EDGERTON, Kan. — An often-delayed and controversial freight hub proposed by Burlington Northern Santa Fe railroad got a boost from the state Legislature, which passed a tax incentive provision to speed up construction of the project.
The Kansas City Star reported in its Tuesday editions that a tax incentive included in a bill that raised the state’s sales tax and approved a new transportation plan will be worth up to $35 million over several years for BNSF.
In return for the tax provision, the railroad company has agreed to start construction on the $750 million project in southwestern Johnson County this year, state officials said. The railroad announced last year that it was indefinitely delaying the project because of the recession and shrinking freight volumes.
The tax bill authorizes the state to make a grant to BNSF to develop the property. The sales tax generated by the sale of commercial utilities — gas, electricity, water — will be diverted to a special account and used to pay off the grant by 2045.
The railroad is proposing a 1,000-acre development that would include a nearly 500-acre freight yard plus a warehousing complex on land in Edgerton. It would be designed to facilitate movement of goods between trucks and trains.
In January, a coalition of environmental groups and individuals sued to stop a federal permit that would allow construction of the rail hub. The coalition contended that the U.S. Army Corps of Engineers underestimated various environmental impacts from the proposed hub, which would bring large volumes of truck traffic to the area.
Gov. Mark Parkinson said in a statement that the project is “a critical part of Kansas’ new transportation plan, which will invest billions of dollars in the Kansas economy over the next 10 years while putting tens of thousands of our fellow Kansans back to work.”
And state officials pointed out that the freight yard and warehouses will pay taxes that BNSF could have avoided.
“The reality is we’re getting them to agree to pay those (taxes) when they probably would have been granted an exemption,” said Joe Erskine, a deputy state transportation secretary.
BNSF said it needs a new freight center because of increasing demand and space limitations at its yard in the Argentine district of Kansas City, Kan. It contends the project would bring millions of dollars and thousands of jobs into the Kansas City area.
Eric Kirkendall of Lawrence, who has fought the project for years, criticized the tax provision.
“This was stealth legislation to help the richest man in America, Warren Buffett, his BNSF railroad company, and their developers,” he said.
Kansas Rep. Mike Kiegerl, an Olathe Republican, said the rail project would be good for the Kansas City area, but he did not support giving financial incentives to BNSF.
“I do not believe in corporate welfare,” Kiegerl said. “This is a very profitable corporation. Thirty-five million is a drop in the bucket for them. I know they would like to have it. I would like to have more money. Everybody would.”
Kevin Jones of The Trucker staff can be reached for comment at email@example.com.
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