(The following story by Eric Smith appeared on The Daily News website on March 8, 2010.)
MEMPHIS, Tenn. — The development of Norfolk Southern Corp.’s $112 million intermodal yard on a former cattle ranch in Fayette County has polarized the community for more than a year.
Proponents are excited about the project’s economic opportunities, while opponents fear it will ruin their community forever.
But both sides of the divide have one thing in common: Their objectives rely on time and money, both of which are at a premium.
The Norfolk, Va.-based railroad is striving to manage a complex schedule that calls for the 570-acre Memphis Regional Intermodal Terminal to open in early 2012 on the Twin Hills Ranch recently annexed by Rossville.
That means fulfilling the requisite environmental permits, preparing the site for construction and completing the immense infrastructure where cargo containers will be transferred between trains and trucks.
But the railroad also has funding concerns. Although Norfolk Southern received $105 million in federal stimulus money under the American Recovery and Reinvestment Act of 2009’s Transportation Investment Generating Economic Recovery (TIGER) program, half of that money is pegged for an intermodal facility in Alabama.
That leaves $52.5 million for the Rossville facility. And because Norfolk Southern has committed only $31 million of its own money for the facility, a $28.5 million shortfall remains. Railroad officials claim they will make up the difference, but they haven’t revealed how they will raise the money, which in turn prompts questions about the company’s ability to do so during a poor economy.
“Norfolk Southern is currently working with our five state partners (Tennessee, Alabama, Mississippi, Pennsylvania and Virginia) to identify other funding options,” Norfolk Southern spokeswoman Susan Terpay wrote in an e-mail.
When asked about potential sources – public or private – targeted amounts and the possibility of the company paying the balance, she replied, “We are still discussing options, so I can’t provide details yet.”
Competing interests
The railroad’s silence has infuriated some citizens who are dealing with their own set of time and money issues.
A handful of Fayette County and Marshall County, Miss., residents who believe their rural community will soon be transformed into an industrial zone resembling the intersection of Lamar Avenue and Shelby Drive in Southeast Memphis, are speaking out.
Those who want to halt the yard’s construction are in a race against the clock, their hopes growing dimmer with each day that passes and each chunk of dirt leveled to clear for an access road to the site.
The South Fayette Alliance, a nonprofit organization formed in 2008 to fight the railroad’s initial build site north of Tenn. 57 between Rossville and Moscow, is no longer active. So residents are doing what they can to jumpstart a second grassroots effort to protect their property – and their property values.
As with any small grassroots group struggling to get their message out and fighting a multibillion-dollar company such as a railroad, they toil with decisions such as hiring a community activist (see sidebar, Page 21) and waging a letter-writing campaign.
But the battle is daunting.
And seven months after Norfolk Southern made its site announcement, it’s clear the billion-dollar railroad has an advantage over its detractors.
Though their aspirations can easily be cast off as a simple NIMBY (not in my backyard) situation, their collective voice is starting to clamor for action.
Richard “Dickie” Watson, who lives in the Ballard subdivision of Piperton and keeps his horses at a stable between Rossville and Moscow, is one of them. While he admitted that residents’ efforts might be a case of too little, too late, he said they have too much to lose and won’t go without a fight.
“We don’t know if it can be stopped or slowed down, and we feel like everybody who’s anybody in the county has already found a way to make some financial gain on it,” he said. “It’s going to change, and it’s not going to change for the best.”
Shades of green
Change in Fayette County has been in the air for years as word of the railroad’s plans leaked out, but nothing became official until July, when Norfolk Southern ended speculation about where it would build the yard.
At a splashy event at the Piperton branch of the Bank of Fayette County, the railroad announced it had struck a deal to buy land owned by William Adair, whose 3,200-acre property stretches from the Mississippi state line north toward Tenn. 57.
For this report, Adair didn’t return numerous messages left at his office, which sits at the intersection of U.S. 72 and Tenn. 196 in the southwest corner of Fayette County, or on his cell phone.
But his land soon will be home to one of Norfolk Southern’s largest intermodal terminals in the nation, a facility that will be able to accommodate more than 327,000 containers and trailers annually, and up to 2,177 parked containers and trailers on chasses. A rail spur will join the yard with Norfolk Southern’s main line north of Tenn. 57, while a road will connect the yard to U.S. 72 south of the state line.
Norfolk Southern officials said they chose this site over five others, including an expansion of the company’s existing yard near the Mid-South Fairgrounds. The railroad was desperate to grow in the Memphis area, projecting an increase in intermodal traffic even though numbers declined in 2009.
