North Charleston, S.C., rail plan worth $73.4 million annually PDF Print E-mail
Thursday, September 09, 2010

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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