(The following story by Steve Harrison appeared on the Charlotte Observer website on May 8.)
CHARLOTTE, N.C. — Norfolk Southern, which wants to build a railyard at Charlotte/Douglas International Airport, said it’s important that it gets state tax breaks for the project secured quickly. The reason is that the airport has started clearing land for a new runway, and the railroad says it would be cheaper to do its site work at the same time.
The railroad wants to build at the airport a 70-acre intermodal yard, which would allow cargo containers to be moved from truck to rail and vice versa. It would replace a smaller intermodal facility north of uptown that Norfolk Southern said is reaching capacity.
Norfolk Southern, which estimates the project will cost $93 million, secured $16.5 million in federal funding two years ago. It is seeking state tax credits of between $8 million and $9 million, and said the subsidies are essential for the project to move forward.
The railroad is hoping the N.C. Legislature grants the tax breaks this summer. The airport has already started site work for its fourth runway, and the railyard would be built in areas that are being cleared.
“We need (tax credits) right away,” said Norfolk Southern’s vice president of business development Rob Martinez, who added the intermodal facility would boost the area’s economy. “If this doesn’t work, then we have an issue. The costs would go up.”
House and Senate bills that would give the railroad tax breaks on its construction are currently in committees. State Rep. Drew Saunders, D-Huntersville, a bill sponsor, said the tax breaks could be placed in the budget within the next two weeks.
Railroads once made most of their money from transporting coal, but intermodal containers recently became the industry’s biggest revenue generator, said Tom White of the Association of American Railroads. The change has been driven mostly by the increase in international trade.
Rival railroad CSX announced in February it is spending $8 million to expand its Charlotte railyard, off Hovis Road. The expansion — which the railroad said doesn’t include public money — will allow the yard to handle 160,000 lifts, up from 80,000.
The Norfolk Southern yard is being proposed for the airport because there is available land in an industrial area. There would be very little movement of cargo from planes to trains.
Charlotte/Douglas is building a new runway parallel to Interstate 485, more than three-fourths of a mile from the airport’s westernmost runway. The intermodal facility would be built between the two runways, 40 feet below ground. Planes would taxi above the yard on bridges.
In addition to the state and federal help, Norfolk Southern wants the airport to pay for much of the site work for the intermodal facility. The railroad would then construct and own the yard, while paying a ground lease to the airport. It also would pay a fee for each container it moved.
Charlotte/Douglas aviation director Jerry Orr said the airport would create a separate department within the airport to handle the railyard, so funds designated for aviation wouldn’t be used for the project. Orr said the airport would likely float bonds to pay for the rail project, with the bonds to be repaid from proceeds from the yard.
“We’d be using the runway money for the runway,” Orr said. “We’ll segregate those dollars carefully.”
The site work for the new runway is being done by E.S. Wagner, an Ohio firm. The firm’s vice president, John Wagner, said his firm is excavating dirt for the runway from the proposed site of the railyard.
But, Wagner said, the excavation won’t go deep enough for the railyard. Work for the runway won’t be finished until the fall of 2008, which would be first date a contractor could dig deeper for the intermodal facility. No contract has been awarded for that work.
If the intermodal yard isn’t built, Orr said the area between the two runways could be used for cargo facilities, or perhaps a new passenger concourse far in the future. Orr also said that if the intermodal facility is built, the airport would still have room to build an additional runway, though that wouldn’t be needed for decades. Norfolk Southern, which owns its railyard north of uptown, would likely sell some of the land that’s dedicated to intermodal traffic.