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Commission reviews JBC Rail 'switcher' agreement, IEDC grant compliance and repayment options
Summary
Staff updated the commission on a build-operate-transfer switcher agreement tied to a $1,000,000 IEDC grant, a $525,000 county front-fund for a CSX switch with a five-year payback requirement, and options to modify contract dates or extend the switcher contract to align terms.
La Porte County staff reviewed a complex set of rail agreements tied to the Kingsbury Industrial Park improvements and a $1,000,000 grant from the Indiana Economic Development Corporation (IEDC).
Mr. Reardon explained the county's work dating back to 2020 and said the project involved three separate completion dates that complicate contract timing across a build-operate-transfer (BOT) agreement, a sidetrack agreement with JBC Rail and an operating agreement with CSX. He noted the county council front-funded $525,000 to install a CSX switch and that repayment of that amount depends on measurable rail-car movement and related revenue. "The pathway to get the money back was actual switch activity, moving train cars in and out with CSX," he said.
Staff recounted that JBC Rail and private partners agreed to backstop repayment obligations if switching activity did not generate the necessary revenue. Mr. Reardon said staff has requested rail-car movement data and that a spreadsheet tracking individual car movements is kept; he also reminded the commission the redevelopment authority reserves the right to audit switching activities and revenues.
Legal staff (Guy S. DiMartino) explained the county is not in the rail business and described why the sidetrack agreement should be signed by a private operator rather than the county, and he recommended modifying BOT completion dates so they align with CSX contract termination terms or allowing a five-year extension to preserve continuity. Commissioners also discussed indexing the per-rail-car credit to reflect rising costs over time.
Staff said the switcher operation did not become operational until 2024 and that, to date, the commission is tracking roughly $27,000 in repayment credit toward the $525,000 obligation. Options under consideration include an addendum to the BOT agreement to align dates, issuing a five-year extension, or re-bidding switching services at the end of the contract term. No final contract action was taken at the meeting; staff will continue negotiations with JBC Rail and pursue an addendum or extension as appropriate.
