(The following story by Chuck Ayers appeared on The Morning Call website on January 23.)
ALLENTOWN, Pa. — The short-line railroad at the former Bethlehem Steel plant has been sold to a group of former Steel executives who plan to build and operate a new rail-to-truck distribution center on Bethlehem’s South Side.
The railroad is the latest Steel asset to be sold by International Steel Group of Cleveland, which purchased the company’s holdings in bankruptcy court in May.
J. Michael Zaia, a principal of Lehigh Valley Rail Management, said the group plans to move the rail-to-truck center from its site on former Steel land to another tract near Cokeworks Road, just outside Hellertown.
Gov. Ed Rendell in October awarded $1.3 million to the Philadelphia, Bethlehem & New England Railroad, the predecessor of Lehigh Valley Rail, to build BethIntermodal to connect commercial railroads and truck docks in the industrial parks planned for former Steel land.
Moving the intermodal will allow quicker access to Route 78, which is less than a mile south of Cokeworks Road.
Zaia declined to disclose a sale price for the short-line rail network, which serves the businesses in the industrial parks on 1,600 acres of Steel brownfields under redevelopment by Lehigh Valley Industrial Park Inc. and Majestic Realty Inc. of California.
Brownfields are lands, usually industrial sites, that have been contaminated and must be cleaned up before they are developed.
Lehigh Valley Rail said BethIntermodal provides storage and allows shippers to use multiple modes of transportation in their supply networks, which lowers costs.
City officials said the operation of an intermodal, as well as the short line, were key components to redeveloping the brownfields.
”It is critical that a short-line railroad is operating in the commerce center because of the large amount of rail-served acreage in the commerce center. Of the 1,600 acres being developed by LVIP and Majestic, almost 1,000 acres of it will be rail-served,” said Tony Hanna, Bethlehem’s director of community and economic development. ”This sets us up to have a really unique industrial park.”
Since the shutdown of Steel’s steelmaking operations, the short line has carried a broad range of commodities, including lumber, plastics and agricultural products.
The short line has interchanges with two major commercial lines, the Norfolk Southern and Canadian Pacific railways. The short line increased capacity in 2003 by adding new rail connections that allows the railroad to handle 70,000 cars a year, up from fewer than 25,000 in 2001.
In the last two weeks, International Steel has signed agreements of sale with LVIP for 1,000 acres and with the Freedman Co. of New Jersey to purchase Martin Tower, the former Steel headquarters.
Mayor John Callahan said the sale of the short line to the local train group bodes well for development of the industrial park.
”The intermodal aspect of the site is very important to Majestic, LVIP and it just makes that site that much more attractive,” Callahan said.