Developing Erie Rail / Erie Inland Port

Page 1

DEVELOPING

ERIE RAIL INSIDE:

! Why the Erie Rail Terminal

is Important ! Economic Impacts ! Supplying the Demand ! Special Commentary James Kurre, PhD

DevelopErieRail.com SAVE THE DATE: Shipper’s Conference ! May 22, 2014 ! Erie

ON TRACK FOR REGIONAL GROWTH & JOBS


WHY THE ERIE RAIL TERMINAL IS IMPORTANT The Erie region, like every other place, must constantly remake itself. We must make our way in a world economy constantly changing. Our economy must change and develop, or we will get left behind. Our Region’s economy has been lagging behind. It’s time to catch up. 4I &II" B# 7&" *6'D G#F 8#$68 5?D@&IDDID B# 5I (#FI $#(!IB@B@;I 6&" :II! !I#!8I *#F:@&E+ We want the full range of job opportunities for our children and anyone who would choose to live in Erie. All this is easy to say. It is very hard to do. In the last 50 years, Erie has struggled to remake itself. We continue to struggle for many reasons. One of those reasons has to do with the way we, as a community, look at the changes in the world economy. We need to start looking at those changes as a framework for opportunity rather than a reason to despair.

$#!6( (5./0*!4% 3+/ -,/(4%,#-2 &( 5+-, !)(4,!'" 4(& 04) *#04%!4% !4)+-,/!(- ,#0, /(066" 1, ,#( Erie region, and then work to grow them here. The key is to become better at who we are. Here are some of the ways Erie can grow: 1. Supply services 3I+E+ CI68BC $6FI. I"?$6B@#&. FI$FI6B@#&. B#?F@D(. FIB6@8 DB#FID. (I"@6. 7&6&$I 6&" !F#GIDD@#&68 DIF;@$ID1 to people living in smaller towns between Erie and our larger neighbor cities. 2. Grow, harvest and process our local resources 3I+E+ C6F"*##"D. EF6!ID. $#F& 6&" !#B6B#ID1 B# DI88 @& "@DB6&B (6F:IBD+ 3. Process or burn natural gas from our region 3I+E+ (6:I GIFB@8@%IF. (6&?G6$B?FI !86DB@$ #F EI&IF6BI I8I$BF@$@B'1 G#F 8#$68 ?DI 6&" I)!#FB+ 4. Localize the supply chains for existing manufacturers 3I+E+ (6:I BCI (IB68D ?DI" 5' #?F G#?&"F@ID 6&" (@88D1+ 5. Keep and grow precision and high tech manufacturing 3I+E+ 2#F" /#F!#F6B@#& 6&" AF@I% 06E&IB@$D1 G#F C@EC ;68?I E8#568 I)!#FBD+ 9CIFI *@88 $IFB6@&8' 5I D#(I #!!#FB?&@B@ID 5I'#&" BC@D DC#FB 8@DB. 5?B @G *I <?DB "# BCIDI 7;I BC@&ED *I88. Erie will grow again. We will continue our heritage of making things. We will modernize and grow the Erie region’s economy while maintaining our quality of life. '44 .%$ 1001,)(2!)!$+ "-%$ 12$ )"!2# !2 &13312/ ),-2+01,)-)!12* People use the highways 5?B *#?8" 5I&I7B GF#( 5IBBIF 6@F DIF;@$I 6&" C@EC,D!II" F6@8 DIF;@$I+ >FI@ECB ?DID BCI C@EC*6'D B##. 5?B (6&' 5?D@&IDDID *#?8" FI688' 5I&I7B GF#( 36&" D#(I 65D#8?BI8' FIH?@FI1 5IBBIF !#FB 6&" F6@8 DIF;@$I+ Erie’s economy grew up around its lake port and railroads. But lake shipping and rail freight has changed. A lot. Now we must rebuild on those old foundations. This is why in 2009 the Economic Development Corporation began the hard detail work: research, strategizing, marketing and partnering to use our ports and railroads to grow our region. 9CI AF@I =6@8 9IF(@&68 @D BCI 7FDB #G DI;IF68 BF6&D!#FB6B@#& BCI(I" "I;I8#!(I&BD BCI A-/ *@88 F#88 #?B @& coming months. It will change the way we do business in Erie.