The terminal is slated to be a critical link in Norfolk Southern’s “Crescent Corridor,” a 2,500-mille rail network connecting gateways like Memphis and New Orleans in the Southeast to Pennsylvania and New Jersey in the Northeast.
With an estimated price tag of $2.5 billion, the private-public project has won the support of politicians and business leaders alike who have backed the railroad’s “green” benefits, such as taking long-haul trucks off the road. To some degree that’s true. Trains are more environmentally friendly than trucks, with railroads able to move a ton of freight 436 miles on a gallon of diesel fuel, many times more efficient than trucks.
But as large swaths of rolling, tree-lined hills are decimated to make room for the facility, and as railroad officials estimate 1,600 trucks a day driving in and out of the Rossville facility, residents say they can’t fathom any environmental benefits locally.
“It might be green for people up in Pennsylvania and people that want to get shipping done by rail through our state, but it’s not green for any of us. It’s far from green,” a Fayette County resident said anonymously. “In fact, it will be devastating in terms of the pollution, both from an air and water standpoint, that it may entail.”
Logic and doing deals
Citizens have raised concerns about the yard’s proximity to the Wolf River, a source of drinking water for Memphis. If contaminants like diesel fuel soak into the recharge area of the Memphis Sands Aquifer, for example, it would be a “major catastrophe,” Jerry Anderson of the Ground Water Institute told The Memphis News for a report last year.
One of the biggest sticking points for opponents is the railroad’s environmental assessment process. The assessment is being held to NEPA (National Environmental Policy Act) standards and being administered by environmental consultant AMEC Earth & Environmental.
The railroad contracted AMEC to provide environmental assessment on the project, something residents claim is a conflict of interest.
Project manager Robin Hagerty said the environmental assessment has been released for “agency comment,” meaning any organization with a stake in the results – including private and public environmental groups – has received a copy and will need to provide feedback by March 25.
Once those comments are compiled, they will be incorporated into another draft. It then will be unveiled for a public comment period, with citizens’ comments incorporated into the final assessment. For the project to be approved, the railroad must be issued a “Finding of No Significant Impact” (FONSI) statement.
If there are findings of significant impact – such as potential damage to archaeological, ecological or historical areas – those would need to be addressed by the railroad. Hagerty said none has been identified yet, meaning the railroad likely will be allowed to move ahead in the summer.
Fayette County resident Dana Lackey said hearing this news was so depressing she couldn’t put into words. She wondered how 570 acres of concrete and train tracks being built on previously untouched land won’t have an adverse effect.
Mostly, she is appalled that the yard’s access road, to be built from the yard to U.S. 72, doesn’t fall under NEPA environmental assessment.
“To me, that’s just a loophole for them to bypass that (assessment), and it is really part of the project,” Lackey said. “If that’s the logic, then they could give the money for (Adair) to build the whole facility and then they don’t have to do any environmental assessment. The logic there is just inexcusable.”
Sound waves
Another issue upsetting residents is the overpass that will cross Tenn. 57. Not only will construction of that road take months, rerouting traffic to a temporary road, but the funding for the project remains cloudy.
The outcry doesn’t surprise Keith Loveless of the University of Memphis’ Center for Advanced Intermodal Technologies, who projected residual fallout from the residents in the facility’s target zone.
“While the negotiations have provided a palatable alternative for the masses in Piperton, we still have the individuals in the zone that will obviously be affected,” Loveless said. “It seems that there would be a contingency negotiation process in place on the parts of the folks at the railroad, in Collierville and in Piperton, but I have not heard of any.”
The railroad is promising to keep the yard as unobtrusive as possible. It said the facility will be built 40 feet below ground level because it will sit behind berms on its east side. The dirt that is cut away to create those berms will be used to fill in other parts of the footprint.
Norfolk Southern said the terminal’s light poles will stand only 70 feet tall, about a third shorter than the railroad’s standard 100-feet height. Coupled with the recessed yard, they will only stand 30 feet above ground at some points. Also, the lights are designed to slant downward, reducing the “light pollution” that is common with industrial sites and transportation yards.
Also, the railroad plans to mitigate the sounds of the trains, cranes and trucks operating on the site 24/7 by installing sound barriers. And Norfolk Southern has pledged to minimize the impact the yard has on wildlife habitats and neighboring creeks and streams.
But no matter the railroad’s insistence that the yard will blend in with the landscape, residents envision a cacophonous eyesore whose activity will continuously be heard, felt and seen by anyone within a mile or so of the facility.
“They’re going to light that yard up and we’re going to lose our stars and there’s going to be trains bumping into each other … all day and all night long,” Watson said. “It doesn’t belong in a residential, rural community. It belongs in some sort of industrial park.”
