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TIGER V Grant Narrative - City of Kalispell

TIGER V Grant Narrative - City of Kalispell

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Kalispell/FCEDA Rail ParkUS DOT TIGER VDiscretionary Grant Proposal2013US Environmental Protection AgencyBrownfieldsArea-Wide Planning PilotUS Department of Commerce EDACommunity Trade AdjustmentAssistance Program


Table of ContentsApplication at a Glance ...................................................................................... 1I. Project Description ...................................................................................... 2II. Project Parties ........................................................................................... 9III. Grant Funds and Sources/Uses of Project Funds ................................................... 11IV. Selection Criteria .................................................................................... 12A. Long-term Outcomes ................................................................................ 121. State of Good Repair ............................................................................. 122. Economic Competitiveness ...................................................................... 123. Livability ......................................................................................... 134. Safety ............................................................................................. 165. Project Readiness ................................................................................. 17B. Innovation ........................................................................................... 21C. Partnership .......................................................................................... 22D. Results of Benefit-Cost Analysis ................................................................... 24V. Planning Approvals .................................................................................... 26VI. Federal Wage Rate Certification .................................................................... 28VII. Appendix ............................................................................................ 28Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 1Application at a GlanceProposed Title:Geospatial Information:Kalispell/FCEDA Rail ParkLL83 NAD83 datumN 48.2085W 114.3011City Demographics: Population (2010) 19,927Median Household Income: $39,205Personal Per Capita Income: $22,301Unemployment Rate (2009-2011 ACS Kalispell): 11.5%Unemployment Rate Flathead County 2012: 9.0%Persons below poverty level in Kalispell: 17.2%Congressional District: Montana 01Economically Distressed:Priority and Preference:Special ConsiderationsProject Classification:Flathead County is a federally designated EconomicallyDistressed Area per the Federal Highway Administration criteriapublished August 24, 2009. Within the project’s catchment areaare eight (8) economically distressed counties (Lincoln, Sanders,Mineral, Ravalli, Granite Deer Lodge, Powell, and Glacier) andtwo (2) economically distressed Indian Reservations (Blackfeetand Flathead).In 2010 Kalispell was awarded an EPA Brownfields Area-WidePlanning Pilot grant for the Core Revitalization Area which isreferred to in the TIGER V NOFA.Kalispell/FCEDA Rail Park has also received funding from USDepartment of Commerce Economic DevelopmentAdministration for the acquisition of the project property in2012.RuralTotal Project Cost: $14,514,542Funding Request: $8,708,725Matching Support:Benefit:Cost Ratio:$5,805,817 (cash and materials)12:1 at 3% discount and 8:1 at 7% discountSupporting Documentation: http://www.kalispell.com/community_economic_development/2013TIGERGrantApplication.phpKalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 5growth. Despite the fact that the park has not yet been marketed, four out-of-state businesses andthree Montana businesses have contacted FCEDA for tenant information to be located near railin Northwest Montana. These companies are all manufacturers of wood or metal products oragricultural related businesses.The Market Analysis and Feasibility Study indicates likelyusers of the new Rail Park being the regions’ traditionalwood products and agricultural industries. It points topotential users as those businesses shipping machinery. Italso forecasts trends highlighting growth in shipment ofelectronics and pharmaceuticals into and out of Montanaover the next 30 years based on data from the FreightAnalysis Framework (FAF). Shipments of live animals,precision instruments (firearms), mixed freight andarticles-base metal may provide additional growth fortransload operations in the Rail Park. Non-metallicminerals (sand, gravel, cement, stone and clay) andmetallic ores comprise the majority of exports fromMontana to Canada. Market Analysis suggests FCEDAshould focus on attracting industries where the potentialrail tenants could mine or create these non-metallic ores asone way to enhance trade and rail use to Canada.SchedulePhase II of this project will be ready to begin construction in June 2014. The NEPA process,initiated in May 2013, is significantly underway and is expected to be completed in February2014. A Traffic Impact Analysis has been completed and FCEDA has consulted with engineersto engage the Montana Department of Transportation to plan improvements to Montclair Driveand the intersection at Highway 2 East. Final design approvals are anticipated in March 2014.Additionally, Flathead Drive, the private road within the park that will be widened and extendedis jointly owned between FCEDA and BNSF Railway. FCEDA and BNSF Railway are workingtogether for this road access improvement. Preliminary engineering plans are nearly completeand final engineering will begin within 30 days of grant funds being awarded, currentlyscheduled for August 2013. Project construction will be put out for bid in April 2014 with acontractor selected May 2014. Construction will begin June 2014 and will be completed June2015. FCEDA, project partners and the engineering consultant have established risk mitigationprotocols which ensure TIGER V funding can be obligated by June 30, 2014.