for a $250,000 grant through the federal Economic Development Administration. The city would be required to fund the balance of $700,000.

But the city hopes to apply funds already expended on buying land and allocated to build a new Westlink Industrial Drive bridge over St. John's Creek toward its match. The new bridge is needed to support the weight of the new substation transformers built by CG Power Systems, which will weigh between 250,000 and 300,000 pounds each, Oldenburg said.

City Administrator Jim Briggs said the city already has between $500,000 and $600,000 invested toward the project, including engineering and design work.

CG Power Systems recently was awarded $1 million in tax credits, which can be sold, through the Missouri Build Program, Oldenburg said. Half of those credits will be applied toward infrastructure costs on the plant the company is building and half toward the team track, he explained. To be eligible for the tax credits, CG Power Systems has to spend at least $15 million on its new plant and create at least 100 jobs for moderate- to low-income employees. "They're spending $20 million and plan to employ 146 people," Oldenburg said.

With its new line, Canam anticipates hiring 100 new employees, Oldenburg told the council. He said the city would explore the possibility of leveraging those new jobs to get up to $1.2 million in federal EDA funds.

In addition to those two "big" users, Oldenburg said he has another prospect, a glass-crushing company that's interested in shipping out its product by rail

The city's 353 Redevelopment Corporation purchased adjacent property at a cost of $325,000 for use as fill material for the team track. When that excavation and grading work is completed, it will leave a lot for a future industrial building, it was noted.

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