After a couple of years seeing nothing but bottom, business is picking up in Gardner. Mary Fox sees it in the climbing receipts at the Mr. Goodcents sub shop she owns on Main Street.
Certainly, some of it has to do with that slick, high-tech soda-pop machine she installed last summer and its 100 fizzy, flavor combinations.
Orange Coke? Get outta here!
But no, it’s much more than that. Midway through 2011, Fox began noticing a lot more trucks in her parking lot. Pickups with the BNSF Railway logo slapped on the door panels. Workers from Burlington Northern Santa Fe are more common than ever in this railroad town now that one of the biggest economic development projects in the history of the county is finally under way.
”Over the summer, everything really exploded,” Fox says. “It’s been many different forces behind it, but I’m sure part of it was the intermodal. It’s bringing a lot of new faces through (town).”
And many more faces are on the way — among them eventually, thousands of semi drivers –— when BSNF’s $250 million, rail-to-truck intermodal yard and an adjoining $500 million warehouse park open for business, most likely in the last quarter of 2013.
It’s been a long time coming. When first announced in 2005, the timeline anticipated a 2008 grand opening, only to have that ribbon cutting put on hold when the economy took a tumble.
But after years of discussion and projected start dates that passed without much of anything starting — except for the giant fuss that saw neighboring Edgerton, not Gardner, win the prize — it’s hard not to notice all the construction.
One hundred yellow bulldozers, scrapers and other assorted pieces of heavy equipment spent much of last year rearranging or hauling off 2.5 million cubic feet of dirt from the 1,000-acre project site.
Now, the work turns to burying sewer pipe, pouring pavement and laying track — nine miles of it just for parking the trains waiting to be loaded and unloaded. All the while, BNSF’s real estate partner, the Allen Group, is beating the drum to attract shippers who might want a piece of the 7 million square feet of warehouse and distribution center space that ultimately will be built astride the yard in what they’re calling Logistics Park Kansas City.
So far, only a Wisconsin-based grain company is in the hopper, but several other deals are about to come aboard, Allen Group development director Patrick Robinson says.
In all, the combined operation is projected to create 7,000 jobs directly and many thousands more indirectly.
Pete Heaven, an attorney for Burlington Northern, touts it as the biggest single economic development project to ever hit Joco, and he might be right.
Which is a bit thrilling and daunting both for Gardner, population 19,000, and especially for Edgerton, with just 1,671 residents.
Gardner is already built up. But Edgerton’s business community now consists of not much more than a bank, bar and grill, convenience store and the hair salon that Heidi Wiseman, an Edgerton city councilwoman, runs on West Eighth Street.
She says “the intermodal,” as most everyone calls it, is a welcome addition to the community for which she couldn’t more pleased. Who knows, Edgerton might even get a grocery store, if enough new residents put down roots because of all this.
“I’m all for growth,” she says. “Other than making a bedroom community grow, I can’t see any downside.”
Some opposed hub
Others certainly saw the intermodal as a big negative at first — and still do. That’s particularly so in Gardner, home to the Johnson County Fair, New Century AirCenter and Bubba Starling, the Kansas City Royals’ top draft pick in 2011.
Gardner was founded where the California and Santa Fe trails diverged and grew up with the railroad that followed the latter path and would go onto become BSNF, a subsidiary of billionaire Warren Buffet’s Berkshire Hathaway Inc.
So, area residents are no strangers to trains, 80 of which pass through each day. But the notion of Gardner becoming a destination rather than a pass-through point, a hub for trains to be unloaded onto thousands of semi trucks, was something else altogether.
Concerns were raised about noise, air quality and truck traffic as residents first voted in 2006 to annex the land that BNSF and the Allen Group had picked out for the facility, only to have those wishes overturned when opponents gained a majority on the City Council.
The anti-intermodal faction de-annexed the land and backed off on promised tax breaks. That led to a counter-backlash that forced two of the three project opponents off the council.
But by then, 2009, BNSF had had enough of the feuding and Edgerton caught hold of the project on the rebound, not that critic Larry Fotovich, a Gardner city councilman, has any regrets.
“In 10 years as a Realtor, I’ve never heard anyone tell me that they wanted to live next to a Motel 6 or a truck stop,” Fotovich says of the likely spinoff businesses he sees the hub attracting. “No one ever told me they wanted to live next to an industrial area.”
