$5.5 mil rail spur in Calverton has just one customer right now

07/05/2013 2:30 PM |

TIM GANNON PHOTO | The rail spur runs along Connecticut Avenue and into the EPCAL site.

The $5.5 million restoration of the rail spur into the Enterprise Park at Calverton was hailed by politicians with hard hats and shovels when the job was first begun in May 2010, but three years later, only one company is actually using the rail spur.

Paul Victor, president of New York and Atlantic Railway, which handles freight on the Long Island Rail Road, said the company has only one active customer using the rail spur, Eastern Wholesale Fence.

When the spur was completed in 2011, two Calverton companies, Eastern Wholesale Fence and Metro Biofuels, were expected to use the spur, which terminates near those companies’ locations on the western side of the EPCAL industrial park.

Since then, however, Metro, which also had oil terminals in Brooklyn, has declared bankruptcy. The business, including the EPCAL site, was acquired by the Red Apple Group, headed by billionaire John Catsimatidis, who also bought the ConocoPhillips oil terminal in Northville.

The new company is called United Metro.

Mr. Victor said that, so far, the new company has not reached out to New York and Atlantic about using the rail spur.

United Metro representatives could not be reached for comment.

On the other hand, Mr. Victor said, the arrangement with Wholesale Fence “has worked out precisely as we hoped it would.”

But, he added, “We were hoping to have two anchor customers.”

Riverhead Supervisor Sean Walter was critical of the rail spur’s design when it was under construction, saying it essentially was designed to serve only two businesses. He had proposed building a new siding off the spur, heading toward the center of the industrial park, where it would serve more businesses — a plan that did not come to fruition.

“I think the ultimate goal is to try to have businesses at EPCAL locate either on property to the south that we are subdividing, where the rail could fit right into that property, or to try to run it up Burman Boulevard, where there are a lot of businesses,” Mr. Walter said Friday.

But, he added, any changes to the rail spur would need additional federal funding or funding from the private businesses that seek to benefit from it.

The rail spur restoration was funded with $4.8 million in federal stimulus funds and additional money from the state.

“The town is not going to pay [to extend the rail spur],” Mr. Walter said. “I’ve heard passing interest, or people saying they think it’s a good idea and they’d like to use it, but nobody has come to me directly and said, ‘We need this. When can we get it?’ So right now, it’s just serving one business.”

Another existing EPCAL business that’s interested in extending the rail spur is Island International, which is in contract to purchase property on Burman Boulevard with the intention of building facilities for a new company there, Island Green Steel, that will make metal studs for use in construction.

Although he hasn’t reached out to town officials, Island International president Tim Stevens told the News-Review he’s hoping to have a new rail siding extended through the east side of buildings along Burman Boulevard, which would feed the Island Green Steel building at 400 Burman Boulevard, along with the adjacent Lido Stone building, and possibly four other buildings to the north, he said.

But the land from which he proposes to have the spur extended is currently under the control of the U.S. Navy, which is still conducting cleanup activities to remove pollution from the land. Official with the Navy, which used to own the former fighter jet plant property, have given no timetable for completion of the remediation work.

Use of a rail spur would take trucks off the road and allow materials to be shipped by rail, Mr. Stevens said.

“Direct delivery is key in our business,” Mr. Stevens said. “Our master coil steel exceeds weights of 60,000 pounds per coil and total freight car loads will exceed 250,000 pounds per car. We always try to achieve maximum efficiency when moving this kind of weight and limiting excess cranes and trucks.”

He said the company will be trying to engineer a plan that would benefit both his business and others at EPCAL.

Mr. Victor said that while New York and Atlantic provides freight services to businesses, it’s up to the businesses themselves to provide the direct rail connection to their properties.

“We’re like any utility: If you want the service, you’ve got to pay to connect,” Mr. Victor said.

tgannon@timesreview.com

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