Gary Airport Appraises Scrap Yard For Rail Route

Airport may pay scrap metal recycler to relocate.

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December 15, 2009

Gary/Chicago International Airport continues to prepare to buy and relocate a scrapyard business, which could again hike the cost of its railroad-relocation plan.

The Gary airport authority last week authorized spending $27,000 to appraise both the plant and land at the Summit Inc. scrapyard, long known as Western Scrap, according to Airport Director Chris Curry.

The airport wants to buy the scrapyard at 6901 Chicago Ave. so Canadian National Railway tracks blocking expansion of its main runway can be rerouted. The FAA has already approved a plan that would reroute the tracks so they would run north of the scrapyard, but cost estimates for that plan have approached $100 million.

The estimated cost of the new plan is somewhere in the range of $50 million, although Curry said there are still "unknowns" about the scrapyard, including its environmental condition.

The Northwest Indiana Regional Development Authority has been involved in negotiations with Canadian National since last year.

"The main thing we are trying to focus on is what we can do that's practical to point the airport toward growth," said RDA Executive Director Bill Hanna on Monday.

Summit Inc. owner Peter Coulopoulos could not be reached for comment on Monday.

The RDA is expected to fund at least part of the local share of the project. The Federal Aviation Administration will contribute $20 million to $25 million for the project, Curry said.

That would leave the share to be funded locally at $25 million to $30 million.

The FAA would contribute more for the rail plan it originally approved -- up to $58 million, Curry said. That would still leave at least $42 million to be funded from local sources.

The airport continues to work on both rail relocation plans and hopes soon to have a binding agreement with Canadian National for the second, less expensive one, Curry said. Once the airport has that agreement and better cost estimates in hand, it will confer with the RDA on which plan to proceed with, he said.

Curry said eventually the less expensive rail reroute under consideration could become part of the original, more extensive FAA-approved plan.

"The plan we are considering right now is really phase one of the project," Curry said on Monday. "The intent of the airport is to someday implement the FAA-approved plan."

But the purchase of the scrap yard also could hike the cost of even the cheaper plan. Two years ago, the airport bought Truck City of Gary's property to make way for the expansion, paying $820,000 for the land and facility and chipping in $420,000 more for the business' relocation expenses.

The move to acquire the scrap yard has also raised some eyebrows because Summit Inc. in the past year installed a new multimillion-dollar metal shredder, which could end up being an added moving expense. The city of Gary was issuing permits for contractors working on its installation from February through May.

Curry said when installation of the shredder started, the airport did not know it would be moving forward on the less expensive railroad-relocation plan. A report issued by consultant SEH in late March recommended the airport begin seriously reviewing that plan.

The airport has already been negotiating with Summit Inc., Curry said. The owner is allowing the airport's environmental consultants to evaluate the scrapyard.

Gary Building Commissioner Benjamin Robinson said his department is bound to issue permits to contractors who are licensed with the city and have appropriate bonding and insurance. He said the city's legal department can hold up a permit if the company owning the project site is in litigation with the city, but that was not the case with Summit Inc. NWI Times