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 6Transportation Challenge I—Inadequate Transportation SystemsInadequate transportation systems limit Montana’s rural small businesses, agricultural producers,manufacturers and consumers from efficiently shipping and receiving goods. NorthwestMontana is over 120 miles north ofInterstate Highway 90, 160 miles eastof Interstate Highway 15 and airfreight is not a viable option for thevast majority of the industry in the areaif the product is of substantialsize/weight. Kalispell is a city of20,000 people in a county that isgeographically larger than the state ofConnecticut and yet only twobusinesses currently have rail servicein the city.Isolation and distance from marketscombined with high costs oftransportation preclude many areabusinesses from expanding and deter new business location here, which limits job growth in thearea. Kalispell’s three-year unemployment rate is 11.5% (2009-2011). This is borne out throughBusiness Expansion And Retention (BEAR) interviews carried out over the past three yearswhere business owners in an array of industries have defined transportation as their number oneconcern. Of the 280 businesses interviewed, 51 stated that “lack of adequate transportation,”“cost of transportation,” or “expense of getting product to customer” are the largestdisadvantages of doing business in Northwest Montana.Transportation Challenge II—Inadequate Facilities and Transportation Infrastructure forRail AccessThe City of Kalispell was built by and for the railroad with the first train running on New Year’sDay 1892. Since that time, the city has grown around and beyond the tracks hindering efficientresidential and commercial growth due to leapfrogging development. The original track locationis now strangling the city just as city development and lot size limits access to rail. Lots servedby the rail in this area are too small to attract new industrial rail users. Furthermore, industrialand manufacturing land uses are now inappropriate in this core area of town, directly conflictingwith the community’s identified vision for a more mixed-use, pedestrian friendly core.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 7Transportation Challenge III—Highway Traffic CongestionThe railroad tracks in Kalispell allow only six level crossings in the two-mile stretch of the cityfrom east to west. Bottleneck traffic congestion impacts 20,000 Kalispell residents and another20,000 county residents. The perpetual influx of 2 million tourists who travel to and throughKalispell on an annual basis as they visit Glacier National Park are also forced to idle in traffic.The current railroad track location additionallyhampers regional pedestrian and bicycleconnectivity. While extensive trail systemsreach south, west and north of the city, noneconnect downtown. This leaves bicyclists andpedestrians to negotiate streets with nosidewalks, no bike lanes and, in the case ofMain Street (also Highway 93), forces them toattempt crossing seven vehicle lanes. Finally,the six level crossings could be upgraded to bemore pedestrian and bicycle friendly. TheEPA Brownfields Area-Wide Planning Pilotprocess elicited an over-reaching theme from the community: they want a more walkablecommunity where they can go to the grocery store or park from their homes without driving.The current rail location prohibits a walkable, bikeable community.Kalispell clearly recognizes that any discussion ofrail line abandonment and/or removal of the rail lineitself can only be accomplished through BNSFRailway’s internal processes as appropriate to localconditions. BNSF Railway indicates that while notnecessarily opposed to line abandonment, thatoutcome and any benefits derived from it, arecontingent on BNSF Railway and STB review andapproval of formal abandonment documents.Further, BNSF Railway is willing to immediatelybegin their internal reviews for the line abandonment.