Marked Tree finalizes contract to build rail spur - KAIT Jonesboro, AR - Region 8 News, weather, sports

Marked Tree finalizes contract to build rail spur

MARKED TREE, AR (KAIT) – Marked Tree city council and Jonesboro based Baughn Construction have finalized a contract to build a railway spur from the Burlington Northern Santé Fe line to into the Awesome Products plant.

Mayor Wayne Nichols hopes construction can begin within a month or so after the city council authorized the contract and hopes the move will finally bring new jobs into the city.

Construction will cost $1.1 million, and Nichols says a second contract will require Awesome Products to pay a railcar fee, which will help pay back loans.

In July of 2010, Awesome Products announced it would extend operations into the old Mid South Manufacturing building on Old Highway 308 in Marked Tree. At the time of the announcement, the company indicated it would hire 120 employees in the Marked Tree area, citing a strongly skilled workforce and proximity to major transportation resources. As of now, the company is still using the building as a warehouse.

"Everybody would like to see it open because some folks want a job and of course we do too. Hopefully it'll increase our revenue in town and it's good for the whole community because you will have people employed from probably a 30 mile radius here. It not only helps Marked Tree, it helps everybody," said Mayor Wayne Nichols.

Nichols told Region 8 News that only four or five cars can be seen in the parking lot each day. He said he's hopeful that will change in the future.

"We're waiting for approval from economic development and from the fed portion of it in Dallas and then the railroad has basically put their final approval on it," said Nichols. "It's been about $200,000 (the city has) committed and hopefully that will do it, but you know, you don't know until you get that bid in."

Nichols said the city was hopeful the company would be manufacturing bleach out of the Marked Tree facility by now, but obstacles have gotten in the way. He said he's optimistic the city will be able to take bids for construction of a rail way spur in the next few weeks.

First of all, Nichols said the city was asked to purchase or acquire two plots of land south of Old Highway 308 near the Burlington Northern Santa Fe railroad tracks. He said the owner of Awesome Products wanted a rail way spur built before investing millions of dollars to manufacture.

"The raw products will come in by rail. That's why he's wanting the rail here," said Nichols. "He's getting anxious and we're anxious too."

Nichols said the city had to purchase one plot of land for $35,000. The city was fortunate enough to obtain the other piece of land near the plant as well.

"Mark Gillis, he donated some property before so he let us have some additional property. He gave us some additional property, but the problem is you've got $150,000 increase," said Nichols, referring to a switch to be installed near the plant.

Nichols said the switch will provide a way in and out of the plant.

"This is additional cost and then purchasing the land was additional cost, so we've got more in it now than we had hoped," said Nichols.

Another issue is that of insurance. Nichols said representatives with the railroad company have asked the city pay for insurance during construction of the railway spur. He said the insurance will provide coverage up to $2-million. He said the city is shopping around for the insurance, but doesn't know how much the coverage will cost taxpayers.

"We met with the utility folks yesterday and there's some extra expense there. Power lines have got to go up and gas lines have got to be moved, so that's additional cost too," said Nichols.

Nichols said the city has $1-million in grant money; however, that money hasn't been released because the construction project hasn't been approved by the state and federal governments. He said BNSF has approved the construction project.

"We're hoping it'll come in somewhere around the million dollar range, but when they start adding a switch, you're talking about $150,000 for the switch so it gets expensive," said Nichols. "The economic development and then the federal funds, they've got to approve all the plans and it's just taking time."

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