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Sioux City Council to vote on land use agreement with Agri-Trading Corporation

January 7, 2019
Southbridge Business Park in Sioux City is shown in this 2014 provided photo. The Sioux City Council is expected to vote Monday on a first amendment to a track and land use agreement with a company that uses track in the city-owned Southbridge Rail Yard to transload animal fats.

SIOUX CITY -- The Sioux City Council will be asked Monday to approve a first amendment to a track and land use agreement with a company that uses track in the city-owned Southbridge Rail Yard to transload animal fats from area meat processing facilities for use in the production of biodiesel.

If the amendment to the agreement is approved, the project will generate $42,680 in annual revenue for the city.

Chris Myres, an economic development specialist for the city, said the city entered into the agreement with Agri-Trading Corporation last April. Agri-Trading has asked for an extension of that agreement to allow the company to meet increasing customer demand in the biodiesel industry. Animal fat is transported via truck to the rail yard, where it’s loaded into tanker cars and shipped to biodiesel plants mostly in Louisiana.

“They’ve been using one of our tracks down there since then; and they wanted to use a second track and they also wanted to add another year to the lease,” Myres said. “It’s not just good for the city with the revenue that’s down there, it’s also good for the companies that are in the area here that are selling them their byproducts.”

According to city documents, under the agreement, which is set to expire on April 9, Agri-Trading paid an annual payment of $38,248, which included $8 per foot for use of Track “C” plus a one-time fee of $6 per foot. The city used the one-time fee to repair Alicia Avenue, the only access road to the rail yard.

In addition to continued use of 2,732 feet of Track “C,” the southernmost track, the company has also requested use of 2,602 feet of Track “B,” the middle track. If the agreement is approved, Agri-Trading would pay the city $5,204 for the use of Track “B” for the remainder of the first one-year term and $42,680 for use of Track “B” and Track “C” for the second year of the term of the agreement. All payments are to be made annually and in advance. Either party can terminate the agreement at any time with 30 days’ notice.

Myres said Agri-Trading is the only tenant currently leasing a portion of the rail yard, but he said other companies have used it in the past on a short-term basis for projects. He said the city’s goal is to develop 27 Flags, a 120-acre property north of the rail yard. He said the area is available for companies that want to build a building on the site, bring in raw materials or ship finished goods out using the rail yard.

“We are hoping to find more tenants to use the yard,” he said.

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