$11.5M rail project to yield $40M grain terminal

The ways in which goods travel through Britton are set to improve drastically, community leaders said.

That’s thanks to a Tuesday announcement by Gov. Dennis Daugaard. During a special meeting of the state Railroad Board in Sioux Falls, the Republican governor said his administration will put millions of dollars into four major upgrades of railroads in South Dakota, including the so-called Britton Line that runs 78 miles from Aberdeen to Geneseo, N.D.

The $11.5 million public-private project includes constructing the south leg of a wye — a triangular rail junction — at Geneseo Junction and replacing 29 miles of light rail with heavy rail to enable the rail line to handle heavy, modern traffic, according to information from the state. That work will lead to a new $40 million grain terminal near Britton.

While details about the grain terminal were not released Tuesday, news of the $51.5 million economic development boost was welcomed by those in Britton.

“It’s a very exciting development for the community,” said Britton Mayor Clyde Fredrickson, who spoke from Florida on Tuesday. “It’s going to be a significant change. This is something that has been talked about before and expectations have gotten pretty high. Hopefully, this announcement signals what we’ve been hoping for.”

Here’s how the funding package breaks down, according to information from the state:

• $5.25 million from the Dakota Missouri Valley and Western Railroad.

• A $5.25 million loan from the Railroad Trust Fund.

• $1 million from the state Future Fund, which is used to invest in the state’s workforce and economy.

“This comes as great news,” Britton Economic Development Corp. President Tom Farber said during a phone interview Tuesday. “With all that we have going on in the community and the commerce coming and going, anything to increase speed will be significant. This will be a welcomed change.”

“This new grain elevator in Britton will allow head-to-head competition between two Class I railroads for the first time,” Daugaard said.

He added that $4 million of additional Future Fund grants are available for other projects. He said he hopes the state aid will be an incentive.

“I hope we can leverage our collective investment to provide even greater economic development opportunities,” Daugaard said.

According to the governor, other projects in the state will include:

• Upgrading 42 miles of a state-owned rail line from Chamberlain to Presho, providing access to a new $40 million grain terminal planned by Wheat Growers at Kennebec.

• Adding sidings at Huron and Aurora so trains can pass each other on the Rapid City, Pierre and Eastern Railroad.

• Repairing and improving the Sioux Valley line between Canton and Elk Point operated by the Dakota and Iowa Railroad.

Daugaard said the projects total $59 million. State government would provide more than $17 million of state loans and grants from the railroad trust fund.

Another $7.5 million comes from an appropriation approved by the Legislature earlier this year, and $5.75 million in grants would be from the state Future Fund that the governor controls.

Todd Yeaton, the railroad board’s chairman and manager at the grain elevator that was built near Kimball after the state-owned line was rebuilt from Mitchell to Chamberlain, described the projects as “amazing opportunities.”

Yeaton said the elevator alone created 16 jobs. Wheat Growers board Chairman Hal Clemensen of Conde said the cooperative has been looking to place a facility in the south-central area for years because of crop production improvements.

“This rail expansion means jobs and growth,” Clemensen said during his turn at the meeting’s news conference. “It’s the kind of teamwork that makes South Dakota a great place to do business.”

Daugaard said producers will be able to choose the best shipping rates offered by the BNSF Railway and the Canadian Pacific. He said 5,000 cars of grain could move per year.

Upgrading the line from Chamberlain to Presho will cost an estimated $29.9 million.

The sources are $12.7 million of federal funding, $7.2 million from the Legislature, $7 million from the railroad trust fund through grants and loans, $1 million of local support from the Rails to the Future consortium, $1 million from operator Dakota Southern Railroad and $1 million from a Future Fund grant.

The sidings at Huron and Aurora would be funded through $3.75 million from the Rapid City, Pierre and Eastern Railroad and $3.75 million from a governor’s Future Fund grant.

The $7.3 million of repairs and improvements between Canton and Elk Point would come from $5.1 million of state loans and grants, $1.8 million of federal aid, $300,000 from operator Dakota and Iowa Railroad and $100,000 from the state Department of Transportation.

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