WASHINGTON, D.C. — San Antonio received a pledge Thursday from a top congressional budget-writer to provide federal funding for a potential new railroad line to help land a lucrative Toyota manufacturing plant, the San Antonio Express-News reported.
“I’m extremely pleased,” Bexar County Judge Nelson Wolff said. “That’s a big step forward.”
County commissioners voted this week to create a rural transportation district to look into building a railroad spur after Union Pacific, the area’s primary rail company, said it wasn’t prepared to allow other carriers to use its tracks to service a possible Toyota plant in Southwest Bexar County.
Access to two rail carriers is a major criteria for Toyota, which seeks to use competition to lower its shipping costs.
“I don’t know if it is a deal breaker or not,” Wolff said. “But right now, they (Toyota) don’t think they have the right rail agreement.”
Rep. Henry Bonilla, a member of the House Appropriations Committee, said he received assurances from committee Chairman C.W. “Bill” Young, R-Fla., that federal assistance would be made available to a new rail district in legislation drafted by Congress when it reconvenes in January.
“Henry recently made a strong case for the economic benefits of a new rail spur in San Antonio and I look forward to crafting an appropriations bill that will fund projects of such economic benefit,” Young said in a statement.
Bonilla, R-San Antonio, said federal assistance would give San Antonio another alternative to land the Toyota plant if Union Pacific won’t allow use of its tracks by a competing carrier such as Burlington Northern Santa Fe.
“By doing this, we are telling Toyota that we are going to make it happen,” Bonilla said.
Kathryn Blackwell, general director of corporate communications for Union Pacific, said the company is negotiating directly with Toyota to come up with a satisfactory deal to both sides and does not believe federal money is the answer.
“Our position is that we feel that sort of thing should be left up to the railroads,” she said. “We don’t advocate federal funding for our system.”
Blackwell said Union Pacific has agreements with competitors to share railroad tracks throughout its system. For instance, under a merger agreement with Southern Pacific Railroad that was approved by the federal government in 1996, Union Pacific was required to preserve competition in areas such as San Antonio.
But Blackwell said the accord does not apply to new businesses, such as a Toyota plant.
“We have agreements throughout our system for competitors to run on our track and us to run on our competitors’ tracks, but not in terms of new business,” she said.
Bonilla said building tracks would be large project requiring local, state and federal cooperation.
“If we have to go an alternative route, this is going to be a bigger project than local government can handle alone,” Bonilla said.
Wolff agreed, saying the new Bexar County Rural Rail Transportation District would not have the power of taxation, and would need assistance in the form of grants and loans to complement revenue bonds and other financing.
“You would hope that Union Pacific, Burlington Northern and Toyota can work something out,” Wolff said. “But if they don’t, then we have to be able to do this. We are down to the last 5 percent of the puzzle and you just don’t walk away from a deal and not make an effort to do this.”
City officials say a Toyota manufacturing plant would bring an annual payroll of $265 million and generate 16,000 new jobs.
Jeff Moseley, executive director of the Texas Department of Economic Development, said San Antonio is seeking the same package in rail service that Union Pacific is providing the West Memphis, Ark., area, which reportedly is in the running for the Toyota plant.
Meanwhile, Wolff said San Antonio’s three other congressmen — Reps. Lamar Smith, a Republican, and Democrats Ciro Rodriguez and Charlie Gonzalez — would support a package crafted by the House Appropriations Committee to help create a rural rail district.
“That will carry a lot of weight,” Wolff said.
Young said the committee, in the past, has worked on projects designed to “rejuvenate the economy.”
Despite public jockeying for the plant by elected officials in Texas and Arkansas, who have met with Toyota officials, Dan Sieger, a spokesman for the company, said the automaker has yet to decide whether it will build a sixth plant in North America.
Sieger said that decision could come early next year.
Toyota officials are expected to meet with Arkansas Gov. Mike Huckabee, a Republican, before that decision is reached.
Earlier this month, Rep. Marion Berry, D-Ark., said he received the pledge of former President Clinton to help sway the Japanese to locate the new plant in eastern Arkansas.
Arkansas officials said a new plant would provide a phenomenal boost to an area rocked with high unemployment, and provide jobs for nearby residents in Tennessee and Mississippi as well.