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Statehouse Beat: Why the Heartland Intermodal Gateway failed to deliver

Rarely has a state project gone from bonanza to boondoggle in such a short time.

I’m talking about the Heartland Intermodal Gateway in Prichard, Wayne County.

In the space of 3½ years, the $32 million investment has gone from being heralded as a game-changer for the region’s economy to being readied for the equivalent of a bankruptcy auction.

Clearly, the project was based on sound business principles. Rail intermodal continues to account for a growing percentage of freight traffic, and for good reason in that it combines the relatively low cost and environmental friendliness of rail, with the last-mile convenience of commercial trucking.

HIG also wasn’t just some shot-in-the-dark by local politicians, but part of a $320 million public-private investment initiative to heighten tunnels and remove obstacles to permit operation of double-stack intermodal rail cars on Northern Southern’s Heartland Corridor route from Norfolk, Virginia, to Chicago.

What went wrong? Here’s my two cents.

n Location. Backers of HIG used the intermodal facility in Front Royal, Virginia, as a model for the project, a facility that quickly attracted warehouses and distribution centers representing retailers including Home Depot, Kohl’s and Rite-Aid.

Front Royal is about an hour’s drive from the Washington, D.C.-Baltimore metroplex, with a total population of nearly 9 million, which is vastly different from the HIG location in Prichard.

In an article earlier this year updating progress with the Heartland Corridor, the Center for Excellence for Sustainable Urban Freight Systems cited HIG as a “cautionary tale,” noting:

“In the third quarter of 2018, the facility only moved 184 containers, well below the forecast of 30,000 a year and the breakeven of 14,400. While this may be a slow quarter and the facility is less than three years old, operating at 5 percent of breakeven portends a difficult situation.”

The report cited HIG’s rural location as a factor: “Siting a speculative intermodal facility in a rural area outside a smaller city is risky public policy … In this case, the facility was fully built out. It might have been wiser to phase the investment as the volume grew, and as major shippers committed to the region.”

Most of the property for the Prichard site was donated by Norfolk Southern, who otherwise had a relatively minimal investment in the project. Certainly, it wouldn’t be the first time the state ended up with a less-than-ideal location for a facility in order to take advantage of corporately donated property. (See: Mount Olive Correctional Center.)

n Access. HIG was on the drawing board for about 10 years before its opening in December 2015, and also on the drawing board were plans to upgrade U.S. 52 connecting the Prichard facility to Interstate 64.

That project still sits on the drawing board, although it is on the Roads to Prosperity construction list, albeit at the foot of the list, and facing the likelihood of being wiped out by cost overruns on higher priority projects.

I don’t recall that I’ve ever personally driven U.S. 52, although I’ve heard it described as “narrow,” “twisting” and “dangerous,” and apparently not ideal for heavy commercial truck traffic.

Proposed barge access to HIG also never got beyond the planning stages of dredging the Big Sandy River. At a Public Port Authority meeting earlier this month, Transportation Secretary Byrd White said of that project, “At present, we couldn’t afford to dredge a bathtub.”

n Marketing. In its final cost analysis for intermodal service through the HIG, published in December 2015, Parsons Brinckerhoff engineers did cost comparisons of moving truckloads of freight to various West Virginia cities near HIG from the Port of Virginia and from Chicago, comparing the costs of moving freight entirely by truck with costs of intermodal.

What they found was intermodal savings per container ranging anywhere from $475 to $1,275.

In the report, the authors stressed the importance of marketing the new facility:

“In order to ensure the success of the terminal, it is important that the terminal be marketed, that businesses within the terminal’s service area be made aware of the terminal and the potential cost savings of using the terminal.”

Instead, marketing was limited and sporadic, relying on the old “if you build it, they will come” maxim in lieu of a full-time marketing division.

The same scenario has occurred over and over with state tourism: Legislatures complain that tourism has failed to achieve its full potential, but repeatedly slash funding requests for tourism marketing and advertising — seemingly always failing to make the connection between the two.

Bottom line, the state once again dropped the ball on a major investment of taxpayer dollars, including $18 million of state dollars, not counting annual appropriations to offset operating losses.

HIG’s success depended on cooperation and coordination of various state offices including the Port Authority, Highways, Commerce and the Governor’s Office, and that did not come to be.

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I have to give House Speaker Roger Hanshaw, R-Clay, credit. I didn’t believe there was any circumstance that could make me feel badly for Delegate Pat McGeehan, R-Hancock, but it happened last week.

Yes, McGeehan may be an insufferable tea partier, but he was a victim of young Speaker Hanshaw’s Napoleonic wrath.