John Elliott is the President and CEO of the Economic Development Corporation of Erie County (EDC) 7B4 .-; ;.& 718.E.7-3;L '/3 PQ!2; C.;;.@B .; -@ 43*3E@> @,< <30.@B2; 35@B@C# 7B4 43*3E@> @,< <30.@B2; ><@;>3<.-#L '/3# ;3<*3 7; -/3 E374 35@B@C.5 43*3E@>C3B- 703B5# 1@< -/3 !@,B-#L '/3 PQ!2; ;3<*.53; .B5E,43M 43*3E@>.B0 E7B4 7B4 6,.E4.B0; 1@< 6,;.B3;; 3&>7B;.@B 7B4 <3E@57-.@BN .B1<7;-<,5-,<3 43*3E@>C3B-N 6<@(B8.3E4 <35#5E.B0N 8.B7B5.B0 7;;.;-7B53 *.7 E@(K.B-3<3;- 6@B4 7B4 E@7B ><@0<7C;N 7B4 -35/B.57E 7;;.;-7B53 -@ ;C7EE 6,;.B3;;3;L %B43< =<L PEE.@--2; E3743<;/.>O -/3 PQ! /7; E7,B5/34 7 5@C><3/3B;.*3 7B4 C,E-.1753-34 311@<- -@ 0<@( -/3 <30.@B2; E@0.;-.5; 7B4 ;/.>>.B0 .B4,;-<# GB@(B 7; -/3 P<.3 FBE7B4 :@<- .B.-.7-.*3L "# .C><@*.B0 7553;; -@ -/3 <30.@B2; <7.E 7B4 (7-3< -<7B;>@<-7-.@BO .- .; >@;;.6E3 -@ <34,53 -<7B;>@<-7-.@B -.C3 7B4 5@;-O C7G.B0 P<.3 7 C@<3 31135-.*3 5@C>3-.-@< .B -/3 (@<E4 C7<G3-L :<@I35-; ,B43< -/.; .B.-.7-.*3 .B5E,43 3B/7B53C3B- @1 -(@ ?7G3 P<.3 :@<-;O 43*3E@>C3B- @1 7B .B-3<C@47E <7.E -3<C.B7E 7B4 43*3E@>C3B- @1 <7.E 7B4 >@<- ;3<*34 .B4,;-<.7E ;.-3;L :<.@< -@ -/3 PQ!O =<L PEE.@-- ;3<*34 7; -/3 P&35,-.*3 Q.<35-@< 7- -/3 +343*3E@>C3B$,-/@<.-# @1 -/3 !.-# @1 P<.3 (/@O ,B43< /.; E3743<;/.>O 37<B34 -/3 J@*3<B@<2; $(7<4 1@< 3&53EE3B53 .B ADD9L =<L PEE.@-(@<G34 .B -/3 ><.*7-3 ;35-@< 7; 7 5@B;,E-.B0 3B0.B33< 7B4 ><@I35- C7B703<L H3 .; E.53B;34 7; 7 ><@13;;.@B7E 3B0.B33< .B -/3 ;-7-3 @1 :3BB;#E*7B.7L H3 37<B34 7 =7;-3< @1 )5.3B53 .B !.*.E PB0.B33<.B0 (.-/ 7 5@B53B-<7-.@B .B '<7B;>@<-7-.@B :E7BB.B0 7- =.5/.07B )-7-3 %B.*3<;.-# 7B4 7 "75/3E@< @1 )5.3B53 .B PB0.B33<.B0 7B4 J3@E@0#1<@C!7E*.B !@EE303L

After four years of effort, we are proud to announce: the Erie Rail Terminal development has started. Investors are committed. Design and permits are underway. Construction will begin in a year. Trains roll in 2016. Erie will have new daily rail freight service to dozens of cities and America’s busiest ports.

