Construction is expected to begin next month on a long-awaited rail-truck transloading facility in Des Moines that will provide shippers with new options for shipping raw materials and other goods in and out of Central Iowa. The planned facility east of downtown will offer access to three major railroads — BNSF Railway Co., Norfolk Southern Railway and Union Pacific Railway — as well as the regional Iowa Interstate Railroad. 

“We’re at the finish line,” said Rita Conner, the city’s economic development director, who said a construction contractor to build the facility is expected to be announced early next week, with construction planned to begin in August. 

The city’s due diligence process for approving the sale of the land was complicated. Before the transaction could be completed, a competitor for the transloading contract — Merchants Distribution Service in Des Moines — raised concerns in 2016 after the selection of the Omaha-based owner, Steven Braithwaite, who will own and operate the facility as Des Moines Transloading LLC. 

The allegations involved the safety and environmental records of several rail-service related companies Braithwaite owns and operates in Omaha, and were detailed in a private investigator’s report that Merchants Distribution gave to city officials. 

In an interview with the Business Record this week, officials with the city and the Des Moines Area Metropolitan Planning Organization said they are satisfied that Braithwaite adequately addressed concerns raised by a Des Moines firm that had competed with Braithwaite for the transload facility contract. 

“I think as a public entity we’re very interested in being transparent, and we’re interested in learning about the individuals and entities we’ll be dealing with,” Conner said. 

Braithwaite was the winning bidder in 2016 to operate the proposed rail-truck transload facility on a 12-acre tract of industrial land adjacent to the Southeast Connector east of downtown. He did not respond to a phone message seeking comment. 

According to an OSHA spokesperson, Braithwaite is currently contesting two OSHA inspection cases that his companies in Omaha were cited for. He is awaiting hearings before the independent Occupational Safety and Health Review Commission, the official said.

The proposed transload facility, to be built on the site of a former auto salvage yard just north of Martin Luther King Jr. Parkway between East 14th and 15th streets, was supposed to begin operation in the fall of 2015, following an extensive feasibility study conducted by the Des Moines Area Metropolitan Planning Organization. 

After the city failed to receive a $9 million federal transportation grant in 2016, it shifted the ownership model for the transloading facility from a planned public-private partnership to a direct ownership model in which the facility will be owned and operated by Des Moines Transloading. 

The project still has a $1.7 million Rail Revolving Loan Fund grant available from the Iowa Department of Transportation, said Todd Ashby, executive director of the Des Moines Area Metropolitan Planning Organization. “I think that goes to [IDOT’s] confidence in this undertaking as well that they’ve been willing to hold onto that,” he said. 

“The sale of the land was structured through a contract mechanism, and there will be some startup costs to get the facility operating,” Ashby added. “But financially, I think we’re in as good a position as we’ve ever been.”  

The MPO applied this week for an $11 million federal transportation grant for the $15.6 million project. If that isn’t approved, Des Moines Transloading “will continue to make investments in the property and just build it over a period of time as opposed to all at once,” Ashby said. “But we’ll be able to get operations underway with the money that’s available.” 

Actual construction of the facility should be relatively fast, considering that the initial phase consists largely of laying railroad track, said Tim Woods, who is coordinating initial business development for Des Moines Transloading. 

“If we had our way, we’d be operational this fall, but that might be pushing it,” he said. “It may be spring before we’re actually operational. It’s a busy time for construction companies.”

Woods, a former executive with Iowa Interstate Railroad and past president of the International Traders of Iowa, said the facility will eventually accommodate three types of transloading, with an initial focus on bulk transloading of rock and construction aggregate. 

“That’s a quick way to get moving within the facility, is by handling bulk material,” he said. “There’s plenty of need for construction rock with all the activity going on downtown.” The facility will later accommodate transloading of dimensional products like lumber, and ultimately warehousing activities once a warehouse is built in a later phase. 

The delay, while frustrating for city leaders and shippers alike, was not entirely unwelcome, Conner said. 

“One of the things we’ve recognized is that Des Moines and the region are just so truck-based, and that was the root of the MPO analysis and all the study we’ve done,” she said. “I think we’ve actually given people opportunity to think about how this might work for their business model, when maybe they weren’t contemplating it before.” 

To read a Business Record Insider article from 2014 about the transload facility, click here.