North Charleston, S.C., rail plan worth $73.4 million annually

Written by jrood

A summit bringing together parties from all sides of the North Charleston commercial rail debate was always likely to be somewhat contentious, the Charleston Regional Business Journal reports. But an economic impact study released by a public-private partnership could ratchet up tensions ahead of the Sept. 9 meeting of the Review and Oversight Commission on the State Ports Authority.

The report, commissioned by
North Charleston, CSX Transportation and Shipyard Creek Associates, found that
an intermodal rail yard and warehouse complex proposed by the trio would create
hundreds of permanent jobs in South Carolina and generate millions of dollars
annually for the state.

The Perryman Group, a Waco,
Texas-based research firm, produced the study, which concluded that the North
Charleston rail plan would generate $111.9 million in additional output and
1,410 jobs during the construction phase. Ongoing annual stimulus from
operations would mean $73.4 million in additional output and 869 permanent
jobs, the report found.

"We knew our
commercial rail plan would have a hugely positive economic impact on the region
and the state," said North Charleston Mayor Keith Summey.

The North Charleston plan
would see Shipyard Creek’s Macalloy property and CSXT’s Cooper Yard transformed
into an intermodal rail yard and large-scale warehousing operation. The
facility would provide near-dock rail access to the new SPA terminal under
construction at the former Navy Base.

The plan also would remove
3.2 miles of CSXT rail track in North Charleston, build roughly a half-mile of
new track and renovate another half-mile of mostly dormant track.

CSXT, the city and Shipyard
Creek signed a memorandum of understanding cementing the partnership last
month. The group is now working on acquiring federal funds for a planning
grant.

The study’s take on a rival
plan being touted by S.C. Public Railways, a for-profit arm of the S.C.
Department of Commerce, and Norfolk Southern Corp. was not nearly as positive. That
proposal calls for a single intermodal terminal to service both CSXT and
Norfolk Southern at the North end of the Navy base. Northern rail access would
run afoul of a 2002 memorandum of understanding between the North Charleston and
the SPA prohibiting such movement.

The facility also would
have to be constructed on land owned by the Clemson Restoration Institute,
North Charleston, The Noisette Co. and others. Those tracts could face
condemnation through eminent domain, which would negatively impact the existing
tax increment financing for improvements on the old Navy Base, according to the
study.

The Perryman Group analysis
of the Clemson site plan concluded it would result in $426 million in reduced
output annually for the state and 4,963 lost jobs once it was up and running.

"This project …
requires substantial elimination of existing activity and serves as an
impediment to other planned investments and community development," the
report said. "In fact, some 2,000 workers in 80 buildings (many of them
historic) would be displaced, resulting in a reduction in public and private
sector jobs and production."

The study also noted that
North Charleston has first right of refusal if the Clemson University does not
develop the tract as a wind turbine test facility. The city donated the land to
the university with that deed restriction in place.

"As a regional rail
solution is developed, Commerce and Public Railways are committed to a solution
with the least impact that will yield the highest number of jobs for the local
and state economies," Commerce spokeswoman Kara Borie said in a statement.

Players on all sides of the
North Charleston commercial rail debate will finally sit down face-to-face Sept.
9. Representatives from S.C. Public Railways, CSXT, Norfolk Southern, North
Charleston and a litany of other interested parties are expected to be in
attendance. The emergence of a letter from the president of Maersk Line’s North
America operations will also likely shade discussions.

"It is vitally
important for the Port of Charleston and Maersk Line that quality on-dock rail
access exists for both Class 1 railroads serving Charleston to ensure its
competitive future relative to other major ports," Maersk’s Michael White
wrote.

White referenced the APM
Terminals in Virginia, a facility that provides equal dual access to both
lines.

"We believe that the
same can be achieved in Charleston, to the significant benefit of the port and
its customers, if both railroads are given a clear message by your oversight
committee that this must be achieved," he said.

Maersk is the largest
container shipping line in North America.

Commission Chairman Sen.
Larry Grooms, R-Bonneau, said the meeting was not being held to examine any
plan in particular, but to get input about what is needed for a successful rail
project.

"Every interested
party, if given to their own devices to devise a rail plan or port plan, would
do it differently," he said.

Grooms, also the Senate
Transportation Committee chairman, said the commission would likely hold a
subsequent meeting and release a report on its findings before the end of the
year.

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