“It (the rail park) would affectall of Kalispell. It would leadto the revitalization of theentire community. It’s a greatproject and a great opportunitythat has never been availablebefore.” ~Mayor TammiFisher, City of KalispellKalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 8Solution to Transportation Challenges I, II and IIIConstruction of the Kalispell/FCEDA RailPark will connect rural Montana to domesticand international ports, allowing Montana’srural small businesses, agriculturalproducers, manufacturers and consumers toefficiently ship and receive goods and createmore job opportunities. Access tobroadened regional, national and globalmarkets will stimulate businessdevelopment and expansion and allowbusinesses with a 100-square milecatchment area to access the transloadfacility. Mission Mountain Railway/Watcohas expressed interest in leasing and managing this facility while BNSF Railway has offered toprovide a list of preferred professional transload facility managers. These letters may be foundat: http://www.kalispell.com/community_economic_development/2013TIGERGrantApplication.php.Sufficient cargo and rail volumes to justify the project have been identified by existing rail usersand new business books are being pursued by BNSF Railway and FCEDA to further expandtrain volumes.The Industrial Rail Park Market Analysis completed in May 2013 identifies economic and railtrends that support the Kalispell/FCEDA Rail Park development noting both the forecast ofincreased rail freight shipments in/from/through Montana and Kalispell’s strong supply ofappropriately trained workforce.Relocation of Kalispell rail service to the new Rail Park and out of downtown relieves trafficcongestion caused by large truck traffic. It also creates new appropriately sized and located sitesfor industrial and manufacturing users.Relocation of Kalispell’s access to the railroad is critical to allowing both rail served businessesto grow and the community to grow. Kalispell is very clear that building the new Rail Parkserves a number of priorities as outlined in the Brownfields Area-Wide Planning Pilot Project,Core Area Plan: support local business retention, expansion and attraction; increase city taxbase; improve safety by eliminating six level rail crossings in town; reduce traffic congestion andvehicle idle times; respond to citizen input for a more walkable community; improve commutetimes; encourage revitalization investment in the Core Area of Kalispell.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 9I. Project PartiesThe City of Kalispell and Flathead County Economic Development Authority (FCEDA) haveworked diligently to secure public and private sector stakeholder support for the Rail Park.Each entity listed below has provided a letter of financial commitment, intent, or support for theKalispell/FCEDA Rail Park project. Original copies of all letters may be found at:http://www.kalispell.com/community_economic_development/2013TIGERGrantApplication.php.Montana CongressionalDelegationUnited States DepartmentsMontana State DepartmentsFacility PartnersPortsManufacturersEconomic DevelopmentOrganizationsUnited States Senator Max BaucusUnited States Senator Jon TesterUnited States Environmental Protection Agency Region 8 Brownfields OfficeUnited States Environmental Protection Agency, Washington, D.C.Governor Steve Bullock, Governor’s Office of Economic DevelopmentMontana Department of CommerceMontana Department of AgricultureMontana Department of Environmental QualityMontana Department of Commerce-Energy Promotion and Development DivisionMontana Department of Natural Resources and ConservationMontana Department of Labor-Workforce Services DivisionMontana Department of TransportationBNSF RailwayWatco Companies/Mission Mountain TrailGlacier Stone Supply, Inc.Cenex Harvest States – KalispellNorthwest DrywallBlackwell EnterprisesFlathead County Economic Development AuthorityPort of Northern MontanaTransMark Ltd., Raymond/Lethbridge, ABAccurate Casework Industries, LLCF.H. Stoltze Land and Lumber CompanyZinc Air Inc.Montana West Economic Development, Flathead County, MTKootenai River Development Council, Libby, MTEureka Rural Development PartnersNorthwest Montana Business and Expansion and Retention PartnershipKalispell Chamber of CommerceEvergreen Chamber of CommerceWhitefish Chamber of CommerceMontana Manufacturers Extension CenterNorthwest Montana Small Business Development CenterLake County Community Development CorporationKalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 12The Kalispell/FCEDA Rail Park will be ready for construction in June 2014. One hundredpercent of TIGER V grant funds will be spent on construction of rail and road in the Rail Park.All engineering and remaining costs of rail, water/sewer and utility infrastructure will be paid forwith FCEDA matching funds. The City of Kalispell will contribute the costs of administeringthe TIGER V grant if awarded. TIGER V funding will complete the project funding package.III.Selection CriteriaA. Long-term Outcomes1. State of Good RepairDeveloping a rail-served industrial park in a playedoutgravel pit zoned for heavy industry on the edge ofKalispell immediately adjacent to property owned byBNSF Railway will improve the condition of existingtransportation systems in northwest Montana. TheRail Park project will enable the region to increase itsrail usage by creating access to rail and reducingdependence on trucks. This project is consistent withthe Federal strategy to develop strong freightcorridors to improve freight mobility. Movingfreight by rail instead of truck will save in roadmaintenance and preservation costs over the next twenty“Transportation is a limitingfactor for industrydevelopment in NorthwestMontana and this rail parkwill address that limitationfor local businesses.”~Mark Lalum, GeneralManager, CHS-Kalispellyears. The mode conversion of transporting heavy agriculture and fuel products by rail furtherreduces highway maintenance costs. The mode conversion will also result in time savings byreducing congestion along Highways 2 and 93 caused by slower truck traffic.2. Economic CompetitivenessConstruction of the Kalispell/FCEDA Rail Park will contribute to the long-term growth inproductivity of the American economy, resolve a transportation impediment to increasing U.S.exports to global markets and reduce transportation costs associated with moving products tomarket.The new Rail Park will generate new cargo movements and not displace current economicactivities. Mission Mountain Railway projects that the Kalispell/FCEDA Rail Park willgenerate an increase of more than $250 million in economic value through increased railshipping capacity and move a projected $158 million in additional freight.Using rail versus truck is estimated to improve the economic competitiveness of the region by$14.2 million creating operational cost savings.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


