By Ian Ross
A proposed rail-to-truck reload centre development could put Sault Ste. Marie on the map as a major freight corridor into the U.S. Midwest and into the eastern states, says a local businessman.
With letters of support from forest products companies and manufacturers from across Canada, Albert Giommi is taking a second crack at establishing a dedicated rail/truck log and material transfer centre and industrial park in the city's north end.
Four undisclosed tenants in the wood products and steel manufacturing sectors are ready to come aboard at the Odena Reload facility, provided unspecified funding can be arranged to build a rail spur onto his 29-acre property on Sixth Line.
Giommi says the $14-million development capitalizes on the Sault's strategic transportation location in Canada, providing a more established direct rail and road corridor into the U.S. market.
Giommi, who owns a trucking firm, a construction supply company and runs a modest reload operation on his largely vacant land, is offering incoming tenants the option of either buying or leasing out tracts on his property.
Giommi's plan, which has been in the development stages for three years, is to have logs, lumber and other material arrive in the Sault from across Canada for temporary storage in warehouses prior to being reloaded onto rail cars or trucks for shipment into the U.S.
As part of the cost of development, Giommi is investing $2.4 million in buildings and equipment, such as log loaders and forklifts for inside storage, while further site-development financing would come from contributing tenant-clients and "other monies."
At the outset, a total number of 40 full-time and seasonal jobs, including stackers, sawyers and heavy equipment operators, are expected to be created by the tenants and Giommi's operation.
A vital component of the reload facility is the construction of a Y-shaped rail spur and a siding to store rail cars coming off the Canadian National Railway line adjacent to Giommi's 29-acre property. The line also runs south into the city and to the international border from Wawa and Hearst.
The cost of the spur to service tenants is estimated to be between $300,000 and $400,000.
"In order to get clients on the project and establish business in the Sault, we need a rail spur," says Giommi, who mentions that one Winnipeg client will ship more than 200 rail cars worth of freight annually to the Sault for reloading onto trucks for shipment to distribution points in Chicago and within Michigan, Indiana and Ohio.
Another client is looking to set up a manufacturing plant on the property to produce wood mouldings.
The facility could also potentially serve as a depot for local industries to store raw material in warehousing space.
One prospective tenant for the property is known to be the Superior Water-Logged Lumber Co. Inc. of Ashland, Wis.
As part of a six-phase plan, the U.S. company intends to expand their entire operations into Canada to be closer to their wood source. Their first step is to acquire property on the Odena industrial park site and open an office in preparation to build a $9-million US sawmill.
According to published reports in an Ashland newspaper, logs would be processed in Wisconsin for a period of time, but Superior's operations would gradually be expanded at the Sault, leading to the construction of hardwood and pine remanufacturing facilities.
Another Superior Log sawmill operation is slated for development in Huntsville, closer to their wood supply, with other future developments in the works at several other Canadian locations.
Superior Log would ship logs by truck and rail from sites in Ontario, Quebec and as far away as Nova Scotia through the Sault for entry into the U.S.
However, Superior Log's arrival into the site may be delayed. A rift among the board of directors of the parent company, Enviro-Recovery Inc., over jobs leaving for the Sault has forced the company into involuntary bankruptcy, but the matter likely will be resolved one way or another by mid-April, says Giommi
The company mines the chilly depths of Lake Superior recovering old growth timber.
The deepwater lake is considered a jungle of waterlogged timber that once floated in, in giant rafts, during the timber boom of the late 1890s.
It is estimated about 10 per cent of the logs became waterlogged and sank on their way to sawmills on Lake Superior's shoreline.
Lake Superior's bone-chilling water temperature and minimal oxygen content has kept the logs in pristine condition offering the potential recovery of thousands of virgin, old-growth trees.
The lumber is sold in the U.S. as a premium high-end finished product.
"We're waiting in the wings, waiting for them to be tenants on the property," says Giommi, but if circumstances dictated otherwise, he indicates the reload centre would proceed regardless.
Giommi says the trump card the Sault holds over other freight transfer centres in southern Ontario is its direct single-line rail access to major U.S. Midwestern markets ever since CN's acquisition last year of the Algoma Central Railway's Chicago-based parent company, Wisconsin Central.
CN, through its regional line subsidiaries, provides connections to Chicago and further south to New Orleans giving shippers a huge break from onerous railway interchange rates known as switching fees, he says.
"Right now people who rail (material) into the New York market, once they get in Toronto area, pay humungous switching fees. And we save them all that being that CN now owns the track."
Based on his research, and through networking with major forest industry manufacturers, Giommi has big plans to attract transcontinental freight business.
"We're going after the business currently held by reload facilities in Niagara Falls and Windsor, from truck-to-rail and truck-to-truck," Giommi says.
"All this does is get the product closer to the customer for just-in-time delivery."
Giommi possesses letters of intent from forest products companies in Ontario and Western Canada, including pulp and paper giant Weyerhaeuser.
"We've been to North Carolina to talk to their logistics people about railing material down from Wawa, reloading it here and then onto their destination.
"I've called all the big companies."
This is Giommi's second crack at establishing an industrial park and reload centre on his Sixth Line property.
A long drawn-out city planning battle in the late 1990s with nearby residents landed before an Ontario Municipal Board (OMB) justice and eventually scuttled an earlier partnership of Giommi's with Superior Industrial Rail and All-Canada Crane for a reload centre, rail car refurbishing shop and manufacturing component.
But the controversy sparked a municipal debate concerning the absence of fully serviced industrially zoned land with rail connections, which led to the city's still-evolving industrial lands strategy.
Half of the property is zoned heavy industrial, and among the permitted uses as ruled by the OMB include a reload centre and sawmill.
Since the land sits atop a huge groundwater aquifer, very strict environmental controls were placed upon it, says city planner Don McConnell, who has viewed Giommi's latest proposal prior to its formal discussion at city council.
"That is without a doubt the mostly tightly controlled piece of property in town."
Officials with the Sault Ste. Marie Economic Development Corp. were not available for an interview
with Northern Ontario Business.
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