(The following article by Greg Jefferson was posted on the San Antonio Express-News website on August 12.)
SAN ANTONIO — Union Pacific Railroad has agreed to allow competitor Burlington Northern Santa Fe to use its tracks to serve Toyota’s South Side pickup plant, apparently doing away with the need for a second rail line to the site.
As a result, Toyota officials said they now will use $15 million in state funding, originally earmarked for the second rail line, for infrastructure improvements on the 2,600-acre property.
Omaha, Neb.-based Union Pacific recently signed the pact with Toyota, which requires at least two rail carriers to serve its plants as a means of keeping shipping costs down.
“With this agreement, we have what we need as far as getting parts to the site,” Toyota spokeswoman Latondra Newton said.
But Union Pacific isn’t giving away access to the line ? the company’s selling it.
“Toyota paid us for the consideration,” Union Pacific spokeswoman Kathryn Blackwell said. “Sharing is different from a financial consideration. We negotiated an agreement where we are still protecting our franchise.”
Blackwell declined to say what Toyota paid for the access.
A spokesman for Burlington Northern late Monday afternoon said he was unfamiliar with the agreement and declined to comment.
Last November, before Toyota selected the Alamo City, Union Pacific’s steadfast refusal to grant track rights to Burlington angered local officials, who accused the carrier of putting San Antonio’s bid in jeopardy.
Aiming to work around Union Pacific, county commissioners created the Bexar County Rail District to build the second rail line.
County Judge Nelson Wolff contends the district ? and its planning for a second line ? eventually made the difference with Union Pacific.
“It would not have worked out if we hadn’t put the pressure on, if we hadn’t pushed them to the edge like we did,” Wolff said.
In December, Gov. Rick Perry pledged $15 million from a state job-training fund to put toward the second rail line, the cost of which was estimated at between $23 million and $28 million ? not including land purchases and engineering. The Legislature quickly approved the allocation, part of the $133 million-plus incentive package for Toyota, during its regular session.
A portion of that funding now will pay off $350,000 in loans that the county gave to the rail district largely for engineering and consulting fees, according to Seth Mitchell, the county’s intergovernmental services manager.
In June, the rail district revealed its preferred route for the second rail line: It would have stretched eight miles and entered the plant site from the east between Mitchell and Blue Wing lakes.
Newton said Toyota will use the rest of the state money for on-site infrastructure improvements but declined to elaborate, saying it was too early to identify specific projects.
The switch apparently is allowable under the law granting the $15 million.
“The legislation was broad and flexible, so that they could use that funding” for purposes other than line-building, Perry spokeswoman Kathy Walt said.
In the meantime, some new track is still in the works.
“The Toyota (site) is virtually adjacent to our right-of-way, and there needs to be some track constructed,” Blackwell said, “but the payment for that track is subject to negotiations between Toyota and ourselves.”
Toyota’s plans call for the planned $800 million plant to begin turning out full-size Tundra pickups in summer 2006, with annual production expected to hit 150,000 trucks per year.
The automaker worked out the deal with Union Pacific ? instead of simply allowing the rail district to build the second line ? because “it was more efficient to put together a direct agreement with UP,” Newton said.