shows, governments in many developing countrieshave been seeking more coherent developmentstrategies, encompassing economic development,regional development, and local development.However, Japan is the only country which hasattempted to simultaneously achieve the threepossible objectives of the technopole at a nationwidescale (Castells and Hall, 1994). Japan’sTechnopolis programme has attempted todecentralise high-tech R&D across the country andto utilise relocated R&D facilities for indigenousinnovation-led development. Thus, it is alreadyobvious that it contradicts the arguments made inthe above sections: high-tech R&D itself has littleimpact on indigenous innovation; explicit spatialpolicy cannot direct the location of industries.However, it is distinctive in the sense that it is alsoaimed to link the R&D with indigenous innovationunder regional initiatives through locally-basedquasi-public organisation called “technopolisorganisation” (Itou, 1994). In other words, this is anattempt to convert ‘place prosperity’ into ‘peopleprosperity’, through the co-operation betweencentral and regional governments, and through thecombination of various sectoral policies. Therefore,the Technopolis programme is worth examining inorder to test the validity of the hypothesisdeveloped above. Can the central government donothing to assist the technopole building at locallevel? Can technopole strategy be used as anSTIC development strategy? How different sectoralpolicies and different levels of government ought tobe interrelated to be successful in achieving suchmulti-objective programme? These are key issueswhich must be addressed throughout the casestudy.3. THE CASE OF JAPAN’S TECHNOPOLISPROGRAMME3.1 Historical BackgroundThe Technopolis programme is a national plan, ledby Japan’s Ministry of International Trade andIndustry (MITI), to create a series of science citiesin peripheral areas across the country. It has threemain objectives: (1) promotion of industrialdevelopment by raising the technological level oflocal businesses and establishing new hightechnologyindustry, (2) sustained regionaldevelopment through encouraging research anddevelopment (R&D) at local level, and (3) thecreation of attractive living communities in whichpeople can live and work (MITI, 1983; Itou, 1994;Yamasaki, 1992).Behind these objectives lie Japan’s efforts towardsindustrial restructuring and the reduction ofregional disparities in population and economicactivities. Although numerous studies have beencarried out on Technopolis, examining bothspecific Technopolis sites and Technopolis policyas a whole, opinions vary as to which of theseissues more strongly affected the formation of theTechnopolis concept. Below, historical backgroundof Technopolis programme is briefly presentedfrom both aspects: Japan’s industrial development,and regional economic development.First, in order to understand the Technopolisprogramme from the perspective of industrialdevelopment, it is necessary to describe Japan’sindustrial and economic development policy since1970’s. This is well described in Fujita (1988), whosuggests that Japanese government’s pursuit ofhigh-technology industry development is a result ofthe 1973 oil crisis which threw significant doubt onthe future of heavy industry as the country’seconomic base. Industries such as steel andpetrochemicals, which had led Japan’s rapideconomic growth prior to the oil crisis, began tolose their significance in Japan’s industrialstrategy. High-tech industries such as computers,artificial intelligence and biotechnology gained astatus as key industries in Japan’s industrialdevelopment policy. It should also be noted herethat high-tech industries need various type ofinfrastructure such as airport, expressways,information networks etc., but unlike heavyindustries, they do not need large-scale plants andother kinds of investments. High-tech productsalso have a high price per unit. These high valueaddedand foot-loose high-tech industries alsomatched the need to ameliorate regionalimbalances, which formed the second and the thirdobjective of the programme. Fujita (ibid.) alsosuggests that the Technopolis programme wasassociated with MITI’s strategy to circumvent tradefriction with the United states and EEC and thethreat of protectionism by producing high-techproducts for export since these products wereconsidered highly technical and specialised andthus would ensure little competition from othernations.The second issue, as already suggested above,was the high degree of spatial concentration ofprivate sector research and development (R&D),as well as population and economic activities inJapan, especially around Tokyo (Yamazaki, 1991).As summarised by Castells and Hall (1994), by theearly 1980s, Tokyo had one-quarter of Japanesepopulation; Japan’s three major metropolitanareas, Tokyo, Nagoya and Osaka had close tohalf. Furthermore, private R&D capacity was evenmore concentrated: almost 80 per cent ofcorporate laboratories, 70 per cent of all scientistsand 60 per cent of all university professors were inGreater Tokyo and Osaka areas. Greater Tokyoalone had about half of total manufacturing byshipment, and more than 50 per cent of privateR&D facilities, which accounted for 65 per cent ofall computer installation and 61 per cent ofinformation-processing employment in 1984. Thus,there was a strong interest in the spatial dispersal12


