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Investors Work to Revive P&LE Rail Yard in Struthers
STRUTHERS, Ohio -- At the height of the Mahoning Valley’s industrial prowess, the Gateway Yard of the Pittsburgh & Lake Erie Railroad here helped to move massive amounts of steel that the mills in the region produced, steel used in the girders of the skyscrapers in the cities of America.
The site, a low-lying area astride the Mahoning River, was once the nexus of steel transportation in the region, and the rail yard teemed with activity until the late 1970s. By 1993, commercial rail traffic had all but died, and the old P&LE site became pocked with empty buildings and choked with overgrown weeds, its rails rusted in place.
Today, a group of investors wants to restore the pre-eminence of the yard, spurred by what they call demand from small business and the emerging energy industry.
“It seemed like the time was right to develop this,” says Bob Holmes, president of Green Harvest Energy LLC and Green Harvest Rail LLC. “When the property became available, it just made too much sense not to take advantage of it.”
Green Harvest Energy was formed several years ago to construct a biofuel plant at Republic Services’ Carbon Limestone Landfill in Poland Township. While that project could yet move forward, part of the plan was to upgrade rail service to the area. The Gateway Terminal project, Holmes says, “is an offshoot of it.”
Holmes reports the partnership invested “a lot” of money to raze two buildings at the site – he declines to say how much – as well as to refurbish some of the tracks leading into the yard. “We’re pretty much there,” he says. “We have some more rail work to do here and then deal with the weeds.”
The objective is to market the rail yard to companies that value rail shipping as more efficient and less expensive than over-the-road transportation. The site has access to two major carriers, CSX and Norfolk Southern Corp., at the Hazelton switching yard.
Plastics, lumber, steel, limestone – diverse industries use rail to transport their materials, Holmes says. “People don’t realize how much of a plastics business there is in this region.”
And yes, Holmes reports, the yard is perfect for oil and gas companies developing eastern Ohio’s Utica shale play. “It’s part of our business model, but my no means is it the only thing,” he says.
Because drillers require large volumes of sand when they engage in hydraulic fracturing, the yard could serve as a transloading area for that material, Holmes adds. Or, as midstream infrastructure begins to develop in this section of the Utica shale, pipeline companies could use the site as a lay-down yard or a pre-fabrication area.
“It could be frac sand, pipe, limestone, plate steel – all kinds of stuff,” Holmes says. “As the oil and gas industry moves this way, they’re going to need options here.”
Thus far, Green Harvest has landed six customers including Holmes’ own company in Columbiana, ME Supply. A large industrial pavilion, used for storage, anchors the property. On a hot muggy day in early July, the pavilion held stacks of lumber waiting to be picked up and delivered to ME Supply customers.
“We’ve got two more carloads of lumber coming in shortly,” he says. “We hope to do that for a lot of products.”
The key to making the project work is to diversify the customer base, says partner and manager Greg Burbick. “We have about a half-dozen companies using this now,” he notes. “We started operations Jan. 1.”
When the partners purchased the site, Burbick says, the entire 40 acres was overgrown and required extensive asbestos remediation on two of the buildings before they could be torn down. “This was like a jungle when we bought it,” he laughs.
Two buildings on the property – a watchtower and office complex – could be salvaged, Holmes says. And the group is in discussions, he adds, to purchase another 50 acres contiguous to the Gateway site CSX owns.
Holmes says it’s unlikely that the site would be transformed into an industrial park with tenant companies housed there. “We don’t think an industrial park makes sense,” he explains, “since Castlo is right across the river.”
Mike Hoza, executive director of the Castlo Community Improvement Corp., which owns the Castlo Industrial Park in Struthers, says any new development is sure to spark additional interest in this part of Mahoning County.
“From what I understand, rail seems to be a big attraction,” Hoza confirms, adding that Castlo has spent funds to upgrade the rail bridge over Yellow Creek and plans to invest more in other rail-related projects. “We have 66 to 67 acres available for development that has rail access,” he says.
The Gateway Terminal project complements business development in the Struthers-Lowellville corridor, Hoza says. “I think they’ll draw some attention to this area,” he comments.
Holmes points out that the Gateway Terminal site’s proximity to western Pennsylvania and access to major highway arteries such as Interstate 80 and Interstate 680 make it a prime location for products moving in and out of the region.
“There’s a tremendous amount of history in this Valley,” says Holmes as he looks across an expanse of land. “At one time, 35 tracks crossed this valley for all the steel mills. We’re looking to bring life back to this facility.” He pauses ever so briefly. “There’s too much history and too much to offer not to.”
EDITOR'S NOTE: This story appears in our MidJuly 2013 print edition.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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