Hanshaw stripped McGeehan, along with Delegate Tony Paynter, R-Wyoming, of all committee assignments, including legislative interim committees.

Both had the audacity to oppose him on the omnibus education 3.0 bill, including voting with Democrats in an attempt to adjourn the special session without taking up the bill.

Back in the spring, Hanshaw removed McGeehan from the powerful Judiciary Committee without explanation, but with speculation that it was because he had spoken in favor of a motion that ultimately killed omnibus education 1.0 in the form of a postpone indefinitely motion on Senate Bill 451.

Hanshaw is not the first speaker to punish members for defying leadership. (Chuck Chambers understood that the most effective way to grab the attention of malcontents was to revoke their assigned Capitol parking. Walking from Laidley Field in 10-degree weather is a very effective method for readjusting one’s attitude.)

However, in removing McGeehan and Paynter from all committee assignments, Hanshaw is not only punishing them, but also punishing all residents in the 1st and 25th Delegate Districts, whose representation in the House is now diminished.

Hanshaw also followed the lead of Senate President Mitch Carmichael, R-Jackson, in removing a professional educator (Delegate Mark Dean, R-Mingo) as chairman of the Education Committee, for having the audacity to declare that the charter schools provisions in omnibus 3.0 will not benefit public education in the state.

Traditionally, committee chairpersons have been appointed to take advantage of their expertise in their particular fields: Judiciary chairs tend to be lawyers, Finance chairs usually are business leaders, etc.

That education professionals have been cast out of leadership positions in the House and Senate Education committees portends that leadership is not finished with efforts to privatize public education.

The ink was barely dry on omnibus 3.0 (House Bill 206) before the Koch brothers-financed astroturf group Americans for Prosperity-West Virginia was wagging a finger and tsk-tsking leadership for not going far enough to dismantle the current system.

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Finally, it was just a few months ago that controversy erupted over a display at “GOP Day at the Capitol” outside of House chambers that juxtaposed a picture of Congresswoman Ilhan Omar, D-Minn., with an image of the 9/11 terrorist attack on the World Trade Center.

Party officials and House of Delegates leadership immediately dismissed the display as an outlier put up by a member of a fringe group without authorization from event organizers, and not representative of the Republican Party as a whole.

Speaker Hanshaw issued a statement saying the House unequivocally rejects hate in all forms, but House Republicans quickly shifted the narrative into criticism of House Democrats who reacted badly to the provocation.

However, it turns out that attacking Omar, and other progressive Democratic congresswomen of color, evidently was not some ranting by an extremist fringe, but a key component of Donald Trump’s reelection strategy, a strategy that, if not endorsed, at least is being tolerated by the Republican Party.

In the House of Representatives, 187 Republicans — including the entire West Virginia delegation — voted against a resolution condemning Trump’s rhetoric in telling the four congresswomen to “go back” to their ancestral countries, even though all but Omar are native-born Americans.

“Go back to where you came from” is clearly such a racist trope that it is cited by the U.S. Equal Employment Opportunity Commission as a textbook example of a violation of anti-discrimination employment laws.

Trump subsequently tried to portray his attacks on the congresswomen as an “America: love it or leave it” ultimatum, invoking the slogan of the far right in the late ’60s and early ’70s directed at those who opposed the Vietnam War.

The fallacy of that statement, then as now, is that it presumes one cannot love America and also be critical of its policies, such as its involvement in a disastrous and ultimately futile war.

With the horrifying spectacle of the Trump rally Wednesday evening, the Republican Party, statewide and nationally, is at a crossroads, and must decide whether it will continue to follow Trump, potentially to its long-term detriment.

Reach Phil Kabler at

philk@wvgazettemail.com,

304-348-1220 or follow

@PhilKabler on Twitter.

Funerals for Sunday, October 13, 2019

Adams, Tammy - 2 p.m., Evans Funeral Home & Cremation Services, Chapmanville.

Averson, Louie - 2 p.m., Armstrong Funeral Home, Whitesville.

Durst, Betty - 3 p.m., Waybright Funeral Home, Ripley.

Elkins, Norwood - 2 p.m., Spencer Chapel, Hewett.

Farley, Richard - 2 p.m., Henson & Kitchen Mortuary, Huntington.

Hatten, Joseph - 1 p.m., Casdorph & Curry Funeral Home, St. Albans.

Light, David - 2 p.m., O’Dell Funeral Home, Montgomery.

Samples, Romie - 2 p.m., The Family Cemetery, Procious.

Williamson, Hi - 11 a.m., Evans Funeral Home & Cremation Services, Chapmanville.