Page | 15existing industrial zoning. In advance of purchase, the City conducted Phase I and Phase IIenvironmental site assessments on the property and with due diligence complete and positivefindings, FCEDA closed the sale in February 2012. Through the rail park property acquisition,EDA has invested $856,150 in Kalispell. FCEDA has already invested over $150,000 andcountless hours of staff and volunteer community board members into the development planningof the Rail Park.TIGER V funding of the Kalispell/FCEDA Rail Park would be the trifecta in transforming thiscommunity into an economically viable, more environmentally sustainable and energy efficientplace which could serve as a model for coordination and cooperation to other rural communitiesaround the country.Values communities and neighborhoodsThe City of Kalispell’s recently completed Core Area Plan is very clear: The residents andproperty owners in the Core Area and greater Kalispell community want this town to be morewalkable, greener, and economically vibrant. This input was gathered over the course of twoyears during which 33% of the Core Area’s 450 property owners were interviewed to learn theirperspectives and priorities. These stakeholders’ land holdings in the Core Area represent 60% ofthe land mass. The full force of the community input is being used to guide the City in its policy,partnerships and process for redevelopment of the Core Area and development of theKalispell/FCEDA Rail Park which is the key to realizing the goals of the CORE Area Plan.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 16Environmental SustainabilityThe project will utilize sustainable construction elements to reduce long-term environmentalimpacts. Glacier Stone Supply, adjacent to the new Rail Park, has committed to provide $20,000of ballast material currently on site for use in the construction of the multiple tracks free ofcharge and eliminating the need to long-haul such heavy material.4. SafetyThe use of rail as a transportation mode for new cargo generated by the Kalispell/FCEDA RailPark will improve the safety of transportation corridors on which cargo is moved. Reduction oftruck traffic around the shipping corridor along Flathead Lake could reduce collisions causingharm to humans and the environment. For instance, a 2008 tanker truck spill…“Gasoline from the tanker discharged onto theembankment directly up gradient from FlatheadLake, impacting the seeps, springs, and adjoiningshorelines of the Flathead Lake. Fumes from thespill resulted in the evacuation of five homesalong the lake for nearly a year.” Daily InterLake, May 7, 2013.The use of rail as a transportation mode for cargomoved by the inland port will improve the safetyof the transportation corridor on which the cargo is moved. For example, the current fatality ratein Montana is 2.01 per 100 million vehicle miles due to the rural nature of the state highwaysystem. It can be estimated that during the next 20 years the use of rail for cargo movement toand from this facility will save 4.3 lives for a monetized savings of $2.6 million due to reducedcollisions. Due to lack of data on less severe accidents, only fatalities were calculated. If dataon all levels of accidents were available, this savings would be considerably higher.Additionally, the project will increase safety byreducing truck traffic on residential streets andcreating a buffer between the Rail Park andresidences. One downtown Kalispell businessthat intends to move to the Kalispell/FCEDARail Park currently operates a fertilizer facilityadjacent to a propane distributor and within ablock of Kalispell’s historic Eastsideneighborhood. Moving the facility to the RailPark will increase safety and prevent futurepotential accidents or catastrophes.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 175. Project ReadinessThis project is ready to go. The NEPA environmental process is significantly underway andexpected to be complete by spring 2014. The project is also technically feasible. Reviews arecomplete or underway. Preliminary design was prepared by professional design engineers. Thedesign team foresees no complicating or project ending factors. The project site is flat, locallyowned, with no significant environmental features or complicating features. The southern edgeof the site is buffered by a hillside. The project is also financially feasible, as illustrated by theproject budget.The Kalispell/FCEDA Rail Park project can meet all local, State and federal requirements byJune 30, 2014, so that if funded it would allow USDOT to obligate funding in advance ofSeptember 30, 2014. Project risks have been identified and mitigation strategies incorporated forthe project.