BNSF, City Strike Deal On SF Rail Yard Land

Jul 22, 2015

A railroad company and the City of Sioux Falls have struck a multi-million dollar deal for land in the central part of the city. Burlington-Northern agrees to sell much of the rail yard in downtown Sioux Falls for more than $27 million.

“It’s bigger than the events center, folks,” Mayor Mike Huether says. “This is."

Sioux Falls Mayor Mike Huether says an agreement to buy more than 10 acres of rail land in the center of town is a major move for the community. Huether says some people thought leaders would never negotiate to buy the rail yard even with federal funding.

“One of the things that we heard time and time and time again is that there is no way, absolutely no way, that you will live within the confines of the $40 million mark. We did,” Huether says.

Federal officials originally allocated $40 million. The full amount has lessened over the years, and city leaders have spent some of it on environmental studies and land assessment. Project officials say after the $27 million sale about $7 million remains for additional work on the property.

The City is buying the land as-is, which means local government is responsible for the quality of the property. Project manager Josh Peterson says the soil contains some petroleum and lead.

“We did I think over 20 soil borings on the site where we drilled and took samples through various layers, and we went from the surface all the way to the bedrock there, so we tested everything as far as soil on the site,” Peterson says. “And for a rail operation that’s been in service for 125 years, it was surprising how little contamination there was on the site.”

Peterson says BNSF has two years to leave the property before the city can remove tracks, the railroad crossing over a street, and a warehouse. In the deal the city agrees to build a security fence to separate the land from the two lines of rail that remain active in Downtown.

If the city council and the mayor approve the agreement, new development could begin in 2018 once private investors purchase the land.

The deal between the City of Sioux Falls and BNSF goes in front of the City Council at the beginning of August.