Full steam ahead after Buffett purchase

While Warren Buffett’s $34 billion acquisition of Burlington Northern Santa Fe Railroad caught everyone by surprise it is business as usual for the officials working on the planned BNSF Intermodal and Logistics Park in Edgerton and for the National Academy of Railroad Sciences at Johnson County Community College.

According to BNSF spokesman Steve Forsburg, general director of public affairs, Buffet’s takeover is good for the railroad and will not affect the planned intermodal.

“The proposed change in the ownership of the company has no effect on the projects in development such as the intermodal facility in Edgerton,” he said. “In fact, we don’t expect it to have any impact even on our day-to-day railroad operations.”

The high-profile acquisition will likely not have much direct impact on NARS either, said Bill Brown, dean of JCCC’s technology division. NARS is a collaborative partnership between JCCC, College Boulevard and Quivira Road, and BNSF.

Enrollment numbers in NARS courses are down this year at the college, reflecting the negative effects the economy has had on the railroad industry. The program usually sees 800 conductors in a semester. This year there are about 100 fewer students in that program, Brown said. Potential students were aware of a slowdown in train traffic, he said.

“We’re not going to pack our classes with students and then not have employment opportunities when they are completed,” Brown said.

A completed intermodal project could have more impact on the program than the Buffett acquisition, he said.

“That might help in terms of being able to train students and keep them locally,” Brown said.

The intermodal and logistics park is one of the largest economic projects to be developed in Kansas in the past 30 to 40 years, according to the Kansas Department of Transportation. It is projected to create 13,000 jobs over a 20-year period, the bulk being generated through newly constructed distribution centers and related economic development attracted to the facility.

The 700-plus acres east of Gardner were to be annexed by Gardner. But when the current City Council voted to rescind all agreements with BNSF and The Allen Group, the company selected to develop the logistic park, BNSF officials began working with the Edgerton City Council.

Edgerton City Administrator David Dillner said the city has three agreements with BNSF: the project agreement; the finance plan; and the annexation agreement, which has been approved by the City Council.

“Right now we’re doing some administrative work to complete some conditions that were in the agreements, and once those are met we will execute the agreements and then wait patiently to determine the federal government’s decision on the TIGER (Transportation Investment Generating Economic Recovery) Grant and the 404 permit,” Dillner said. “We have to get a piece of property between us and the intermodal facility site. That property currently is owned by the Johnson County Park and Recreation District; it’s a very small piece of property and (the park board) will be considering that Nov. 18.

“If they were to consent to that annexation, theoretically, we could do the annexation proceedings on Nov. 25.”

Dillner said Buffett’s announcement was a complete surprise but said he was not concerned it would affect plans for the intermodal.

“One of Warren Buffett’s investment strategies is to buy good operating companies with long-term prospects,” he said. “And when he buys a company with Berkshire Hathaway (Buffett’s company), what he typically does is he leaves in the operating management because his philosophy is that the management knows what they are doing and that they have done a pretty good job.

“So when I heard Buffett was taking over the company, I knew that, number one, BNSF wouldn’t be changing all that much; Berkshire Hathaway would own them but the operations wouldn’t change at all.”

Forsburg said he is expecting a decision soon from the Army Corps of Engineers on the 404 permit, which is needed because a small tributary that feeds into Bull Creek will have to be redirected when construction of the intermodal begins.

Decision on the TIGER Grant is expected by the U.S. Department of Transportation by the end of December or early January.

“The construction time frame is estimated between 18 months to two years depending on when construction begins and the (severity) of the winter weather,” Forsburg said.

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