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 18This TIGERV project will include the following categories of work: railroad, roadway, water,sewer, electrical, and gas infrastructure. Following is a detailed description of the TIGER VProject tasks:Task 1.0: RailroadAn existing rail mainline owned by BNSF Railway and operated by Mission Mountain Railcurrently passes adjacent to the site of the Kalispell/FCEDA Rail Park. There is also an existingswitch and single rail spur that extends into a portion of the neighboring BNSF Railway propertyimmediately north serving established rail customers Glacier Stone Supply and Klingler WoodProducts. Three additional rail spurs are proposed adjacent to the existing mainline on BNSFRailway right of way and are described as follows:• Spur No. 1 –This task includes design and construction of 2,400 feet of rail spuralong the east side of the existing mainline within BNSF Railway right of way.• Spur No.2 –This task includes design and construction of 2,600 feet of rail spur alongthe east side of spur No. 1 within BNSF Railway right of way. Spur No. 2 togetherwith spur No. 1 will allow for a full 54 car unit train to enter and provides room forthe engine to runaround and exit the site.• Spur No. 3 – This task includes design and construction of 2,300 feet of rail spuralong the west side of the existing mainline within BNSF Railway right of way. Thisrail spur will be used for storage of rail cars and be utilized by rail park tenants.Several rail spurs are proposed within the Rail Park totaling 9,500 feet of rail. These rail spurswill be utilized by CHS operations, Northwest Drywall Operations, and additional usersincluding a transload facility.The total proposed length of rail along the mainline in BNSF Railway right of way is 7,300 feetand the total proposed length of new rail within the rail park is 9,500 feet. The total proposedrail for the project is 16,800 feet.Task 2.0: Roadways and GradingThis task will include permitting, design, bidding and construction for the upgrade of 2,800 feetof roadway within the rail park facility. The planned roadway width is 32 feet with gravel baseand asphalt pavement surfacing. Improvements outside of the facility are also proposedincluding improvement to and installation of a traffic signal light at the intersection of Highway2 and Montclair Drive to facilitate traffic to and from the site.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 22B. InnovationThe Kalispell Industrial Rail Park incorporates innovation into the design and operation of thepark itself. The park will have a transload facility – transferring a shipment from one mode oftransportation (truck) to another mode (rail) – on site whereby industries, manufacturers andbusinesses can unload/load goods and merchandise without having direct access to rail siding.The transload facility will minimize the need for extra shipping costs by maximizing the use ofexisting rail infrastructure, however, the facility also provides flexibility and greater access forbusinesses that would prefer to ship via rail but did not previously have access or the ability to doso. Transload operations will be leased out thereby creating a competitive marketplace fortransload operators in the Kalispell area and providing the option to lease to another operator ifservices decline.In addition to the transload facility, the site offers an innovative track design that allows thetransload facility to operate while providing businesses, which need daily rail access, theopportunity to conduct operations without delays due to moving rail cars throughout the park.Because the site allows for multiple businesses to conduct operations at the same time, the parcellayout also includes an innovative approach. While not all businesses will have direct access torail siding, the parcel layout does provide businesses that would support rail-heavy uses theability to locate within the park, thus creating a unique partnership.Lastly, an innovative partnership has been created between the City of Kalispell, FCEDA, BNSFRailway, Mission Mountain and WATCO rail companies and local businesses. These majorpartners have created a working relationship whereby all interested parties can voice theirthoughts concerns and ideas to create a functional, yet expandable rail park. With the continuedsupport of these partnerships, the rail park has the ability to serve businesses in the mountainwest and Canada, thereby creating an innovative marketing strategy to ship goods not onlythroughout the United States but also Canada.C. PartnershipJurisdictional & Stakeholder CollaborationThe collaborative inter-jurisdictional approach of the local municipality, City of Kalispell, andthe county port authority, Flathead County Economic Development Authority, are criticalcomponents of the success of the project to date and will continue to serve as a distinguishingfeature of the Kalispell/FCEDA Rail Park. Not only are the policies and plans of both entitiesworking together, so are the staff. In such a small community, staff offices are just a block awayfrom each other. Yet staff from each is just as likely to coordinate their efforts from thebleachers at rookie league baseball games as from behind a desk.The many and diverse project stakeholders, including private business, railways, communitymembers and public entity representatives, are