Erie can grow again. We’re doing this. All aboard. Page 2

DevelopErieRail.com

Save the Date: Shipper’s Conference May 22, 2014


What is Intermodal Freight?

The Erie Rail Terminal will handle intermodal freight. Intermodal freight is cargo that moves using different 53'&, 3% *./4,23.*/*"340*.)(!,1 *./"4,1 ,#"2, /4' -/.$&,034 *#& same trip without ever leaving its *.)(! *./"6&. 3. (34*/"4&.+ By John ElliotT

`

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EDC welcomes partner and equity investor:

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PAVING THE WAY Pavement is just part of modern life. So much so, we hardly notice it: sidewalks, driveways, roads, runways. The new Erie Rail Terminal will have nearly 30 acres of it. On the surface it all looks the same—but not all pavements are created equal. Pavement needs to measure up to its task. Here are some comparisons:

EDC welcomes debt capital advisor: Sidewalk 4” concrete

www.nhcapitalpartners.com

City Street 6” asphalt 6” stone

I-90 13” concrete 8” stone

Erie Runway Extension 10 1/2” asphalt 10” stone

Erie Rail Terminal Crane-way 16” steel reinforced concrete 6” stone

www.strategicrail.com DevelopErieRail.com

Page 3


The Growth of Modern Freight

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What comes to mind when someone says freight train?

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.#97 !=#!2= 786%3 10#57 =%"2=99 0#($1;9 * 71%3 $1;9 !522=" 0=86%" 9=4=;12 85:= 2#$#'#764=9+ For much of the twentieth century, that’s what railroading was. Today, the modern freight train 2##39 '#;= 263= 1 :6:1%76$ 97;6%: #< /=:#,263= 0#(=9 971$3=" 7)#,86:8 1%" %=1;2& 7)# '62=9 2#%:carrying imported retail goods or manufactured products for export. by Steve Rubin- )+!0&!.,2- 10(#+)+/ '$%!*/+"

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According to Intermodal Association of North America (IANA), the industry’s leading trade association, “…intermodal is growing faster than any other mode of transportation.” OJ 4:8.X 0.= 3@H).2 @:.6 2:= 966J LH@6 .2:J C-:7@-EN6 .2:. H4 .26 &V*V 68HJHL$ := : )2HN6 H+6@ .26 E:=. .6J $6:@=V OJ.6@LH7:N 2:= 966J 3@H)0J3 =.@HJ3 968:-=6 0. E@H+076= @6N0:9N6 .@:J=0. :. N6== 8H=. .2:J NHJ3 2:-N .@-8P0J3V % 4-NN 0J.6@LH7:N .@:0J

LATE 2010 Survey of Erie Shippers

Q1 2010 First meetings with CSX Page 4

DECEMBER 2012 EDC purchases project site

SPRING 2011 Completed 1st version of market analysis

DevelopErieRail.com

2012 Update of market analysis

Q3 2013 EDC accepts 1st commitment of private equity

Q2 2013 Q1 2013 CSX/EDC collaborate CSX/EDC agree on conceptual design on market analysis & proposed service

future

Milestones

ERIE RAIL TERMINAL

Q2 2014 Anticipate environmental & permitting clearances complete

Q4 2013 EDC hires EMH&T as project engineering firm, iniates design & permitting process

Q4 2014 Construction begins

Q3 2014 Bidding & close financing

Q1 2016 Operations begin


Overview of Erie Rail Terminal

VICINITY MAP Located in Harborcreek Township, east of Nagle Road

TERMINAL VIEW '&*,!+(- $ )!#& %!&"

