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Great Falls Malt plant delayed – Railroad line needs special permit

A railroad line crucial to International Malting Co.’s new Great Falls plant has hit a legal snag that could delay the line’s construction several months, state officials said this week.

By MIKE DENNISON
Tribune Capitol Bureau

http://www.greatfallstribune.com/news/stories/20040902/localnews/1162374.html

The 4.5-mile line, to be financed and owned by the Great Falls Development Authority, must cross a sliver of land protected by a state-held conservation easement.

But it won’t happen unless the authority trades to the state a piece of land of equal value — and that trade must go through a lengthy state review and approval process.

"At a minimum, we think it would take three months from the date they would propose the (trade)," said Becky Dockter, an attorney for the Department of Fish, Wildlife & Parks.

The development authority has not yet identified which land it may be considering for the trade.

Backers of the $60 million malt-producing plant said the project will continue as planned and that this new wrinkle should cause no major problems.

"This is a big hurdle, but this is not an unsolvable problem," said David Gibson, the state’s top economic development officer. "It is not going to stop this thing from getting done."

But plant backers are concerned it could delay construction of the rail spur into next year, possibly affecting plans for the plant’s opening.

John Kramer, president of the Great Falls Development Authority, said Tuesday he’d hoped to get the railroad line built by winter so IMC could start shipping grain to the plant by early next year.

"We are coming on to winter, and if we don’t start soon, we might not be able to finish it by the time our (grain) producers need to have it done," he said. "We’re going to ask Fish, Wildlife & Parks, within the law, to get it done as fast as possible, for all of Montana."

Grain could be trucked into the plant initially, but a railroad is needed to handle the volume of barley coming into the plant — as well as the malt product that must be shipped out, officials have said.

The plant is expected to buy 12 million bushels of barley a year and employ 35 people.

The rail line also is part of plans for an "ag business park" in the area, meant to serve other potential manufacturing plants.

Dockter said the state can act quickly on a proposed land trade, but can’t do much until it sees a proposal from the Great Falls Development Authority.

Once that proposal is made, a number of steps must be followed, she said.

The department must conduct an environmental review of the proposed land trade, public comment must be solicited, and the Fish, Wildlife & Parks Commission must decide whether to approve it, she said.

It’s also possible the state Land Board will have to approve the trade, if it involves disposal of state property, Dockter said.

Gibson said his office and the governor’s office will do what it can to make the process go smoothly and quickly, but that it will take at least a couple of months.

"With the (high) profile of this project, there can’t be any short cuts," he said.

The project, which has a $33 million loan from the state, already has seen plenty of public scrutiny.

Organized labor has criticized International Malting for not hiring union labor or enough Montana workers during construction of the plant.

Labor and others also said the state gave the company a sweetheart deal when agreeing to lease water from Giant Springs for use in the malt production.

State officials said the deal was proper; unions have filed suit to overturn the lease.

Kramer said the problem with the railroad surfaced last month, when attorneys for the development authority discovered the line, north of Rainbow Dam, must cross a section of land protected by a conservation easement north of town.

The land is owned by PPL Montana but the state holds the easement, which says the land must remain as open space.

The 2,400-acre easement was arranged in the late 1990s by Montana Power Co. and the Conservation Fund, which wanted to ensure public access and protect the riverfront from development on the north side of the Missouri downstream from Great Falls.

Less than a quarter-mile of track crosses the land protected by the easement, Kramer said.

State law says open-space land protected by an easement can be developed only if nearby property "of at least equal fair market value" is substituted for the land that will be developed.

Kramer said the authority is hoping to acquire some acreage nearby that can be traded to the state, to enhance the wildlife qualities of the property.

The railroad would serve IMC’s malt plant, but it also is meant to encourage other food-processing development at the site north of Great Falls.

The railroad would be owned by the development authority, which is trying to secure $5 million in financing for its construction, Kramer said.

Chris Kaltenbach, general counsel for IMC’s parent company, LeSaffre International, said the company doesn’t know yet how this latest wrinkle might affect plans to open the plan, although construction continues.

But he emphasized that the rail line is the responsibility of the Great Falls Development Authority.

"The malting plant does require and expect a rail spur (to serve the plant)," he said this week. "But this rail spur is not going to serve just us, by any means."

Dennison can be reached by e-mail at [email protected], or by phone at (406) 442-9493.

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