Rail spur to serve Colfax businesses would cost $3 million

By LeAnn R. Ralph

COLFAX — A rail spur on the west side of Colfax to serve Woods Run, Anderson Bridges, Timber Technologies and to create a spur for a “future company” would cost $3 million.

The estimates and four different options for the rail spur were developed by a company called TMW Inc., said Lynn Niggemann, village administrator-clerk-treasurer, at a meeting of the Colfax Plan Commission June 5.

By the end of the meeting, plan commission members had decided village officials should meet with a representative of Canadian National Railroad about the spur and should also investigate scaling back the proposals from TMW.

According to information provided to the plan commission, TMW is out of St. Louis, Missouri, and specializes in civil, structural and railway engineering

The plan commission, along with several village board members, held a meeting in December with representatives of businesses in Colfax to talk about the rail spur.

At the December meeting, the Colfax Plan Commission approved recommending the village board solicit Requests for Proposals to develop a rail spur.

The discussion about a rail spur started because a company called Star Blends had been interested in locating in Colfax. Since there was no rail spur available, Star Blends ended up with a $6.6 million building in the Wissota Industrial Park.

Representatives for the company visited Colfax five times, trying to find a site, but the existing rail spur is already at maximum capacity, said Scott Gunnufson, former village president and former chair of the plan commission.

Gunnufson decided not to run for re-election in April and was invited to the plan commission meeting to provide background information on the rail spur and the previous discussions.

Businesses in the industrial park currently have access to the railroad at Legion Drive, which is not necessarily a convenient or an efficient location, although Timber Tech and Woods Run are able to make the location work through coordinated efforts.  

$250 per foot

Installing a rail spur would cost $250 per foot of track.

The cost of Option 1 at 2,361 total feet of track would be $2.8 million.

The cost of Option 2 at 2,553 total feet of track would be $2.88 million.

The cost of Option 3 at 2,646 total feet of track would be $2.89 million.

And the cost of Option 4 at 2,370 total feet of track would be $2.7 million.

For all of the options, generally speaking, the rail spur would extend south from the existing railroad tracks near county Highway BB.

Mike Buchner, plan commission member, wondered if Canadian National was aware of the village’s interest in developing a rail spur.

“Yes,” Niggemann said, adding that TMW had contacted the railroad with questions.

“We are trying to see if it is feasible to pursue $2.7 million to $2.9 million,” said Gary Stene, village president and chair of the plan commission.

“We were hoping (Don) Henderson would be here because it is his land,” Stene said.

If the village owned the land where the rail spur would be located, the village could do more because the land would then be in the Tax Increment Financing District, he said.

The rail spur would only be feasible if it increased the valuation of the land enough to cover the payments on a loan to build the spur, Stene said.

“This looks like a long shot,” he said.

On the other hand, a rail spur “would be a good selling point for the village,” Stene said.

Some Wisconsin Department of Transportation grant money might be available, Niggemann said.

Under one particular program, the grant provides money at $10,000 to $15,000 per new employee hired because of the rail spur, Gunnufson said.

The businesses have indicated they might be in a position to hire ten new employees with a rail spur, so that would amount to $150,000, he noted.

Businesses

The proposed rail spur would have a benefit to Woods Run, said Bruce Ayres, owner of Woods Run Forest Products.

But, Ayres said, the project is bigger than anticipated, and he was not sure he could promise the taxpayers of Colfax that the money would be well spent and would generate enough additional revenue.

“It’s not that simple to have a single spur. It’s more rail than I envisioned. It’s more expense than I envisioned,” Ayres said.

Timber Technologies is four blocks away from the existing spur, and the company works hard to get the lumber to the spur, said Dale Schiferl, co-owner of Timber Technologies.

Once rail spurs are taken out of small towns, it is hard to get them back into the small towns, he said.

The current situation with the rail spur creates “uncertainty” for Timber Tech, and the options for the rail spur would help give Timber Tech longevity in Colfax, Schiferl said.

Mark Ackerman, owner of Ackerman Dairy Products, wondered if Canadian National believed there was an incentive for building a new rail spur.

“You can’t move freight down the line if you can’t get on the line,” he said.

The consensus in the room was that railroads do not really care if small businesses are able to use the rail line, except if the business is a sand mine.

Stene suggested it might be worthwhile to talk to a representative for Canadian National.

“It’s not a big deal for the railroad, but it’s a huge deal for Colfax,” he said.

Constructing a rail spur on the west side of the village would maximize business expansion not for the next 20 years, but for the next 50 years, Stene said.

One of the next steps will be to find out what size and scale of the rail spur would be good for Colfax businesses, he said.

When meeting with a railroad representative, it will be important to the present the village as looking at long-term options, Stene said.

Another important consideration is to determine how much value does a rail spur add to the land owned by the businesses, Ayres said.

All of the options would result in room for many more rail cars than any of the local businesses would anticipate needing in any given day.

“What would be a good number of cars to make the spur useful?” Niggemann asked.

The business owners agreed perhaps four or five rail cars per day with a maximum of ten per day. 

East View

The area the village has purchased for residential development along Dunn Street would be better used for light commercial, Ackerman said.

Ackerman’s business is located directly across Dunn Street from the northern most portion of the East View Residential Development.

Ackerman also has gone on record in the past saying he believed the area east of Dunn Street along the railroad tracks would be a better location for businesses than for residential development.

Industries are looking for places like Colfax where there is a good workforce and the land is more affordable, Ackerman said.

The village should consider annexing the Henderson property, allow the family to continue farming the level portion of the land and make the wooded hill property available for residential development.

People would want to build $250,000 houses on a wooded hill with a view, but they will not build $250,000 houses on a flat farm field, he said.

Using East View for industrial would be a better use of the land, Ackerman said.

Leverage

The question is, how to leverage the village’s money to the best advantage, Stene said.

If the village waits until a business comes looking and needs a rail spur, it is already too late, he said.

Stene recommended the plan commission consider scaling back the project and also recommended talking to a Canadian National representative to find out what is possible.

Stene and the business owners should talk to a representative for Canadian National, said Dave Hovre, plan commission member.

“We want to help the businesses and not hurt the village residents,” Hovre said.

“If you’re not doing something, you’re going backwards,” Stene said.

In addition to Stene, Hovre and Buchner, David Wolff, Nancy Hainstock and Jason Johnson also serve on the Colfax Plan Commission.

Hainstock and Johnson were absent from the meeting.