The Port of Kennewick is handing over the responsibility of maintaining a mile of rail in downtown Kennewick to a private company.
Port commissioners approved selling the rail spurs the port has owned since the '50s and '60s to Kennewick Transfer, or KET LLC, in September 2012.
But the property transfer didn't become final until recently after a six-month notice period passed without BNSF Railway Co. or Union Pacific Railroad Co. protesting, said Lucinda Luke, the port's attorney. She gave a report to port commissioners Tuesday.
The port owned about one mile of rail in downtown Kennewick near Bruneau Street from Washington Street to the Ash Grove Cement Co. near the cable bridge. Ash Grove Cement is the only company that regularly uses rail cars on the spur, officials have said.
The port gave KET, a sister company of Frontier Rail Corp., the firm moving rail cars for Railex in Wallula, the easements for the Bruneau Street rail and a 12.7-acre parcel north of Bowles Road in Finley that includes a quarter-mile of rail.
The property, worth about $41,000, should work for a small rail yard. Access to the property is limited because of the rail spur and most of the property is in a flood plain.
In exchange, KET is continuing to serve customers and taking over the maintenance and liability burden.
Port officials estimate the port will save about $40,000 a year now that it is no longer responsible for the line.
The sale actually closed in September, a year after port commissioners approved the purchase and sale agreement, Luke said. But the port had agreements with BNSF and Union Pacific dating from 1953 and 1960 that the port would maintain that rail, and had to give the companies a notice that the agreements were being terminated and a chance to object.
The rail was an asset that port staff determined could be better handled by a private company, said Larry Peterson, the port's director of planning and development. Port commissioners had expressed a desire to narrow down the port's focus to include fewer projects with the greatest importance to the overall public.
KET is better qualified to maintain the rail, Peterson said. Businesses will see an enhanced quality of service with the switch. And taxpayers will not be paying the cost for a few rail lines that serve individual businesses.
The port still does own the rail on the property Gunderson Northwest leases from the port. However, Gunderson Northwest, a company that refurbishes rail cars, uses and maintains that track.
-- To submit business news, go to bit.ly/bizformtch.
-- Kristi Pihl: 582-1512; email@example.com