Erie: A Port Inland or an Inland Port? By John ElliotT

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Why Would Anyone be Crazy Enough to Invest in an Inland Port? /618 %# 8<$:<6 6# -%&#%< (7# 2%#(8 '< 67-6 /1' - ;-% #; 67< ;:<< '-:2<6 8&86<') /6 8<<'8 6# '< 67-6 ;:<< -%" 3#04%6-:& 6:-"< between informed buyers and sellers generally gives us a pretty 9##" :<8406) /; ,485%<88<8 (-%6 6# '-2< - !:#.6+ 67<& 7-3< 6# $#%35%$< $486#'<:8 6# !-:6 (567 8#'< #; 67<5: 7-:"*<-:%<" dollars. In the process, the businesses have a strong incentive to .94:< #46 (7-6 $486#'<:8 (-%6 -%" 7#( 6# !:#35"< 56 <;.$5<%60&) /; 67<& "#+ 67<& $-% '-2< - 3<:& %5$< 0535%9) by James Kurre, PhD &"1'+.513 #+5657"+ ,'0'21+$ 860.".-.' 5% #1"'4 *92+! )+$559 5% *-0"6'004 /'66 ).2.' *'$1'6(

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DevelopErieRail.com

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On a project like the Erie Inland Port, public agencies like the Economic Development Corporation and county and state government will factor in the )#+'. ('"'$*- *! *%' ,.',& A project like the Erie Inland Port will mean more jobs and income in the region, and that will result in extra spending locally. That spending will ripple through the economy. Q0 *2PP HDJ,2:9 NJD9 2L;JN9 7JD J049D PJ;>P *JDR9DA 2L 049 D90>2P >L: A9D,2;9 A9;0JDAY *4J *2PP :J 0492D J*L AH9L:2L5W 'PP 04>0 </A2L9AA >L: 2L;JN9 *2PP HDJ,2:9 2L;D9>A9: 0>( :JPP>DA 7JD PJ;>P 5J,9DLN9L0A 0J HDJ,2:9 A9D,2;9AW )49 SJ<A >L: 2L;JN9 *2PP >PAJ 49PH H9JHP9 <9;JN9 A9P7VA/7?2;29L0 >L: D9:/;9 0492D :9H9L:9L;9 JL 5J,9DLN9L0 A>790&VL90 HDJ5D>NAW )4JA9 042L5A 49PH >PP J7

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Shipper’s Conference May 22, 2014 Erie, PA Bayfront Convention Center

Supplying the Demand By John ElliotT

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Economic Impacts %' !21& ,$/, ,$' #."' +/"4 ('.3"2/4 &"44 $/)' 01-",")' '*1213"* effects on our region. But just how good? That is question answered by an economic impact analysis that mapped the potential effects of the Rail Terminal on our region. By John ElliotT

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ERIE RAIL TERMINAL Economic Impacts

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62+@B/?3=2+ <24@7 The Erie Rail Terminal and related road projects will cost over $60 million and take 15 months to build. The project will temporarily employ over EG' >2/)0/@. A0/-(+0+B :C/03B <24@7 The Erie Rail Terminal will put about G* 1021&0 on its own payroll, including clerks, equipment .8%564.5(7 #%!06"+!(7 (%!'5+4& .-!%5(7 6") #6"6$%#%"43

A0/-(+0+B ;+5C/03B (+5 ;+5?305 <24@. The Terminal will buy services and supplies from local businesses, and all these new employees require housing, schools, and services. This all creates 6 8.(+,2% 06*. .1 "%/ %!.".#+! 6!,2+,%( 4.46*+"$ *E -2/0 .24@. #032+5(/F ;-1(3B@7 For every million square feet of manufacturing and warehousing space supported by the Erie Rail Terminal, the 8/C0 032+2-F >C&& D/2> 4F (11/2!C-(B0&F ,$%' -C&&C2+ and .24@ >C&& D/2> 4F %9""E.

