South Dakota Railroad Board again seeking ideas for Platte-Napa line

Talk about it

The South Dakota Railroad Board is again accepting proposals from companies wanting to restore service on an abandoned railroad line from Platte to Napa Junction near Yankton.

The board agreed in 2006 to sell the state-owned line to Wagner Native Ethanol for $1.5 million, but voted earlier this year to accept new proposals to renovate the line after the company missed a deadline to shore up financing.

Board members in April rejected the submissions from the Napa-Platte Regional Railroad Authority, Wagner Native Ethanol, Central States Rail Associates and Dakota Southern Railway Company.

The new deadline is Oct. 1, and board members will discuss the proposals at their mid-October meeting, said board chairman Chet Groseclose of Sioux Falls.

“We would like to get something going down there,” Groseclose said Thursday. “It does seem like there’s an opportunity for economic development down in that area.”

South Dakota bought the 82-mile stretch after the Chicago, Milwaukee, St. Paul and Pacific Railroad, known as the Milwaukee Road, declared bankruptcy in the late 1970s. Estimates to restore the portion were reaching $30 million and the state doesn’t have the money to fix it, officials have said.

At the April meeting, board members directed the Napa-Platte Regional Railroad Authority, Wagner Native Ethanol and Dakota Southern Railway Company to talk to the state Department of Transportation to address questions and submit amended proposals. Central States, which supported the Napa-Platte Regional proposal but requested that it be made operator of the line, was not asked to resubmit.

The board directed Bruce Lindholm, the DOT’s program officer for the office of air, rail and transit, to work with the groups and seek some common ground. The groups indicated they wanted to pursue proposals on their own, he said.

“They don’t want to work together,” Lindholm said.

Wagner Native Ethanol in its initial proposal said it was planning to build a 50 million gallon per year ethanol plant, saying that the railroad deal would restore rail service to elevators in Wagner, Tyndall, Avon, Tabor and Dante.

The Dakota Southern proposal offered to purchase the line for $2.1 million.

The Napa-Platte Regional proposal was for a 15-year lease on the rail line from the Napa Junction west to Wagner, with a request to allow the line west of Wagner from Ravinia to Platte to be salvaged. The proposal would have used the estimated $180,000 from the rail and ties as payment on the lease and to help rebuild the line starting from the east.

Questions arose on the legality of whether the state could accept payment on a lease agreement with funds raised through the sale of state-owned property.

Ken Cotton, an attorney for the authority, said it is seeking its own proposals with plans to recommend one to the board at the October meeting.

“We hope that there’s enough interest out there so we can put something together that’ll be mutually beneficial to everybody,” Cotton said.

Groseclose said the board has settled one key issue on the line, agreeing to retain ownership of a two-mile stretch of rail where the line connects to the BNSF line northwest of Yankton. That decision will help assure rail access for a proposed Dakota Plains Ag Center grain loading facility at Napa Junction, he said.

“We’re going to continue that ownership so we can have some control over the access to the line,” Groseclose said.

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