Build and they will come
An industrial park is exactly what the area surrounding the intermodal facility might become. And that’s by design.
Investec Realty Services LLC already has a sign in front of Adair’s office that advertises warehouse and commercial space for sale or lease in “Piperton Hills,” the mixed-use development Adair has planned for southwestern Fayette County.
Meanwhile, other companies have signs promoting “build-to-suit” opportunities on vacant land along U.S. 72. And the Chickasaw Trails Industrial Park, a 2,600-acre site in Marshall County, Miss., also has potential for rampant industrial development and already is home to the 700,000-square-foot Exel distribution center.
Wide-open cheap land might be a welcome sight for companies looking to establish a supply or distribution network near the Norfolk facility, but any realistic chance of development in the area is at least a year away.
Jim Mercer, executive vice president for industrial services at CB Richard Ellis Memphis, said the lag time is an advantage for the local industrial real estate market. Because the terminal won’t be online until 2012, that should allow for absorption of the city’s vast amount of vacant space, currently estimated at about 15 percent to 20 percent of Memphis’ 195 million square feet.
“In conjunction with the infrastructure out there, with the widening of 72 and the widening of 269, that’s all going to be coming together at about the same time,” Mercer said. “From that perspective, there’s clearly going to be a positive impact on development out there. There are going to be companies and users that will want to be close to that intermodal yard.”
Some sources spoke off the record about the possibility of millions of square feet in distribution planned for the immediate Piperton Hills area over the next few years creating a new submarket for the region.
Mercer said that is very realistic.
“This is the next area,” he said. “You’ll have the infrastructure. You’ve got the land. I think we’re going to see some industrial development out in that area. I think you’ll see some truck stops, you’ll see some trucking companies that work with Norfolk Southern as well as other providers that may want to be closer.”
Ancillary observers
The Norfolk Southern facility also has been championed by logistics providers, who see many benefits in an eastern railroad significantly beefing up its Memphis hub.
The new facility will be 10 times larger than Norfolk’s Forrest Yard near the Mid-South Fairgrounds, potentially bringing that many more containers into the area and giving shippers more options for moving or storing their goods.
The development is favorable for people like Ken Opperman, Memphis terminal manager of Eagle Systems Inc., a national drayage company that moves cargo containers between intermodal facilities and distribution centers.
Drayage is big business in Memphis thanks to railroads increasing their presence here and numerous companies setting up warehouses to be near the city’s transportation assets.
Opperman said Norfolk Southern’s move to Rossville has pluses and minuses.
First, he said, it will be nice for the railroad to have enough room to build an adequate facility, much like what Union Pacific Railroad did in Marion, Ark., what BNSF Railway Co. did with its Southeast Memphis yard expansion and what CN and CSX Corp. did in Frank C. Pidgeon Industrial Park near Downtown.
Also, because Forrest Yard was so congested, the move out east should reduce the train traffic through the Buntyn neighborhood (although Forrest Yard will remain operational with reduced traffic).
But there are downsides to the new location as well.
“One of the things that will add to our operation is if you aren’t going that way, it’s going to create an extra cost,” Opperman said, comparing it to the added drayage fee for deliveries to or pickups from the UP yard across the Mississippi River.
Opperman said he hasn’t figured out the added cost of traveling the extra distance to the Rossville yard, but it likely would be passed on to the customer.
Still, it’s a good development for Opperman’s company, just as it is for the U.S. highways like I-81 that parallel the Crescent Corridor rail line and therefore will have less congestion.
“The more trucks they can get off the road, the better. Well, that’s better for us,” he said. “If they stick ’em on the rail, it’s good for Eagle Systems and everybody else.”
Perhaps nobody embodies the debate more than Debby Turnmire of Piperton.
As a customer service representative for Eagle Systems, Turnmire understands how a new intermodal facility could be a boon for business. But, she quickly noted, the yard is close to the stable where she keeps her Tennessee Walker, Jim. Turnmire even rides her horse on Adair’s land.
“The neighbors and people who have barns and horses out there, obviously they’re not going to be particularly happy about (the rail yard) because it’s almost in their backyard,” she said. “For me, it’s good for business, so it’s like I’m straddling the fence.”
While most people have settled on one side of the fence or the other, many others don’t know or believe that a side needs to be chosen.
“If I was living there – and I do have my horse there – thinking about land being taken away from riding, that saddens me quite a bit,” she said. “But then as far as my future and my career, I definitely want to see things grow and prosper. It makes it difficult.”