Knife River proposal would buy city land, build rail spur and fund ball‑field relocation

Sioux City staff and Knife River Midwest presented a multi-stage plan to transfer and lease city property in the Floyd River urban renewal area and build a private rail spur to serve Knife River’s expansion.

Marty Daugherty, Sioux City’s economic and community development director, said the first parcel sale would close by year‑end for $205,000, with a second sale (covering the ball fields area and Chase Avenue vacation) scheduled by Aug. 1, 2027, at $495,000. Daugherty said the city would purchase one lot at 1806 Hawkeye Drive for $23,000 to provide additional parks storage and that several property swaps and $1 consideration transfers are included to reconfigure parking and displaced city employee spaces.

Daugherty said Knife River agreed to either provide $500,000 in cash above the purchase price or perform in‑kind paving and relocation work to help move the Headed Little League ball fields, with total relocation assistance likely to be higher once plans are finalized.

The company described two phases of rail construction and a proposed 50‑year ground lease for the corridor. Daugherty said Knife River estimates roughly 20 new jobs from the facility and expected to finish initial rail work within three years, and the city will retain permanent utility easements and address stormwater needs in coordination with the company.

Chris Winkle of Knife River Midwest said, "We've come up with a good plan here, and we're really excited to move forward and also help with the relocation of those ball fields." Jill Waterscheid, Neighborhood Services Manager, said the land sale would help bring federal grant dollars into Sioux City and create housing, noting another agenda project would deliver 24 housing units funded with IFA and HOME dollars.

Council members pressed staff and Knife River on operational details including alternate access if a train blocks crossings, snow removal and maintenance responsibilities for at‑grade crossings, assurances about the timing for moving ball fields and displaced city operations, and commitments to coordinate train traffic and provide at least one week’s notice for scheduled deliveries.

Staff said maintenance and notice language would be included in the final agreement and that the city will assist Knife River in applying for rail‑related grant funds. The council read a resolution inviting proposals and announcing the city’s intent to accept Knife River’s proposal; the item will return at a formal hearing and vote as part of required public‑process steps.

Next steps: staff will return with a formal hearing, final agreement language and documentation of funding commitments before land transfers or leases occur.