all on a first name basis, have been involved fromKalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 23the beginning and continue to strengthen the collaboration through careful attention to frequentand consistent communication. In addition to Core Area newsletters, information is regularlyplayed on Kalispell’s local access television station, and media coverage of the project has beenrobust. This community has its eye on the goal and everyone is working together toward thissame goal.These stakeholder collaborations are manifest in the monthly or quarterly updates provided atorganizational meetings throughout the community including: Kalispell Downtown Association,Kalispell Business Improvement District, Kalispell Chamber of Commerce, field offices ofSenators Max Baucus and Jon Tester, to name a few.All letters of support, media coverage and public outreach are included in the applicationwebsite:http://www.kalispell.com/community_economic_development/2013TIGERGrantApplication.phpDisciplinary IntegrationTIGER V funding will serve as the missing piece of a multifaceted funding package of public,private, state and local contributions. This innovative project could not be readily or efficientlycompleted without federal assistance from a source like TIGER.At the Federal level, the project is supported by the United States Environmental ProtectionAgency, the United States Department of Commerce’s Economic Development Administrationand U.S. Senators Max Baucus and Jon Tester.At the state level this project is supported by the Montana Governor’s Office of EconomicDevelopment, the Montana Department of Commerce, the Montana Department ofEnvironmental Quality, the Montana Department of Labor and Industry and various statelegislators.At the local level, it is supported by Flathead County, Montana West Economic Development,Community Action Partnership of Northwest Montana, Eureka Rural Development Partners, theKalispell, Evergreen and Whitefish Chambers of Commerce, Kootenai River DevelopmentCouncil, Flathead Valley Community College and the City of Whitefish.Internationally it is supported by Galko Homes of Lethbridge and Transmark Ltd. a private railsiding off the Canadian Pacific Railroad mainline located between Raymond and Lethbridge,Alberta, Canada.Private businesses supporting this endeavor include: Cenex Harvest States, Flathead ElectricCooperative, Kalispell Center Mall, F.H. Stoltze Land and Lumber, Blackwell Enterprises,Glacier Stone Supply and Cedar Crest.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 24D. Results of Benefit-Cost AnalysisThe Benefit-Cost Analysis shows that the Kalispell/FCEDA Rail Park will provide cost-effectivebenefits to the region. These monetized benefits are substantial at both the 3% discount rate(12:1) and at a 7% discount rate (8:1). Benefits which will clearly be recognized by the regionalcommunity are the anticipated creation of 189 jobs with more than $3 million economic impactfelt in Kalispell.Direct and Indirect Job CreationQuantity Economic Impact to KalispellDirect and Indirect 189 $3,076,655Benefit Cost Analysis Summary SheetSelection Criteria Description Inputs ValueEconomicCompetitivenessSafetyEnvironmentalSustainabilityTotal CostTotal BenefitsNet Present ValueBenefit Cost Ratio• Increased rail shippingcapacity• Operational cost savings• Insurance cost savings• Accident reductionReduce pollution• Savings for 50% of market inPolson (Lake County), MT toKalispell route for grain and100% of Cut Bank, MT toKalispell, MT route for propanebased on CHS projections.• Mission Mountain Railprojections for increased railtraffic, if rail park is constructed.• Saving of rail transport vs.truck transport• Reduced insurance costs for sixremoved rail crossings• Prevented accidents fromPolson (Lake County), MT toLewiston, ID based off of graintraffic on this route and nationalcrash data statistics whendiverted to Kalispell• Prevented accidents forpropane shipments to Kalispellfrom Cut Bank by railCO2 cost savings• Over $250 million increase ofeconomic value through railshipments• Net fuel costs savings ofapproximately $14.2 million• $950,000 will be saved ininsurance costs• $2.6 million in savings through areduction in accidents by divertingtrucks from Polson to Kalispell andUsing Rail for Propane deliveryfrom Cut Bank, MT to Kalispell4398 metric tons of CO2 will besavedDiscount Rate3%Discount Rate7%$ 182,474,680 $ 123,411,810$ 2,593,873 $ 1,801,687$ 5,967.59 $ 4,145.05$ (15,323,877) $ (15,090,857)$ 185,074,520 $ 125,217,643$ 169,750,643 $ 110,126,78612:1 8:1Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 25The benefits used in this monetized analysis include:State of Good RepairThe choice of moving goods by rail instead of truck will preserve the condition of existingtransportation facilities and improve the efficiency of transportation systems. The project willminimize lifecycle costs andimprove the resiliency of ournational highway system. Ifleft undeveloped, the region’sfuture transportation networkefficiency, mobility andaccessibility and of goods andeconomic growth will beimpeded.The project is appropriatelycapitalized up front and usesasset management approachesthat optimize its long-term coststructure. Additionally, asustainable source of revenueis available for long-termoperation and maintenance ofthe project.Economic CompetitivenessThe choice of shipping freight via rail rather than truck will save an estimated $14.2 million inoperating expenses. By increasing shipping capacity in Kalispell, a projected $250 million inadditional (not including existing) freight will be able to move efficiently through the BNSFRailway’s Great Northern Corridor.Project Environmental BenefitsBy converting 50% of the existing freight truck traffic transporting grain from Polson (LakeCounty), MT to Lewiston, ID and 100% of the freight truck traffic transporting propane fromCut Bank, MT to Kalispell, MT, over 4,398 metric tons of CO2 will be saved over the twentyyear life of the project. This equates to a financial benefit of $5,968 in CO2 savings.