CRANDIC might return grant for Cedar Rapids facility

CEDAR RAPIDS - Officials with the Cedar Rapids and Iowa City Railway Co., or CRANDIC, are re-evaluating what to do with a $500,000 state grant intended for a new logistics park in southwest Cedar Rapids.

CRANDIC had requested $2.1 million through a pilot program called Linking Iowa's Freight Transportation System to help build a $4.2 million transload hub, Eastern Iowa Logistics Park, at a rail yard west of Edgewood Road and north of Highway 30.

'Since it's not what we requested, we have to decide what we want to do,” said Jeff Woods, CRANDIC marketing manager. 'Do we want to redefine the scope of the project, or give the grant back?”

The Iowa Department of Transportation, during a meeting this week of the Iowa Transportation Commission, awarded the grant as part of $2.6 million in allocations to six freight projects.

The logistic park would help fill a void in bulk transloading facilities in Iowa, provide cheaper shipping options and divert tons of goods off highways, according to CRANDIC. The park would include a conveyor belt to move bulk dry goods between rail and truck, as an additional service to the vacuum and pneumatic transloading offered at a hub near Wilson Avenue.

The park would have the ability to send or receive 25 car trains and transfer up to 300 tons an hour, or about 60,000 a year, CRANDIC said.

CRANDIC ships a variety of products, with the largest portions being hazardous commodities, food products, coal and farm products. Major customers include Alliant Energy, Archer Daniels Midland, Penford Products, International Paper and Cargill.

It's unclear whether the Wilson Avenue services would be relocated to the logistics park. If CRANDIC moves forward, the project probably would be done in the third or fourth quarter of the year, Woods said.

Transload facilities transfer freight between rail and another mode of transport, often trucks, but also ship or plane. Rail is a less expensive mode than truck to ship freight long distances, but transferring the product between the different modes can require certain equipment at a transload facility.

Tammy Nicholson, director of the Iowa DOT office of rail, said transloading services were part of 13 of the 25 applications the agency received.

'We certainly see a need for that option,” Nicholson said. 'We are seeing that with the number of applications and hearing more and more about transloads and requests for transload programs.”

CRANDIC will have 45 days to decide to turn down the grant or refine the scope of the project, and 180 days to redraft a project agreement, Nicholson said. Grants seldom are returned, but it happens - especially when the amount is much less than requested.

Freight optimization is a key part of a partnership between the Iowa DOT and the Iowa Economic Development Authority.

The Iowa DOT launched LIFTS using federal money left over from a revolving low- or no-cost loans, which became stagnant as rates for open-market loans improved. The Iowa DOT hoped the LIFTS pilot would serve as evidence for a permanent state funding stream for freight projects.