City sets hearing for Midwest & Bluegrass Rail purchase of 145 acres in Willmar Industrial Park
A purchase agreement has been drafted and signed by Midwest & Bluegrass Rail for the development of a 145-acre intermodal distribution center.
Editor's note: The headline of this story has been corrected since original publication. The rail company has signed the purchase agreement for land in the Willmar Industrial Park, but the action by the Willmar City Council was to set the public hearing.
WILLMAR — Things are moving ahead quickly for developing a 145-acre intermodal distribution center in the Willmar Industrial Park .
The Willmar City Council on Monday approved a public hearing to take place at its June 5 meeting for the sale of land to Midwest & Bluegrass Rail for the development of what has previously been called the Willmar Rail Park by Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.
Connected to the Willmar Wye railroad bypass on the west side of the city, this development will be constructed just west of the new FedEx facility in the Willmar Industrial Park. Brian Miller, chief operating officer for Midwest & Bluegrass Rail, has already signed the agreement to purchase the 145 acres for $1.16 million, or $8,000 per acre.
The rail and spurs constructed within the development would be owned by the company, which also will manage the rail park.
“I like that feature,” Backman said, noting the city already maintains roads, parking lots and other things. “I don’t think you also want to be responsible for rail. These guys, that’s what they do, that’s their forte — developing rail, maintaining it, interacting with customers.”
The rail hub development is an expansion of what had been announced previously as a regional transportation hub for Nexyst, a company that moves crops from field to consumer by using a network of specialized containers. MB Rail is purchasing the land and developing and managing the site for tenants like Nexyst and other businesses that need rail access.
The project being planned will include an 8,000-foot rail loop coming off the Willmar Wye, Backman told the EDC Joint Operations Board at its April 13 meeting. A grain storage facility is planned along the west side of the project area and Nexyst would be on the east side of the loop, according to Backman.
While the purchase agreement includes a provision that would allow MB Rail to extend the inspection and due diligence period for up to 120 days, the company is anxious to begin construction as soon as possible.
“They have repeatedly indicated to me that they would like to close as soon as possible. That they would like to start construction as soon as possible,” Backman said. “We have a condensed timeline … the goal is to try to have construction in late summer, early fall here. I don’t think they are going to exercise this in terms of extending the diligence period.”
If MB Rail does not commence construction of the intermodal distribution center within one year, the city will retain the right to purchase the property back within two years at the same price for which it was sold.
As part of the agreement, the city of Willmar will be required to upgrade Minnesota Highway 40 to accommodate the additional traffic that it will bring to the area. The city was awarded a $900,000 Transportation Economic Development grant from the Minnesota Department of Transportation to fund the highway upgrades.
The city of Willmar is also required to extend sewer and water services to the boundary of the development, but MB Rail will pay half the cost to do so.
Backman reviewed the different types of easements associated with the property for utilities and road rights of way, as well as for Hawk Creek, part of which is located within the development.
“We want to make sure we are protecting the Hawk Creek drainage, so what they can and cannot do, we were specifying how many feet they need to be away from Hawk Creek,” Backman explained.
Currently, there is a large blanket easement for the Magellan Pipeline, which crosses under Kandiyohi County Road 55 and Minnesota Highway 40 and is located toward the southwest corner of the development, according to Backman. Magellan has agreed to pay for a survey and confine the easement.
There will be a limit on the height of the structures in the development due to its proximity to the Willmar Municipal Airport, which is located two miles to the west of the development.
“The maximum we can have at this point is 150 feet. So that should handle most developments (within the rail park),” Backman said. “The large cooperative that is looking at a project in addition to Nexyst, they have some projects that go up 226 feet high, and so they understand they need to be 150 or less, in this case.”
The cooperative Backman referenced has not been named publicly and no other specifics of the potential project were discussed Monday.
There is also a provision that nothing within the development will attract birds, which would create a potential hazard for aircraft. Councilor Carl Shuldes questioned how that would work, since a stormwater retention pond will likely be required as part of the project and will attract Canadian geese.
Backman explained that a stormwater retention plan would be developed and there will likely be a regional retention pond constructed that could accommodate several projects within the Willmar Industrial Park.
“How do you control geese? That’s a good question,” Backman said. “The city owns some land to the north, but I think, my thought, and I’m not an expert on stormwater, but we should probably have a pond that’s closer to Hawk Creek in some fashion, because it’s going to flow to the north.”