Picacho Peak rail-yard project gaining speed

Jump in freight spurs Union Pacific to ask for state-land decision
2012-07-03T00:00:00Z Picacho Peak rail-yard project gaining speedThe Associated Press The Associated Press
July 03, 2012 12:00 am  • 

A project to build a massive rail yard along Interstate 10 near scenic Picacho Peak is gaining momentum.

Union Pacific Corp. has asked the state to act on its 6-year-old application to build a rail yard along I-10 that is 6 miles long and wide enough to accommodate up to 74 tracks, The Arizona Republic reports.

Union Pacific first identified the site as shipments increased from Asia passing through the Port of Los Angeles/Long Beach and then over land.

Opponents say the rail yard would add air and noise pollution, damage the water table and blight the views of and from Picacho Peak State Park.

Pinal County officials say the facility will create needed jobs, help diversify the local economy and be a catalyst for a larger logistics hub of rail, I-10 freight and air shipping from Pinal Air Park just to the south.

For now, the site remains a laser-leveled farm.

The rail-freight giant first applied in 2006 to acquire 1,873 acres of state land. Since then, Union Pacific has scaled down the plan to 950 acres, with the rest being devoted to what it calls "buffer" space.

But progress on the plan stalled. The recession hit and demand for freight waned. Questions about the project forced Union Pacific to provide more details.

Initially, support in the state was not especially strong.

Now, Union Pacific is seeing a sharp rise in business as freight volumes have reached levels originally projected for 2014.

How state land officials view Union Pacific's bid will be influenced by two consultants' reports in final review. The department commissioned them in the spring to analyze the impact of the Red Rock yard on the environment, economy, nearby infrastructure and potential for nearby development.

Union Pacific says the project will cost $250 million to build and generate an immediate 290 jobs as well as 6,000 indirect jobs. It estimated the project would generate $26 billion in economic activity over 20 years.

No other prospective buyer has expressed interest in the property, State Land Commissioner Maria Baier said. But that doesn't mean a sale is necessarily the best option.

"If the market's right, and it's a good project, and it's good for the State Lands Trust, then we'll sell," Baier said.

The Land Department is bound by law to get the best value for land it auctions. It's required to seek buyers offering the highest and best use of state-owned land. The proceeds go into a trust, which provides the lion's share of its profits to public education.

Red Rock is not a traditional sale, Baier said. More commonly, before the real-estate bubble, auctions were generally won by big developers buying land on the edge of metropolitan Phoenix for master-planned communities.

This is where the consultant reports become key. The Land Department owns other property near the Red Rock site. A 6-mile-long rail yard acts like a wall, blocking access to other parcels. Baier's team has to determine if a rail yard will render those properties unsellable.

The yard also requires a huge amount of engineering to make sure freight trucks can get in and out of the yard, over tracks and onto I-10 safely.

More recently, the Arizona Department of Transportation has been adding lanes to I-10 and has plans to ultimately widen the entire Phoenix to Tucson stretch to six lanes. ADOT is also midway through a two-year study looking into the feasibility of passenger-rail service between the two regions, plans that could be disrupted by Red Rock.

Union Pacific says its development plan will address those issues.

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