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‘Railroad to nowhere’ among Michigan stimulus proposals

By Todd A. Heywood

Michigan Messenger (Michigan)

January 26, 2009

Will President Obama’s stimulus bill help Michigan’s ailing economy and crumbling infrastructure? Or will the money be wasted on unnecessary or unproductive projects?

Those are urgent questions as interest groups representing Michigan’s local governments — from the Michigan Township Association to the Michigan Municipal League (MML) and the state’s County Road Association — are working hard to identify projects eligible for federal stimulus money. Each group has asked local government agencies to submit ready-to-go projects to the associations and the state.

With the legislation expected to land on the president’s desk by Feb. 16, there is not a lot of time for the public to sort out worthy initiatives from the turkeys. But already, Michigan Messenger has found one spending project that may be more pipe dream than reality, and whose public benefit some find debatable.

The MML, for example, released a list of 1,200 projects worth an estimated $3.33 billion on Jan. 13, including a proposal by the Village of Elsie, a small municipality in the northeast corner of rural Clinton County, that would allow the village to spend $750,000 to build an 1,100-foot rail line to an abandoned manufacturing facility.

The facility, once home to Lear Corporation, an auto supplier, is being looked at by a company that would require a rail spur.

Village President Scott Carie said that the village has not signed any agreements with any business to relocate to the facility. He also noted that the facility is actually located in Duplain Township, just three houses short of being within the village limits.

“The village has not requested it, no,” Carie said of the spur. “I believe John Czarnecki (CEO of the Clinton County Economic Alliance) is trying to earmark the funds for the proposed railroad spur. I am a little bit shocked that he did that.”

Czarnecki confirmed he had submitted the proposal to the Michigan Municipal League. He said that while he could not disclose the potential employer that was eyeing the facility, the recent economic downturn had made the company delay considering the purchase.

Czarnecki said the addition of a rail line would increase the likelihood the property could be redeveloped into a manufacturing location. He said the cost is particularly high because the spur would have to be built over three private properties, including a location owned by a Marathon service station that was contaminated 40 years ago. Building the rail line would have to include clean-up for the Marathon site.

Carie said that although the village had not requested the rail spur, he would support such a plan.

“Absolutely, as long as it is not a loan. It would have to be a grant. We don’t capture any tax revenue on that property the proposed spur would go on,” Carie said.

“I think [the Clinton County Economic Alliance is] just trying to earmark the funds because there is a really good chance of this going through. This is not a cart-before-the-horse thing.”

In 2002, the village increased its sewer capacity to deal with the Lear Corporation, which was operating three shifts every day with 650 employees, Carie noted. By the time the company shut down in 2006, it had only 350 employees.

The village continues to provide water and sewer service to the facility, and the facility residents pay for that. But with the facility shuttered, the city has seen no income from the property.

“Right now water is shut down to that building, and we get no revenue from it. Nine-hundred eighty people are picking up the tab for that [2002 expansion],” he said.

The village operates on an annual budget of $680,000, Carie said, much of that going to debt to pay off loans for the 2002 expansion. Whether the extended rail line would revitalize the town’s economy is unknown.