Other Gardner city officials, such as the city’s mayor, aren’t nearly as sanguine, seeing it as a lost opportunity. By spurning the project, Gardner gets none of the eventual property tax revenue, nor any control over the development, while still having to cope with whatever negatives might be in store.
And given the scope of the 1,000-acre development, plus that it will be a 24-hour-a-day, seven day-a-week operation, there certainly will be some downside for that corner of the county.
For example, there’s a legal challenge now pending at the U.S. Circuit Court of Appeals in Denver concerning a creek that runs through the railroad’s property. BNSF relocated the creek with permission from the U.S. Army Corps of Engineers, but environmentalists call that a travesty.
“I don’t even go out there and look at it anymore,” says Gardner shop owner Linda Meisinger, who belongs to the group that brought suit. “It’s just so sad.”
Then there’s the parkland to the south and west of the intermodal. While a berm was built to cut down on the commotion affecting the county-owned Mildale Farm retreat and banquet facility, it’ll still be noisier than before as semis roll down Homestead Lane on their way to Interstate 35. Also nearby is the county’s Big Bull Creek Park, almost 2,000 acres of undeveloped land that the county bought with voter-approved bonds.
“We don’t know what the impact will be,” says county parks superintendent Bill Maasen, “but it’s not going to be as wild as it once was.”
How much traffic? The Kansas Department of Transportation projects that the current load on that section of I-35 will more than double by 2040, from 25,000 vehicles per day to 64,000. Many of those drivers will be going to and from the intermodal. When fully developed, it will generate more than 17,000 vehicle trips per day, of which 7,000 will be commercial trucks by the state’s reckoning.
To accommodate all that traffic, KDOT will spend $33 million ($14 million of which is coming from the county) to build the new Homestead interchange and upgrade the roads linked to it. (Though some worry that some truckers will bypass those roads — and the interstate weigh station — and continue up winding Old 56 toward Olathe.)
That is far from being the end of the public investment going into the project. Edgerton is committed to building a new sewer treatment plant for as much as $12 million, which would result in quite a rate boost were the burden put on the 650 current wastewater customers.
And that’s just phase one. Edgerton has agreed to make millions of dollars more in improvements as more warehouse and distribution centers are built.
But luckily, current rate payers will be responsible for only a small portion of those costs. The bulk will come from an infrastructure fund the project’s backers will pay into as part of the rolling 10-year, 75 percent tax break that Edgerton granted the logistics park.
And not just for sewers, city administrator Beth Linn says.
“Also roads, a lot of roads,” she says.
Rather than placing a burden on local taxpayers, both Linn and Mayor Donald Roberts say, the project will ultimately provide tax relief by shifting some of the property tax burden off residential property owners, which now pay most of the freight.
“I believe we have probably the highest mill levy in Johnson County, ” Roberts says. “In time, (the intermodal) is going to be a large economic engine for Edgerton. I’m excited for Edgerton’s future.”
What provides that opportunity is the rising price of gas and diesel fuel over the past two decades. After suffering a decades-long decline in freight traffic, railroads began capitalizing in recent years on their ability to move goods in bulk over long distances more cheaply than over-the-road trucks.
Trucks still have an advantage in convenience. Railroads don’t go everywhere the way trucks can.
But BNSF and its competitors have gotten around that by emphasizing their intermodal operations. Containers or truck trailers are loaded onto rail cars and shipped to a central point, such Chicago and Kansas City, where the shipments can be delivered to their final destination by another mode of transportation, like short-haul trucking companies.
“It’s all about saving money,” Allen Group namesake Richard Allen said on Fox Business News, adding that each container train takes 280 long-haul semis off the highway.
Most, but not all, of the goods being shipped via rail are from overseas, which makes intermodal facilities like the one being built in Edgerton akin to inland ports.
“We describe it as oceanfront property,” Allen quipped.
BNSF and Allen have set up similar operations both near the ocean, in San Diego, and far from one, in Fort Worth, Texas. The railroad also has a huge intermodal facility in Chicago.
Kansas City is the second-busiest rail center in the country, and the largest by tonnage owing to all the trains delivering coal from Wyoming’s Powder River Basin to power plants in the Midwest. Those coal trains run through Johnson County along I-35.
