Birmingham Business Journal – by Lauren B. Cooper Staff
Friday, February 19, 2010
A Berkshire Hathaway-owned railroad has purchased a former pet food manufacturing facility in Birmingham and is sizing up the facility for future expansion.
Burlington Northern Santa Fe Railway purchased the nearly 32-acre Mars Petcare facility on 16th Street North, adjacent to its Birmingham intermodal facility, for $3 million.
Plans for the nearly 157,000-square-foot facility are not finalized, a company spokesman said, but the purchase came about from an increase of requests from businesses looking for opportunity to be rail served.
“The idea is for us to better serve our existing and potential customers,” said spokesman Joe Faust.
BNSF operates an intermodal facility off Finley Boulevard, between Interstate 65 and Highway 78. According to the company, Birmingham is the starting point for its 32,000-mile network into the Western U.S.
The seller, Mars Petcare, announced the closure of its local manufacturing facility, along with others in Iowa, Tennessee and Missouri, in late 2008, according to media reports. Austin Blair, a broker with LAH Commercial Real Estate in Birmingham, represented Mars in the sale of the property, but he said he was unable to comment on the transaction.
A considerable amount of railroad activity has taken place lately in the Birmingham market, beefing up freight capacity in the industry.
Last year, Norfolk Southern announced plans to build a $112 million intermodal facility in McCalla, adjacent to Jefferson Metropolitan Park. It will be built on an existing Norfolk Southern line and transfer containers and trailers between trucks and trains. The railroad recently purchased the last piece of land for the new development and plans to start construction soon.
The Federal Railroad Administration announced this week at the Jefferson County Courthouse that Norfolk Southern would receive $105 million in stimulus money for the intermodal facilities in Birmingham and Memphis, Tenn., a combined $224 million improvement to its Crescent Corridor.
And CSX Transportation Inc. recently opened a $6 million railroad hub in Bessemer’s Interstate Industrial Park. Its primary customer is the Mercedes-Benz plant in Vance.
Having these three Class A railroads operating out of the area, in addition to the intermodal facilities, has put Birmingham on a lot of companies’ radars, said Patrick Murphy, senior vice president of economic development for the Birmingham Business Alliance.
Combined with direct routes to major Interstates and ports, “you have a natural advantage of transportation infrastructure not found in many communities,” he said.
A lot of the current activity in the local industrial market has been railroad related, said Ogden Deaton, a broker with Graham & Co. And with gas prices rising and rail companies touting their services as “green,” more business will look to rail as a good alternative for shipping goods.
“Any infrastructure we can get that opens up the lanes of industry is good,” he said.
BNSF said that, in 2008, the majority of what it shipped from Alabama was industrial products, while the majority of products shipped into the state was coal. Overall, it moves nearly 356,000 carloads of freight in the state each year.
BNSF employs about 270 in the state, with a combined payroll of nearly $17 million.
Earlier this month, Warren Buffet’s Berkshire Hathaway finalized a $34 billion deal to purchase the Texas-based BNSF – Berkshire Hathaway’s biggest acquisition ever and a “bet” on Buffett’s hopes for the railroad industry being a leader in the economy.
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