Once touted as a key economic development tool for southwestern and central West Virginia, the $32 million Heartland Intermodal Gateway is likely to shut down this fall, and go on the auction block within a year, Transportation Secretary Byrd White said Tuesday.
Members of the state Port Authority on Tuesday authorized White to negotiate a short-term contract with a private entity to operate the intermodal facility in the interim, with the intent of selling the 100-acre road-to-rail cargo transfer station at Prichard, Wayne County, at auction within a year.
White said that Norfolk Southern railroad, which donated much of the property for the intermodal facility, will stop service to it in October unless the railroad is able to reach a 15,000-container-a-year threshold.
“If we can’t get to 15,000 containers a year, they’re not interested,” White told the Port Authority.
In May, he said, Prichard handled a total of 68 containers.
As the only intermodal facility in West Virginia, the state-of-the-art complex uses giant stacking machines to move 20- and 40-foot cargo containers between rail cars and flatbed trucks.
White said Tuesday that the state is losing about $500,000 a year operating the facility.
“The old saying is, ‘When you’re in a hole, quit digging,’ ” he said.
In the 2019-20 state budget, Gov. Jim Justice zeroed out taxpayer funding for the facility. White said Tuesday that it will run out of operating funds within six weeks.
He said he had not spoken directly to Justice about Prichard, but added that, “losing a half-million a year does not make anyone happy, and I think the governor’s in that boat.”
Justice appointed White, a longtime business colleague, as Transportation secretary in March, after firing Tom Smith for reportedly failing to adequately address problems with deteriorating secondary roads around the state.
Prior to its December 2015 opening, government officials touted the facility as a game-changer for the region’s economy.
“The Heartland Intermodal Gateway Facility will play a vital role in helping our state successfully compete for upcoming economic development projects,” then-Gov. Earl Ray Tomblin said during a tour of the site in fall 2015. “The investments supported by Congressman [Nick Joe] Rahall and our state Department of Transportation have the potential to open a number of freight corridors and port destinations from Virginia to Chicago, and will help our state strengthen its presence in both the trucking and rail shipment industries.”
The facility never achieved those lofty goals.
A planned four-lane highway linking it with Interstate 64 remains on the drawing board. Proposed barge traffic to the complex would require dredging about 2 miles of the Big Sandy River.
“At present, we couldn’t afford to dredge a bathtub,” White said Tuesday.
One key hangup discussed Tuesday is that the facility’s major customer, Toyota Motor Manufacturing, uses 20-foot containers to bring parts to its plant in Putnam County, while companies shipping lumber require 40-foot containers. Prichard has never had enough incoming 40-foot containers to meet their needs.
White said he believes there are several options for private entities to operate profitably at the complex, although continuing it as an intermodal facility is probably unlikely.
“Having it strictly as an intermodal facility, in my opinion, to turn it around would take a long time,” he said.
Commerce Secretary Ed Gaunch asked that his department be kept apprised of developments with the complex, noting, “I see this as a commerce function, ultimately.”