WILLMAR -- Burlington Northern Santa Fe Railway has pulled out of the application process for federal stimulus money to help build a railroad bypass on the west edge of Willmar.
In a letter sent Tuesday to city officials, the railroad said that after a further review of the application guidelines, it saw "no possibility" that BNSF would be able to obtain a planning grant for the proposed multimillion-dollar project.
Local officials said Wednesday they're disappointed with the turn of events.
"The greatest disappointment is the loss of what we thought were the benefits," said Steve Renquist, executive director of the Kandiyohi County and City of Willmar Economic Development Partnership.
The proposed project would have shifted the Morris-to-Marshall subdivision traffic out of Willmar's central railyard and routed it to a bypass on the west edge of town.
The move would have opened up rail access to Willmar's industrial park. It also could have enhanced the possibility of cargo service at the Willmar Municipal Airport, as well as position the city for a light-rail commuter train service.
City officials had in fact been discussing the options with BNSF on and off for "a number of years," said Bruce Peterson, community development director for the city of Willmar.
"The main thing was to get that western bypass," he said.
With the shelving of the application process for a stimulus planning grant, "the local impact is significant," Peterson said. "It makes it extremely difficult to get access to the expanded industrial park."
Construction of a rail bypass would have required a massive financial investment -- an estimated $33 million to $58 million, including not only the cost of construction but land acquisition, permits and environmental reviews as well.
The scope of the project is such that neither local government nor BNSF could have financed a rail bypass on its own, Peterson said.
The availability of stimulus funding for transportation projects created a unique and perhaps one-time chance to apply for outside funding, Renquist said.
"The window of opportunity opens and closes. Nobody knows how long it's going to stay open," he said.
The timeline for decision-making also was short. Preliminary grant applications are due at the end of July. Final applications are due in August, and grant awards are supposed to be announced in October.
But after reviewing the guidelines again, BNSF officials told the city this week that in order to be in the running for a planning grant through the National Infrastructure Investments Competitive Grant Fund, the railroad would have had to obtain a significant level of non-federal funding for the project. BNSF is "simply not in a position to make that commitment," railroad officials said in their notification to the city.
Local support for the project was strong. As recently as last week, the operating board of the Economic Development Commission voted to commit $50,000. The Willmar City Council also was prepared to consider making a financial commitment.
Renquist said he hopes it sends a signal to BNSF that local officials want to continue the discussion.
"The stimulus program isn't over yet," he said. "We don't quietly go into the good night. Under the right circumstances, this could be a project they'd still like to do."
"We'll maintain contact with BNSF and keep trying to do whatever is possible and affordable," Peterson said.