City-owned Frederickson site could bring revenue for Tacoma Rail

The City of Tacoma is considering a proposal to lease approximately 2.4 acres of land it owns in Frederickson to a company that plans to use the site to build a facility to transfer ethanol and other liquid commodities from trains to trucks.

If approved by Tacoma City Council, KAG Logistics, Inc. would enter into a five-year lease with the City and Tacoma Rail, and spend $800,000 to install the infrastructure needed for the translating facility, such as tracks, switches, water and electrical service, paving, and fencing, according to documents prepared by City staff. KAG Logistics would pay $24,000 per year to lease the site, and $400 for each railcar that moves through the facility. Tacoma Rail officials report the facility will serve 40 to 60 railcars per month. However, the base rent would be waived if KAG Logistics transports a minimum of 20 railcars per month, which would generate $96,000 annually for Tacoma Rail. Improvements made to the site would become the property of Tacoma at the end of the lease. KAG Logistics would also have the opportunity to renew its lease in three five-year extensions.

The site is located along Canyon Road East, just south of Frederickson Industrial Park Road East, in an area known as the Canyon Road “Y.” Tacoma purchased the land from Weyerhaeuser in 1995.

Tacoma City Council is scheduled to vote on a resolution authorizing the agreement during its meeting on Tues., July 17 at 5 p.m. in City Council Chambers on the first floor of the Tacoma Municipal Building, located 747 Market Street. Meetings are streamed live online here and broadcast live on TV Tacoma.