3M !R8,8R<M9 <M9 ?311@;/A54Y "4& spending many millions of dollars The Erie region has more than 1 The region is, by far, a region *J/R9 S *<M1 1J $<RT<M3#8 <M9 every year to drive their inter, 0$ /-0&(')!02 -%*(4)!2# !2 2%), 8MJ/54 98P<M9 1J9<& 6JA 3M18A:<MM3;<R3#8 P& J*M ;/@3M8@@Y2 national shipments to the ports outbound trucking movements. PJ9<R A<3R @8A,3:8Y !+a *<M1@ 1J "8 939 MJ1 D/31Y (See the chart showing Erie’s trucking of New York and Baltimore, and @/HHR& @8A,3:8 6JA 14<1 98P<M9Y )-.&% +.4.2'%1 haul intermodal freight to rail CJ* HA3,<18 3M,8@1JA@ <M9 H<A1M8A@ )48 ^`! <M9 J/A HAJV8:1 H<A1M8A@ terminals in Cleveland, Buffalo <A8 :JP3M5 1J58148A 1J ;/3R9 148 @H8M1 148 M8(1 14A88 &8<A@ <M<R&#3M5 2 The region has a positive and Pittsburgh. ^A38 .<3R )8AP3M<RY 143@ HAJV8:1\ <@ ;J14 < ;/@3M8@@ %"/0-) )-.&% +.4.2'% 0$ 30-% JHHJA1/M31& <M9 <@ <M JHHJA1/M31& than four to one in international "48M 31 3@ ;/3R1\ *8 *3RR ;8 <RR 4 The region’s trucking patterns 6JA ;/@3M8@@Y "8 A8,38*89 HJA1 shipping containers. overlap almost perfectly with 148 PJA8 A8<9& 6JA M8* P<M/6<:A8:JA9@\ RJ53@13:@ @1/938@\ P<HH89 CSX’s intermodal network. 1/A3M5 <M9 *<A84J/@8@ 1J :JP8Y 3 The region’s businesses are >YE P3RR3JM <MM/<R 1A/:T PJ,8ments coming to and from the ^A38 A853JM <M9 @/A,8&89 M8<AR& IQQ :JPH<M38@Y "8 H8A6JAP89 FULL TRUCK LOADS PER YEAR :J@1X;8M8=31 <M<R&@3@ 6JA A<3R PJ,8P8M1@ ,8A@/@ RJM5X4</R 1A/:T3M5 6JA BALANCED NET-OUTBOUND NET-INBOUND 9J#8M@ J6 :3138@ H<3A89 *314 ^A38Y Petro/Chemical -20,000 S1 1/AM@ J/1 14<1 ;83M5 @P<RR :JM@/P8A@ 939 MJ1 P<118A @J P/:4Y Ag & Food Products -25,000 )48 ^A38 A853JM M889@ < A<3R 18AP3M<R 1J @/HHJA1 HAJ9/:13JMZ 3M Construction Products -140,000 P<M/6<:1/A3M5\ P81<R\ 6JA8@1A& <M9 <5A3:/R1/A8Y Economic Devel+23,000 Other opment Corporation’s research, validated by the railroad’s anal+88,000 Metal Parts & Castings ysis and independent experts, +225,000 Finished Consumer Goods proved several important facts +J/A:8Z SU+ WRJ;<R SM@3541\ KQQCJA14 'P8A3:<M 1A/:T3M5 9<1<[ about Erie:

ERIE REGION’S TRUCKING TRADE BALANCE

^:JMJP3: `8,8RJHP8M1 !JAHJA<13JM J6 ^A38 !J/M1&\ KQNN

DevelopErieRail.com

Page 7


Q&A

What hours will this operate?

What will the terminal do?

You have probably seen truck trailers and containers on rail cars. This will be a place where cranes will lift containers on or off the train.

3I 6%B@$@!6BI BG6@% EIG<@$I 6B 9I6EB 7<I "6&E !IG )II;, 0%" )C@9I BCI BIG'@%69 F6BI '6& %#B GI'6@% #!I% 52 C#?GE. )I I(!I$B #!IG6B@#%E @% the terminal to continue at all hours.

What is a container?

Is it noisy?

