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City Council approves purchase of 83,000-square-foot railroad warehouse

Tuesday, February 2, 2010 | 6:00 p.m. CST; updated 10:43 a.m. CST, Thursday, February 4, 2010
The rail line runs directly into the Intermodal Facility, where goods for local businesses can be unloaded. The building is an environmentally controlled storage facility that spans 83,000 square feet.

COLUMBIA — Columbia's own little train now has it's own little depot. Except — it's not so little.

The Columbia City Council voted unanimously Monday to buy the building — an 83,000-square-foot warehouse at 6501 Brown Station Road that serves the COLT Railroad and several local industries — for more than $2.5 million.

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The warehouse, essentially a depot where freight is loaded and unloaded from trains, is substantial. It has the floor space of 1 1/2 football fields, a 30-ton overhead crane to lift freight from trains that pull directly into the building and 15 loading docks to allow trucks to pull right up to the building to receive freight.

Until recently, the warehouse was run by ADS Logistics, a national company that manages similar facilities across the country. But the company's strong ties to the auto industry contributed to financial troubles in 2009.

In April, the city was notified that ADS had defaulted on its contract. By September, the city had taken over operations and hired two former ADS employees to staff the warehouse. The city also began paying the rent.

The warehouse was built and owned by Transmodal Facility LLC — a company created by Prost Builders of Jefferson City. The city's contract with the company left it on the hook for the lease with an option to buy the building outright in the event of operator default.

Vaughn Prost owns and manages Transmodal LLC. Prost said Tuesday that when the contract was written in 2003, nobody expected the operator to go bankrupt.

"ADS's bankruptcy is due to Chrysler and GM's bankruptcy," he said. "That bankruptcy ricochets right down to Columbia."

When ADS pulled out, the city and Transmodal both made efforts to find another operator. The city distributed a request for proposals, and Transmodal even hired a broker to help with the search. A new operator has not been found.

City Manager Bill Watkins said Tuesday that although the building's purchase was an unplanned cost, he thinks it's good business.

"The thing was making money before the economy went south," he said. "I believe the transload facility will be a money maker in the future, particularly since we've lowered some of the operating costs by purchasing it."

The city of Columbia has owned the COLT railroad since 1987, when Norfolk Southern ceased operations on the line. The city has operated the railroad ever since.

The railroad delivers coal to Columbia's Municipal Power Plant, as well as to several local businesses who receive freight off the line. Materials that make their way to Columbia on the COLT include lumber, chemicals, petroleum, metals and electrical machinery.

Connie Kacprowicz, spokeswoman for the Columbia Water and Light Department, said nine companies contract with the city to use the warehouse.

Many clients, such as Honeywell and Mid-City Lumber, are located on the line and receive freight directly to their doors. Clients not located along the tracks can have freight shipped to the warehouse, where it can then be loaded onto trucks.

Watkins said the warehouse will help the city increase traffic on the COLT by providing another set of services.

"Those services are bringing heavy materials in by train," he said, "which is in many cases the cheapest long-haul way to transport stuff."

Now that the city has approved the building's purchase, it can either continue to operate the facility on its own or try to find an operator. Watkins said Tuesday that he'd like to see another operator take over.

As for the two former ADS employees handling all of the work now: "I think that anybody that came in would want to seriously consider keeping those people on board," Watkins said.


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Comments

Richard Green February 2, 2010 | 6:54 p.m.

Another good proposal from our City Manager. This purchase will not only increase the use of the railway but will be a money making facility for the city, especially in the future when we get rid of our present national and state administration and our economy can increase. Good Job, Mr. Watkins.

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