Moses Lake Industries addresses need for rail

Stakeholders seeking catalyst for increased efforts

MOSES LAKE - A longtime Moses Lake company is sounding off about the need for local, state and federal support to provide rail access locally.

Moses Lake Industries Executive Vice President Mike Harvey, Chief Financial Officer Kristin Tofani and Cascade Consulting Group Government Affairs Consultant Pat Boss met with Columbia Basin Herald Editor Bill Stevenson and Circulation Manager Tom Hinde Monday for an editorial board meeting.

Harvey and Boss called for greater efforts to put rail around the Grant County International Airport, estimating the cost of putting in a new rail segment running along the airport would cost about $5 million.

It is a different rail proposal than the effort to move the railroad line from downtown Moses Lake to a proposed location along Wheeler Road.

Harvey said Moses Lake Industries has expanded and provided geographic diversification by purchasing a facility in Daliam, China. A second will probably also be built there as well, he added.

Parent company Tama Chemicals has six factories in Japan, one in Singapore and one in Taiwan, but no presence in China, Harvey said, where a great deal of semiconductor manufacturing is done and largest customer Intel is building a factory.

"We will probably end up shifting potentially quite a bit of our operation to China," Harvey said. "We are not a labor-intensive company. The reason people normally move to China is to save on labor costs, but we have a very skilled group of people."

Moses Lake Industries has essentially zero turnover from people leaving to other companies, he added. The company, based in Moses Lake since 1984, employs about 140 people in well-paying positions, Harvey said.

"Now with the new range of gas prices, our transportation cost to get our raw materials in here is going to change how we look at things," he explained. "Our largest raw material, our largest volume, comes all the way from West Virginia. We get multiple truckloads every week of this raw material."

Harvey said he doesn't like the idea of going to Washington, D.C., to look for money, but the community, government and local leaders need to realize companies will go where they can survive economically.

"When we have the gas prices here in rural Washington and we can't get our goods to our factory economically, it's not going to happen in a big flash, but it will change the company's direction," he said.

Boss would like to see Gov. Chris Gregoire or gubernatorial candidate Dino Rossi make the effort to put rail access in Moses Lake part of their budgets in the fall.

"With as many earmarks as the governor puts into her budget, this should be one of them," he said. "If we're talking about One Washington here, this is a good example of a One Washington issue. It's not a huge earmark and it would get a lot of stuff done. There are a lot of companies here out around that airport that are going to need this, too."

Rail access would provide Moses Lake Industries and other companies millions of dollars worth of savings, Harvey said. The Moses Lake Industries sites in China have rail access.

Other companies in need of rail around the airport include Genie Industries, ChemiCon and Takata, Boss and Harvey said.

"Genie ships 200 trucks a week to Seattle, then those trucks get put on the railroad line in Seattle, and then they go east," Boss said. "They're trucking stuff over (Snoqualmie) Pass to catch a railroad line when we have a railroad line within a mile of their building. That's crazy."

But the companies don't necessarily know how to organize a lobbying effort, Harvey said.

He and Boss believe noting a municipal entity such as the Port of Moses Lake needs to step forward in order to drive the movement and gather funding.

"We had hoped the port, with their expertise and ability in this area, would get involved and take a position of leadership, because the port is the one common element," Harvey said. "From our view point, we know how to make very good chemicals to make the most advanced computer chips in the world, but we don't know how to work our way through the levels of local, state and national government. That's where we need help. We have talked with the port for years now, and nothing's happened."

Boss and Harvey believe the City of Moses Lake, Grant County or the Port of Moses Lake could call for a bond or earmark to help provide funding to place rail around the airport, or a railroad district could be formed.

"We're trying to productively, positively help push the port here," Boss said. "The port's got to get moving, the governor's got to get moving. I think if they all start making a larger effort here, I think things will happen, but somebody's got to make the first move."

"I understand the anxiety and we do understand the need," Port of Moses Lake Commissioner Delone Krueger said. "We're continuing work with our legislators locally and in the state, especially our own small request to help us with a grant to put this in. We feel it would be very important to the continued economic development of the port area, especially that of the east and north side."

Krueger pointed to positive response to a recent showcase of a tour of the rail aboard the Spirit of Washington, set up by the Columbia Basin Railroad and the port to provide state decision makers a visual of what they would like to do and how it would affect the economic base.

Commissioner Mike Conley said the port recently met with a contract lobbyist in Olympia to move the issue forward at the state level, and hoped to look over a contract at the port's next meeting Monday at 2 p.m.

"Part of that process would be some of those companies out on that side of the port that would be interested in helping fund that effort," Conley said.

Krueger said a general obligation bond would not be possible because the port's debt capacity is not large enough and there may be other things with which the port needs to be careful.

"Whether there could be some kind of revenue bond, that would be ideal, but you have to enough revenue to repay the bonds once they're sold," he said. "We did have one meeting with our bond counsel and are still awaiting further comment on that."

"My first, personal comment on that is I think it's going to be hard to see much revenue come back to the rail itself," Conley said. "Any kind of debt service to be paid out of user fees would be a stretch, I think. That's my personal opinion. Our hope is that we can get some grant funding to do this."

Conley believes rail should be a high priority for the port, with the potential to create a lot of jobs and save "a bunch of them" as well.

"We understand the economic value and we're concerned with the companies that would like to use it," Krueger agreed. "There's excellent companies that hopefully would use it as soon as we can figure out how to get the thing in there."

Boss pointed to efforts to recruit Boeing to Moses Lake five years ago.

"One of the big things that held them up last time was the rail connection out there, there was none," Boss said. "If they do come back in here and they want to do another project here, we haven't resolved the problem yet. That should have been a major wake-up call five years ago when they were looking around here. Now you've got other companies like Moses Lake Industries expressing concerns."

"We're not just expressing concerns, we bought a factory in China," Harvey added.

Boss likened the situation to "death by a thousand paper cuts."

"We're slowly bleeding, I think is the issue here - it's not going to happen all at once," he said. "There's a slow bleeding going on, I don't think people can see it happening."