0 $#%B6@%IG @E BCI 4#( BC6B "IB6$CIE HG#' BCI BG6@9IG )CII9E. allowing them to stack up like blocks and lock together like Legos.

Where will the trains go?

The trains from the Erie Rail Terminal will go to the port in New York City and to a hub near Toledo where they can switch trains to dozens of cities coast to coast across North America.

How much will this cost?

The project is currently estimated at just over $60 million.

Who is paying for this?

The Erie Rail Terminal will be paid for with a combination of private investments and loans. The loans will be either private bonds or borrowed HG#' BCI >I"IG69 =6@9 0"'@%@EBG6B@#%,

Will it pay taxes?

JIE, :C@E "I<I9#!'I%B )@99 !6& !G#!IGB& B6(IE 9@;I 6%& %I) "I<I9#!'I%B would pay.

&#55 $0#) 533.) ,0+*!#4' "3/.-

D?BB@%F $#%B6@%IGE #G BG6@9IGE #% G6@9 GI"?$IE 9#%F-"@EB6%$I BG?$;@%F but replaces it with two short trucking moves (one at each end of the BG6@% BG@!1, AG@I )#?9" C6<I 9IEE 9#%F-C6?9 BG?$;@%F 6%" '#GI EC#GB-C6?9 trucking. Also, growing new distribution and manufacturing businesses around the rail terminal would increase total trucking employment.

:CI BIG'@%69 @E %I(B B# BCGII G6@9G#6"E )@BC %I6G9& 8** BG6@%E !IG "6&. so train noise will not increase. The cranes are relatively quiet at just 100 feet, making less noise than a lawnmower. Trucks in the terminal )@99 C6<I 7<I '@%?BI @"9I 9@'@BE. )C@$C GI"?$IE 4#BC %#@EI 6%" !#99?B@#%,

Is it secure?

The site will be completely fenced and monintored continually by camera and security. All products coming from international locations will have passed through customs and security at the port of entry to the United States.

What about hazardous materials?

/#%B6@%IG BG6H7$ @E GIF?96BI" '#GI EBG@%FI%B9& BC6% BG?$;@%F. E# BCI BIG'@%69 hazards are less than highway hazards. Most of the hazardous materials are the same products you can buy at retail stores, like bleach or lawn fertilizer.

When does it get started?

Construction is planned for fall of 2014, with the terminal opening for business by early 2016.

I M P RO V E YO U R B OT TO M L I N E

&#55 ,%#. #4*0)1.) ,0+*! ,01(2*-

JIE, :CIGI )@99 $IGB6@%9& 4I @%$GI6EI" BG?$; BG6H7$ 6G#?%" BCI BIG'@%69, 0B !I6; C#?GE. )I I(!I$B 6 BG?$; )@99 !6EE BCG#?FC BCI F6BI I<IG& 90 seconds or so. Overall, however, these terminals take a lot of trucks off the highways, reducing congestion and helping our roads last longer.

&#55 ,%#. #4*0)1.) ,01#4 ,01(2*-

Current plans are to stop, load and unload trains already passing through Erie. In the future, new trains may be added to this route E!I$@7$699& H#G AG@I HGI@FCB,

How will this impact the environment?

The development requires a complete federal environmental clearance 6!!G#<69. )C@$C @%$9?"IE GI<@I) #H+ 6@G. )6BIG. %#@EI. BG6H7$. )IB96%"E. endagered species, historic properties, archaeology and other community impacts. Also, this project is recycling a site formerly developed for G6@9G#6" 6%" )6GIC#?E@%F !?G!#EIE. G6BCIG BC6% "I<I9#!@%F 6 H6G' 7I9" or wood lot.

CONTACT: Economic Development Corporation of Erie County at info@edcec.org DevelopErieRail.com

VALUE

THE OF I N T E R M O DA L R A I L Contact CSX to learn more about the value that intermodal rail transportation can bring to your supply chain at GO_INTERMODAL@CSX.COM or visit intermodal.com.


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