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 26Project Safety BenefitsReducing the total truck miles traveled from Polson (Lake County), MT to Lewiston, ID and CutBank, MT to Kalispell, MT anestimated $2.6 million will besaved through crash reduction.The removal of the six existingrail crossings in downtownKalispell will reduce insurancecosts by $50,000 per year, or$950,000 over 20 years (benefitsfrom this are realized in year twoof the project).IV.Planning Approvals, NEPA and Other Environmental Reviews/ApprovalsThe project complies with the City Growth Policy and has industrial zoning in place. FCEDAhas signed a request to annex the property to the City. Processing time for annexation is 30 days.Subdivision review will not be required as the park site already contains 7 parcels and the lotlines can be modified to fit future tenant’s needs. This project does not require legislativeapprovals.NEPA DocumentInitial preliminary EA completed in December 2011 with acquisition of the Kalispell/FCEDARail Site using US Department of Commerce, Economic Development Administration.Federal Railroad Administration (FRA) Categorical Exclusion Worksheet has been filed withTIGER V Application.Updated EA is in final stages of completion. Federal, state and local agency comments havebeen solicited and received. The only outstanding action at this time that could alter a Finding ofNo Significant Impact (FONSI) is the completion of a noise and vibration study to determine ifany adverse impacts related to noise or vibration exist and if so to determine any mitigationmeasures if necessary.EA completion date expected August 1, 2013. Filing of FONSI completion date anticipatedSeptember 15, 2013.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 27“Given that the proposed development is a brownfield that was previouslyused for an extractive industry and will now be used for similar or lessimpactfulland uses, potential deleterious impacts such as noise, dust, heat,glare, odors, etc. are likely to be less than what has been present at the sitein the past.”--BJ Grieve, AICP, CFM, Flathead County Planning DirectorOutstanding permitsLocal Kalispell Storm Water Permit issued at time of actual construction of the rail park.Storm Water Pollution Prevention Plan Permit (state storm water permit) issued by State DEQ atthe time of actual rail park development.Required mitigation measures• Truck traffic will be prohibited on Whitefish Stage Road on the west side of the Rail Parkand instead directed to US Highway 2 on the east side of the park where a proposedtraffic light will regulate access onto US Highway 2.• A traffic light will be installed at the intersection of Montclar and US 2 to address trafficaccess to the Rail Park.• Development will be restricted from the nearby Stillwater River on the very northwestcorner of the site where site abuts the Stillwater River drainage and associated adjacentfloodplain area through both the Kalispell Zoning Ordinance and the KalispellStormwater Discharge Permit processes at the time of actual Rail Park construction.• Because the site is in a PM 10 non-attainment area, new tenants will be required toconstruct their facilities to meet operational emissions in accordance with the DEQ-Kalispell Non-Attainment Permit standards as provided for in the existing operationalpermit. This will be monitored at the time of actual tenant space construction and is notassociated with nor does it regulate the construction or development of the Rail Park.A noise and vibration study will be conducted in the next 60 days by KLJ Engineering toquantify any impacts to the residential neighborhood to the immediate south of the proposed railpark that might be created. The study would then provide mitigation measures that would beincorporated into the design, construction and operation of the Rail Park if needed.Kalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana


Page | 29VI.AppendixBenefit Cost Analysis Excel SpreadsheetsBenefit Cost Analysis NarrativeKalispell/FCEDA Rail Park MapKalispell/FCEDA Rail Park BudgetFCEDA Resolution and Letter of AssuranceCity of Kalispell ResolutionFunding Commitment LettersLetters of IntentLetters of SupportNEPA and Other EnvironmentalInformationRail Park Market Analysis andFeasibility PlanTraffic Impact AnalysisCore Area PlanCore Area Plan Public EngagementCore Area Market Analysis andFeasibility StudyCommunity Economic Development Strategies (CEDS)MediaAdditional Information Available After June 3, 2013TIGER V Kalispell/FCEDA Rail Park Project Application website:http://www.kalispell.com/community_economic_development/2013TIGERGrantApplication.phpKalispell/FCEDA Rail ParkTIGER V GRANT APPLICATIONFor City of Kalispell, Montana

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