SC board approves settlement over rail yard

COLUMBIA, S.C. (AP) -- A settlement approved Wednesday ends a years-old dispute with the city of North Charleston and paves the way for rail access to the Port of Charleston, giving the state a boost in the competition for megaships' business.

The five-member Budget and Control Board voted unanimously to accept the settlement between the Commerce Department and North Charleston, a day after the city's council approved it.

Commerce Secretary Bobby Hitt said the settlement represents the start of building an intermodal rail yard that's critical to the port's expansion and attracting companies to the state.

"This puts us on the road to being a major player," he told the board.

The rail yard will provide two rail carriers, CSX and Norfolk Southern, equal access to the port and is a selling point for international companies, Hitt said. The settlement, combined with the harbor deepening project and new port terminal, signals to them that the state will be ready for megaships after the Panama Canal is widened in 2014, he said.

"This is a huge recruitment tool for me," said Gov. Nikki Haley, chairwoman of the financial oversight board.

The rail yard should also relieve congestion along Interstate 26, as each train can displace 280 tractor-trailers daily. The two combined could take 560 trucks off the road daily, Hitt said.

Companies benefit from the ability to move products to and from the port by rail faster, cheaper and with less damage than with trucks, he said. "Rail is vitally important" to improving the state's economy.

The deal involves several land transfers, with the agency's rail division paying the city $8 million over four years. None of that money will come from state coffers, Hitt said.

The state will end up with about 280 acres of the former Charleston Naval Base, roughly 100 of them for the rail park. The city will get more than 50 acres closest to the waterfront, which it intends to use for recreation and residential development. That property includes former officer housing, and plans include preserving some of the buildings.

The settlement resolves all lawsuits involving Commerce, its rail division, the State Ports Authority, and the state.

It calls for minimizing the rail lines' impact on surrounding neighborhoods, which drove the city's dispute. That includes the removal of some rail and the creation of quiet zones to reduce train horns.

"Anyone driving along North Charleston's major thoroughfares has at some point been stuck in gridlock traffic or stopped by a train, unfortunately all too often," Mayor Keith Summey said. "This fight has been over rail, but I believe that the city has really objected to the human impact of rail more than to rail itself."

Construction of the rail yard will likely cost about $120 million, paid for with federal loans, bonds and reserves in the agency's rail division, Hitt said. He expects the permitting process to take 20 months and construction a couple of years.