In 2004 the City of Prineville found itself the owner of an aging and unprofitable railroad. The City of Prineville Railway established in 1917 is the oldest City owned and operated railway in the U.S. The railway once served multiple customers and provided a solid source of revenue and jobs for the community. Read story by Dale Keller.
But by the early 1980s the sawmills had closed and the revenue carloads continued to decrease to a low of 87 in 2004. At that time consideration was given to abandoning and scrapping it out. Fortunately, the City of Prineville recognized that their ability to attract new industry and family wage jobs was dependent on having a “full service” railroad serving Prineville and the surrounding region.
In order to enhance the services offered by the City of Prineville Railway (COPR) it was recognized that a facility geared to the needs of customers who did not have access to rail service and for those that were not receiving adequate service from the Class 1 railroads was needed. The Class 1 railroads prefer carloads from multiple smaller customers to be consolidated on a short line railroad (COPR) or at a distribution hub so they only have to make one stop to set out and pickup. This increases the efficiency of their operations.
By recognizing and understanding the changing business model of the BNSF and UP Railroads the City was able to enlist their support in developing the Prineville Freight Depot. At the same time through working with the surrounding communities and businesses the City was able to gather support for a Multimodal Transload and Warehouse Facility which was named the Prineville Freight Depot.
In 2005, the City traded property for an old sawmill site of 33 acres and two warehouse buildings and an additional nine acres at the site was purchased in 2007. A Transload and Warehouse operation was started in an effort to add carloads to the railroad. By the end of 2006 several customers were using the facility; including two large manufacturers located over 100 miles from Prineville.
Soon the site could not support more business and the City was forced to look for funding to expand the operation. The major funding for the project has come through the Connect Oregon I, II & III programs which have done much to spur on the building of transportation infrastructure in the state.
Railway and City staff successfully wrote grant applications for all three of the Connect Oregon programs which have brought in over $9.4 million dollars which has been used to develop the Freight Depot as well as a 12 acre Bulk Transload site currently being constructed on City owned property at Prineville Jct. where the COPR interchanges with the BNSF and UP Railroads. An additional $1.0 million was obtained through the ARRA Federal Stimulus package and this money was used to renovate the rail line, pullout abandoned track and crossings plus replacing worn out railroad crossings.
The major challenges facing the project came from the effort and time required to evaluate the condition and potential of the railway, develop community and regional support, “rebrand” the railway and acquiring the funds needed; in many ways the project was much like a startup. Websites, advertising and sales programs had to be developed along with upgrading and streamlining the operating side of the railway as well as designing and overseeing the construction of the Freight Depot.
The project has been fortunate to have strong community and regional support as well as highly competent personnel on staff to help keep the project moving forward. Support from the city manager, city council, railway commission and county court have all contributed to the success of the project.
Success is measured in results and our project is showing those results: The first anchor tenant at the Freight Depot is a company that produces de-icer and dust abatement products. They have signed a 20 year lease and when fully built out they are expected to generate 250 carloads annually.
We have a letter of intent from a company that produces a torified industrial pellet that is used to supplement coal in generating plants. They would also locate on Freight Depot property and want a 20 year lease. According to their projections they would generate 350-400 carloads annually. We have an agreement with a large lumber distributor to consolidate all of his distribution yards into our facility for storage, packaging and shipping.
We are also working with a National Trucking Company interested in partnering with the Freight Depot and Railway to transfer their long haul traffic to rail and to change their operation to regional pick-up and delivery model.
The advantages we offer to our customers are numerous: daily switching, warehousing, just in time delivery and facilities that most businesses are unable to access are part of our services. For the first time in many years the City of Prineville Railway is operating in the black; this can be attributed to sound operating practices and business generated through the Prineville Freight Depot.
As the economy recovers and the Class I railroads again become congested, they will look to increase their capacity by increasing the velocity of their railroads to relieve congestion. Our operating model emphasizes their preference to haul unit trains for long distances and discourages making multiple stops along their mainline to switch out smaller customers, especially in rural areas. We have learned that multi-use facilities like the Prineville Freight Depot will be the key to maintaining rail service in rural communities.
