(The following story by Jane Roberts appeared on The Commercial Appeal website on March 20.)
MEMPHIS, Tenn. — The Burlington Northern Santa Fe Railroad was promised $4.4 million in tax breaks Friday to expand here instead of in Mississippi or Marion, Ark.
In its application to the Memphis and Shelby County Industrial Development board, BNSF proposes investing more than $45 million in its yard off Shelby Drive to more than quintuple the number of intermodal containers it annually transfers, moving from 180,000 today to more than a million in 15 years.
The IDB granted BNSF a nine-year tax freeze with chances it could be extended to 11 and 13 years if the railroad meets growth projections.
Initially, BNSF would hire 150 people, paying a median salary of $32,420 for an annual payroll exceeding $4.6 million.
“This has the possibility of being one of the largest projects that has come through here in years,” said Chris Saenger, member of the IDB. “The jobs aren’t in the name of the railroad but in the companies that would move here.”
In phase one through 2007, BNSF proposes buying at least 91 acres near its yard at 5124 Shelby Drive and ramping up to achieve 400,000 lifts by the fifth year of the payment-in-lieu-of-taxes — or PILOT — program.
If the railroad achieves 500,000 lifts in the ninth year, the freeze would bump up to 11 years, saving BNSF more than $3.7 million in real and personal taxes.
To get a 13-year freeze, it would need to achieve 700,000 lifts by the 11th year.
The international intermodal business is one of the fastest-growing segments of the rail business, accounting for the huge number of imports coming in the United States from the Pacific Rim.
“All that business coming into the West Coast is headed to Chicago, Dallas/Fort Worth and Memphis,” said Patrick Thompson, BNSF spokesman.
“Memphis has the potential for the greatest growth because it is the most eastern facility we have.”
After the railroad unloads the containers, using giant cranes, the boxes are placed on trucks for distribution throughout the Southeast or sent to local distribution centers for eventual shipment across the nation.
Alliance, Texas, illustrates the kind of growth Memphis can expect from investing in intermodal infrastructure.
From 1994 to 2003, it increased its lift capacity by 313,000, adding 18,000 jobs due to the intermodal business and attending ant warehouse economy it attracts.
“Intermodal facilities tend to be magnets for distribution centers and warehouses to cluster around,” Saenger said.
The deal was approved contingent upon an environmental impact study. If significant industrial pollution is detected at the site, the deal could be off, said IDB counsel Mark Beutelschies, because an expensive cleanup would diminish the project’s value.
“This project is in competition with green spaces in Marion and Mississippi that don’t need cleanup,” he said.
BNSF is still considering the other sites, Thompson said.
Local intermodal authority Robert Millner said the project holds such potential, “the city ought to give the railroad whatever they ask,” he said.
“This is important enough to be substantial.”