November 9, 2004 in Business

Will firms make tracks to Spokane?

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Even with the thick morning fog sulking on the West Plains Monday morning, Dan Weaver could see clear to the future.

The purchasing manager and part owner of Metals Fabrication Co. Inc. watched as a Western Rail switching locomotive snapped a red Mylar ribbon just outside Fairchild Air Force Base’s main gate. The Geiger Rail Spur, which connects with the Burlington Northern Santa Fe main line, has crossed base property for decades, but BNSF no longer wanted to operate on the 4.9 miles of track because repeated stops when entering base grounds made the spur a money loser. In September, the railroad transferred the spur — valued at $2.7 million — to Spokane County.

The ribbon-busting celebrated the exchange, which will save Metals Fabrication and nine other businesses that depend on the spur for delivery and shipment of raw materials and finished goods, some weighing many tons.

Four hundred existing jobs might be lost if the line was closed, and the opportunity to attract perhaps thousands more as well.

Metals Fabrication, for example, employs as many as 90 workers making from $12.50 to $20.50 per hour. It would hire more now with the right skills. And Weaver estimates subcontractors and suppliers may employ three people for every one working in his shop.

Transportation costs are important for a company that does 75 percent of its business along the Interstate 5 corridor. Because time of delivery is critical in construction, he must truck finished products to job sites. But raw steel is shipped to Metals Fabrication from Arkansas. Some of the beams the company makes, like those supporting the roof of the new McCarthey Athletic Center at Gonzaga University, are as long as 70 feet, and weigh as much as 700 pounds per foot.

By rail, the cost from Arkansas is about two cents per pound. By truck, Weaver says, that would climb to at least 10 cents. Ouch!

“We are using the rail at a record rate,” Weaver says. “It is financially mandatory.”

Garco Building Systems Vice President John Pargman says that company now receives its raw steel from the San Francisco area. Until two years ago, when its supplier went bankrupt, Garco bought its steel in the Midwest, where prices are lower. When that market stabilizes after a run of bankruptcies and takeovers, Garco will turn to the Midwest again — if the spur remains open.

“We would hate to see the railroad go because it would directly affect the value of our business,” Pargman says.

Garco employs 150 at its plant adjacent to the spur. But preserving the existing jobs does not begin to convey the importance of the Geiger Spur, Weaver says.

Metals Fabrication just purchased more equipment from two Seattle-area competitors who went into bankruptcy. “They had no rail service,” he says, adding that West Side companies are so desperate for access to rail spurs some have hired helicopters to do their own aerial track surveys.

When he tells Seattle and Portland associates what industrial property sells for in Spokane “their knees buckle.

“They can’t fathom that industrial land is available at these prices.”

With the spur in county hands, with Western Rail as operator, officials have turned their attention to phase two of their plan — extending the spur south 3.5 miles to connect with the Palouse River & Coulee City line, which was recently acquired by the Washington Department of Transportation. That done, the line will no longer have to traverse Fairchild, eliminating for good the security issues and costs associated with the old route.

The State of Washington has already set aside $3.5 million for construction. Other federal, state, and local funds will be needed to study the feasibility of a new route which, with the inclusion of right-of-way purchases, will cost an estimated $6.5 million. To assure the expense is justifiable, the Spokane Area Economic Development Council has received $75,000 in federal and Spokane County money to finance a feasibility study. A request for bids will probably go out this week. Assuming that study confirms the potential economic payoff, the next step would be design, for which $100,000 in federal money has already been appropriated.

To Weaver, extension is a no-brainer. New rail would open up hundreds more acres to development that could accommodate new industry 40 years into the future.

At the Spokane International Airport, officials have said the spur, combined with ready access to freight facilities there and to Interstate 90, would complete a transportation trifecta capable of attracting shippers weary of West Side congestion.

A reconfigured Geiger spur has the potential to unlock hundreds of acres to industrial development that does not fit anywhere else in the county for any number of reasons; traffic congestion and environmental concerns like aquifer protection for starters. The West Plains has its own challenges, like storm water drainage and encroachment on the airport and air base, but nevertheless has tremendous potential.

A little railroad could do for the West Plains what the Great Northern and other major railroads did for Spokane in the 19th and 20th centuries. As Weaver says, “We’re working on something here that Seattle and Portland don’t have the opportunity to work on.”

The project has advanced this far thanks to admirable cooperation among local, state and federal officials, including those at Fairchild. It almost makes you wonder: What’s the opposite of a train wreck?

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