February 06, 2013 Edition

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NEARIFA discusses railroad spur, purchasing acreage for future use

Dalton Sullivan
Star Herald

The Northeast Arkansas Regional Intermodal Facilities Authority (NEARIFA) has determined the building of a spur railroad from Walnut Ridge to Pocahontas is not feasible at this time due to economic reasons.

Earlier this month, at the request of State Representative Scott Baltz, representatives of the Arkansas Short Line Railroads (ASL) were in Pocahontas to discuss the possibility and the cost to build a railroad from Walnut Ridge to Pocahontas.

Daniel Robbins, vice president of marketing for ASL, discussed the possibilities.

"Economic development is a lot easier," Robbins said at the early January meeting, "when you have major highways and Class A railroads, such as the Union Pacific (UP) and Burlington Northern (BNSF). It is really hard to get companies to look at you if you don't have those two things."

"First, you have to determine if there is a need," Robbins said, "and whether that need is now or in the future." He said costs are expensive. Robbins estimated the construction costs for building a track from Walnut Ridge to Pocahontas to be about $21.5 million.

Since the meeting, the NEARIFA has been meeting with various businesses in the Pocahontas area to determine if there is indeed a need or a desire for rail service, and if it would be economically feasible for the businesses. After the series of meetings were concluded, it was determined by the NEARIFA Board of Directors there was not enough projected cargo, either inbound or outbound, for the line to make money.

"While the NEARIFA would support, if feasible, a short line railroad to Pocahontas," NEARIFA Board Chairman Scott Trammell said, "it is not feasible at this time due to economics. The $21.5 million would have to be raised through grants or bonds and any debt would have to be paid through a revenue stream."

At the meeting Robbins said it would take 800 to 1,000 cars per year for the short line provider to break even. Trammell said if this requirement were not met, the NEARIFA would have to make up the short fall to the short line carrier and service any debt from the building of the track.

"We need to concentrate," Trammell continued, "on getting a transload facility for both the UP (Union Pacific) and BNSF (Burlington Northern) at our proposed Hoxie site. Once this is completed, a track to Pocahontas might be more feasible due to the ability to connect to either competing railroad using a staging area with a switch."

Trammell went on to say if a transload facility were already in place, many local businesses would be able to use it for different types of bulk products, and NEARIFA might be able to facilitate one or more carloads at a time through the facility.

In other business at last week's regular monthly meeting, Kyle Baltz of Ag Headquarters Peanuts discussed the 2012 peanut crop and how his company fared. AG Headquarters built a buying and drying facility on 50 acres on the NEARIFA Pocahontas site earlier this year. Baltz said yields were good for area farmers, and the country's peanut crop exceeded the national average by approximately 1.2 million tons.

Baltz said there were roughly 18,000 acres of peanuts grown in Arkansas in 2012, but added the number of acres would probably be down somewhat this year, due to surplus inventory and an expected decrease in peanut prices, which he added have been very good. Baltz added his company had a few growing pains this year, but all in all, the first year went very well.

He also addressed the rail situation, saying his company alone did not have enough peanuts by themselves to make the short line feasible. It was also a moot point, because the Clint Williams processing plant in Oklahoma, where the peanuts from Ag Headquarters are shipped, does not have the capability to unload rail cars.

In other business, NEARIFA Chairman Wayne Gearhart reaffirmed his belief that NEARIFA needed to own some acreage at one of the sites, preferably with rail access. Gearhart said he hoped to meet with NEARIFA Engineers Crafton Tull to discuss the possibilities. "I believe," Gearhart said, "not having a site under our ownership has hurt us."

Katherine AufderHeide, a community development specialist for the Arkansas Economic Development Commission (AEDC), and a regular at the NEARIFA meetings praised the NEARIFA for the work it has done thus far and encouraged the Authority to keep open the dialog with other Intermodal Authorities across the state.

"The meeting you had with the other Authorities was huge," AufderHeide said, "and now you can see how you can work together on various problems and initiatives."

Richard Walden of Congressman Crawford's office gave an update on congressional issues including the budget.

The board also discussed meeting sites for 2013, and it was decided to keep the primary meeting place at BRTC in Pocahontas, with one meeting a quarter at one of the other cities (Corning, Hoxie, Walnut Ridge).

The next meeting will be held on Thursday, Feb. 28, in Pocahontas.

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