The Port of Longview will move forward with a nearly $4 million rail line upgrade with a guarantee that one of its tenants will financially support the project.
Philadelphia-based International Raw Materials, which leases Berths 1 and 2, signed an agreement with the port Wednesday outlining terms of the rail project.
In that agreement, the port promised to construct its North Rail Connection project, which will add nearly 5,000 feet of new track at the port and realign about 1,500 feet of existing track. That project will increase rail capacity and move cargo more efficiently, allowing IRM to increase its productivity, according to port documents. The company handles dry bulk commodities, such as soda ash.
In exchange, IRM will pay a per-car rail maintenance fee to offset costs of common area rail maintenance and repair. It also will spend nearly $3 million for a rail fender system project, extend its lease at the port through October 2027 and guarantee additional revenue for the port by increasing the tonnage of its business.
The port expects to make $700,000 annually under the agreement, according to port documents.
IRM and the port have been negotiating the deal for more than a year, said Tip O’Neill, IRM president. Finalizing the agreement is a “reconfirmation of a homecoming” for the company, he said. (IRM signed a lease for Berths 1 and 2 in October 2017. But the company had previously operated at the port from 1981-2001.)
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Work is expected to start this year and be completed in 2021. It will ease congestion in “Switch Alley,” an area at the northwest corner of the port near the intersection of Industrial Way and Oregon Way.
IRM had been asking the port to add track for at least a year. At several meetings in 2019, O’Neill spoke about how the company was “space-constrained for inbound and outbound trains,” which stunted its potential for growth.
The port is currently at 70% to 80% rail capacity with little ability to handle new cargo, according to port documents.
The company was eyeing the port’s plans for an Industrial Rail Corridor expansion, a $70 million to $100 million project the port is still trying to finance.
O’Neill said the North Rail Connection is an “interim supplement to the Industrial Rail Corridor Expansion.” And the smaller project is a “good foundation for the future” rail expansion, O’Neill said.
Also Wednesday, in a 2-1 vote, commissioners appointed Board member Alan Erickson as board president for 2020. Commissioners Doug Averett and Jeff Wilson held the role in 2019 and 2018, respectively.
“I’m the third guy, so I’m suggesting it’s my turn at the helm,” Erickson, elected in November after serving as a year as an appointee, said after moving to appoint himself to the role. (His motion also included assigning Wilson as board vice president and Averett as secretary.)