The container trains usually take another route, through Olathe and alongside Mill Creek Streamway Park in Lenexa and Shawnee.
Of BNSF’s 30 intermodal facilities, the cramped intermodal operation in the Argentine rail yards of Kansas City, Kan., is the eighth-busiest in the railway’s network.
At 45 acres, it’s about a tenth the size of the planned intermodal facility in Edgerton. To accommodate the typical 8,000-foot container train arriving from points west, BNSF workers in Argentine have to split each one of those trains into manageable chunks on three tracks ranging in length from 2,400 to 5,200 feet.
Moving all those cars around is cumbersome and expensive.
“The Kansas City, Kan., facility is an anomaly in our system,” explained BNSF spokesman Steven Forsberg. “It’s one of the smallest in terms of acreage, but volume-wise it’s one of the busiest. … Prior to the downturn, we were pushing the limits to that facility.”
The Edgerton intermodal yard is meant to replace the Argentine intermodal. It will have nearly five times the capacity as Argentine. Massive trains laden with consumer and industrial goods from the Far East, each easily a mile and a half long, won’t have to be broken up for unloading.
At any one time, the rail yard will accommodate six such trains, side by side. Behind each group of locomotives will be flatcars stacked two high with sealed, steel boxes that only days before were yanked by huge cranes from the bellies of container ships docked in the California ports of Oakland and Long Beach.
Hundreds of containers sealed in Hong Kong, Osaka and Seoul will be unloaded from each train and unsealed at warehouses and distribution centers in the adjacent logistics park, or sent on.
It’s hard saying what all this will mean to rail traffic through Johnson County neighborhoods to the north, Forsberg says, but there certainly would be fewer eastbound trains heading toward KCK — though that could change when the economy picks up.
Good for region?
Because of our central location, the Kansas City-area is well situated to capitalize on the economic recovery when it’s firmly established, says Chris Gutierrez, president of the business development agency known as KC Smart Port.
“This kind of development is something the region believes in,” Gutierrez says of the BNSF project, as well as three other intermodal operations in town. “You can reach 85 percent of the (U.S.) population from here in two days by truck.”
The two other rail-truck intermodal logistics parks are CenterPoint at Richards Gebaur airport, which is served by the Kansas City Southern Railway, and the other is Northland Park, served by the Norfolk Southern.
KCI Intermodal Business Centre combines trucking and air cargo.
Gutierrez doesn’t see the four logistics parks as competitors so much as complementing each other. Each serves something of a different geographic, he says, so the expansion in Edgerton gives shippers yet another option.
“We are a transportation center,” he says, and the new facility only builds on that.
Most of the inbound traffic to Edgerton will be containers stuffed full of products from overseas. But what about the outbound trains? Railroads don’t make money returning empty containers.
Meanwhile, a much surer thing is the shipment of grain.
“Containerized grain is one of the growth areas not only for U.S. agriculture, but also for intermodal,” says Skip Kalb, BNSF’s director of strategic development.
As such, Kalb was thrilled when the first tenant announced for Logistics Park Kansas City was the grain division of DeLong Co. Inc.
The company plans to truck in soybeans, corn, wheat and feedstuffs to be dumped into empty containers and shipped to the Orient, says grain division head Bo DeLong.
Other grain exports could follow, and that’s good news for area growers of those crops, good news for the railroad and good news for truck drivers and any number of other folks from around Johnson County and beyond who’ll earn a pay check as a result of the intermodal.
Not the kind of big bucks that an engineering firm might pay, or even the kind of take-home that auto workers get, but not minimum wage positions. Forklift drivers, computer techs, mechanics, workers to fill customers’ orders.
“The jobs will not be the kind that pay like Black & Veatch, but they’re good jobs,” says Tom Riederer, president of the Southwest Johnson County Economic Development Corp.
It might take awhile for the rest of the county to take note of what’s going on out south, but that will change once the economy gains steam, says the Allen Group’s Robinson. Only 40,000 square feet of the eventual 7 million in warehouse space is contracted for so far, he says, but momentum is sure to build.
“We obviously need to (develop) a couple of million square feet before people understand what’s going on out there,” he says.
And by then, it will be hard to ignore.