The Effingham County Industrial Development Authority and OmniTRAX, a private railroad and transportation management company, announced Friday that they have formed a partnership to develop the 2,600-acre Research Forest tract near Rincon.
OmniTRAX will spend from $85 million to $100 million to build a road and utilities, making the property useable soon by industries large and small that want rare, dual-rail access close to the Savannah port, international airport and interstates.
It’s the biggest deal the IDA has brokered since the authority was created in the 1960s, according to IDA CEO John Henry, creating a megasite and bringing the potential for thousands of jobs.
The deal means the IDA will recoup the $30 million it has invested in the land and will not have to spend any tax dollars for infrastructure to make the tract useable.
After the IDA gets its $30 million back and OmniTRAX recoups the money it invests in infrastructure and land, the profits from land sales will be split 50-50.
The land is worth an estimated $300 million once the infrastructure is built, Henry said. If the infrastructure costs $100 million and the IDA’s land investment is $30 million, that means the IDA and OmniTRAX could end up splitting $170 million in land sale profit.
Henry said optimistically the land could be sold within 10 years.
“We should be able to take care of Effingham’s needs for years to come,” Henry said.
OmniTRAX will retain all the profit it makes from fees to ship goods by rail.
OmniTRAX will connect the CSX and Norfolk Southern train lines at the site and will build a flyover from Ga. 21 to the property, which is just to the west of the Lowe’s in unincorporated Effingham County, adjacent to the City of Rincon.
Having access to both railroads will give industries the ability to play one against the other for the best shipping rates.
The only other dual rail sites in the Eastern United States are in Baltimore and Callahan, Fla., said Mike Martin, vice president of industrial development for OmniTRAX, who is based in Atlanta.
Martin said the Florida site is smaller than the Effingham site and has more wetlands. The Baltimore site has more expensive property and taxes and some lingering, expensive environmental concerns from the former Bethlehem Steel plant, Martin said.
Martin also said the quality of operations at the Savannah port and the attention to growth demonstrated by the harbor deepening also are big assets for the Effingham site.
The Effingham site could house one user that needs up to 800 contiguous acres.
In addition to selling land in the tract to industrial users, OmniTRAX will build an intermodal facility to transport goods brought to the park by tractor trailers.
Tunnel to China
It was serendipity that Henry and Martin connected regarding the property about a year ago.
Martin accepted a LinkedIn request from Henry, something he said he normally wouldn’t do. Within 30 minutes of Martin accepting the request, Henry looked up information on Martin and called him, saying he needed to come see the Research Forest tract.
Martin said he didn’t realize such a large tract with dual rail was available so close to the Savannah port.
“My jaw dropped” as soon as Henry pulled out the maps showing the property and Martin said he knew brokering the deal was his new top priority.
“You’ve got access to two major interstates, two class-one railroads, the fourth-largest port in the United States, an international airport,” Martin said. “The only thing missing is a tunnel to China.”
Martin said OmniTRAX is considering names for the park and the top contender is the Savannah Gateway Industrial Hub.
He said work on a flyover that would go over the railroad tracks and connect the property to Ga. 21 has already begun.
“You won’t see dirt being turned right away, but work has already begun,” he said.
The deal was signed earlier this week. OmniTRAX already has done a “whisper” campaign, promoting the park to several businesses. Martin said he couldn’t identify the type of businesses that are interested.
But he said the park would be attractive to such businesses as an auto manufacturing plant, auto parts maker, plastic pellet producer, or lumber or agricultural product makers.
Industrial parks that are served by railroads tend to have higher paying, more stable jobs as compared with traditional warehouse and distribution jobs, Martin said.
The IDA will not have a say over specific businesses that move to the park, but the county commission will have some control through zoning.
Chap Bennett, chairman of the IDA board, was the sole board member who voted against the deal. He declined Friday to give a reason for his vote, saying he supports the park’s success going forward.
Effingham County Commission Chairman Wendall Kessler said the county’s zoning rules will keep bad operators from locating in the park. “The IDA can’t just go and put nasty stuff in like some people think they could without getting variances to zoning,” Kessler said. “I see a good situation. I see good job opportunities. I see good potential. This county is going to have growth. We need places for people to work.”
Henry said OmniTRAX is a private company that has other similar projects across the country and has the money to develop the site.
Its parent company is the Broe Group, based in Denver, which says it has a “multi-billion-dollar asset base.”
The park will be an “incredible asset” for the Savannah region, said Trip Tollison, Savannah Economic Development Authority president and CEO. “A project of this size will not only benefit Effingham County, but the surrounding counties in Georgia and South Carolina.”
One of North America’s largest private railroad and transportation management companies, OmniTRAX’s core capabilities range from providing management services to railroad and port services and to intermodal and industrial switching operations. More information is available at www.omnitrax.com.
About The Broe Group
The Broe Group, based in Denver, Colorado, is a diversified privately-owned enterprise with a multi-billion dollar asset base. The Broe Group and its affiliates own and/or manage commercial real estate and other businesses across North America. For more information, see www.broe.com.