Thursday, July 16, 2009

NS preps new Memphis yard site

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The land where Norfolk Southern wants to build an intermodal yard was annexed July 13 by the town of Rossville, Tenn., paving the way for the railroad’s proposed multimillion-dollar, multi-acre facility, the Memphis Daily News reports. Only one hurdle remains—getting the land rezoned industrial—before the Norfolk, Va.-based company receives the official green light to begin one of the largest economic investments in Fayette County’s history.

Although that final step won’t be resolved until next week, Norfolk Southern CEO Wick Moorman is expected to confirm that the company has selected a site in South Fayette County for the new yard, dubbed the Memphis Regional Intermodal Terminal. At 2 p.m. July 16, at the Bank of Fayette County in Piperton, Moorman and other railroad representatives will be joined by a host of state officials, including Gov. Phil Bredesen, to announce the terminal will be built on about 500 acres in the newly annexed land in southwestern Rossville. Done deal

The city this week annexed nearly 1,600 acres in Rossville’s urban growth zone, stretching from just south of Tenn. 57 down to the state line. Much of the land is owned by former Direct General Insurance Co. owner William Adair, who sold that company and subsequently paid $28 million for 3,200 acres in Fayette County and Marshall County, Miss.

Adair bought the land with plans to develop it into a mixed-use subdivision called Piperton Hills. That project is still on the table, but Adair decided to sell a portion of his acreage to the railroad for the intermodal terminal in response to Norfolk Southern’s original site location, which county residents opposed.

The initial site was north of Tenn. 57 between Rossville and Moscow near the Wolf River. Locals reacted negatively to that site because of increased truck traffic along 57 and potential damage to the Wolf River.
Meanwhile, Norfolk Southern began looking at alternative sites.

State Rep. Barrett Rich, R-Somerville, said Norfolk Southern easily could have started building at that location (dubbed the Windyke site) because of the eminent domain that railroads possess.

“Instead, Norfolk Southern, when contacted by the South Fayette Alliance and the people in Fayette County, did what they could to be a good neighbor, come into our good graces and look for other property,” Rich said. “They knew (Windyke) was going to put an extraordinary amount of distress on Rossville and that the state would have to four-lane 57 highway. They listened to the concerns and they went out looking for another property.”

Norfolk Southern will now allow its option on the Windyke property to expire and will move forward with the land owned by Adair, who declined to disclose the terms of the deal.

Also, railroad officials declined comment prior to the event, but the intermodal yard is a key component of Norfolk Southern’s Crescent Corridor, a 2,500-mile rail network linking the southeastern and northeastern U.S. The Memphis yard, using a combination of trucks and trains to move goods into and out of the area, will serve as a critical western gateway for the corridor, whose $2.5 billion price tag is being funded by the railroad and the government.

The overall economic impact of the yard on Fayette County and the surrounding area, including Memphis, won’t be known for some time. First, the completion of the facility will take years. Second, the true benefit of the yard might come from ancillary businesses such as warehouses and distribution centers that tend to sprout near intermodal yards, and the development of those could be slow because of the sagging economy.

Rossville Mayor James Gaither said the development of the yard will provide some property tax base for the city and county, but beyond that he wasn’t sure of the direct impact for the economy or for jobs. All he knows is the annexation issue cleared the Board of Mayor and Aldermen. Also, the first reading of the land’s rezoning is complete with the second scheduled for Monday. Once that is finished, the next step is for the railroad to submit a site plan before the lengthy construction process can begin.

He also knows that the Adair site is a much better choice than Windyke, which might have resulted in a groundswell of protests like the railroad is seeing with intermodal site selections in Alabama and East Tennessee.
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