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County leaders celebrate massive investment for Castle


By John Miller & Jonathan Whitaker

Merced County leaders and state representatives gathered at the Castle Commerce Center on Tuesday to officially announce receipt of a $49.6 million grant to build out an on-site “inland port” and enhance a growing local rail district that aims to move freight across the state and throughout the world.

The grant — the largest of its kind ever received in this region — was awarded earlier this month by the California State Transportation Agency (CalSTA). The funding is part of the Central Valley slice of a $1.2 billion plan by Governor Gavin Newsom to improve freight infrastructure, support goods movement, relieve congestion at the state’s main seaports, and reduce pollution.

“This is a significant investment in Merced County that will directly support our agricultural producers and our manufacturers throughout the San Joaquin Valley,” said Daron McDaniel, the Merced County supervisor who represents the Castle area along with the city of Atwater. “This is definitely a regional investment. It will also aid in the statewide goods movement while easing semi-truck traffic on our roads, especially Highway 99.”

McDaniel said the grant will facilitate the development of 70 acres at Castle to support pre-shipment processing, intermodal cross-docking for transported goods, and a cost-effective direct rail for shippers, including Central Valley agricultural producers.

“This is a prime example of government facilitating an environment where the private sector can thrive,” he said. “I would like to give a big thank you to our staff who worked on this grant application, to our countless local and regional partners for their support, Patriot Rail, and CalSTA and the Governor’s Office for recognizing that Castle has the capacity that few others have. We have air, we have rail, we have truck. We can do everything here, and I’m glad that we recognized it. Great things are happening here right now in literally my backyard.”

Situated at the south-eastern corner of Castle, the rail district became operational in May 2022 under Patriot Rail, which operates the rail line. It’s considered to be one of two cornerstone projects at Castle, along with the Autonomous Vehicle Testing Center.

Specifically, officials say $30.2 million of the big state grant will go to the development of 70 acres at Castle in terms of supporting “pre-shipment procession and intermodal cross-docking.” Another $18.3 million is targeted for “rail expansion to a new staging and container laydown area” that would include rail freight and air cargo. The remaining $1.1 million would go toward “evaluation, engineering and planning for further expansion on existing land inside the Castle Commerce Center.”

The regional benefits that have been touted include the creation of “hundreds” of local and regional jobs, as well as cleaner air due to placing more freight on rail and reducing roadway emissions, and a stronger relationship with the nation’s busiest seaport — the Port of Los Angeles.

Pre-construction activities are expected to begin in August. Next year, plans include construction to connect the transload area to the airport via new rail lines. This will allow for air cargo to unload directly to rail cars. There will also be construction on the 70-acre transmodal site which consists of underground infrastructure, asphalt, and new rail lines, creating a “shovel-ready” rail park to allow private developers to construct four transload facilities.

The first phase of the project is anticipated to be completed in 2028, and county officials have alluded to the idea that Atwater-Merced Expressway — a roadway plan that connects Highway 99 to Castle — could be completed by then as well.

“I’ve never been so excited about a project in my career,” said John Fenton, the CEO of Patriot Rail, during the check presentation. “This really is a transformational project. I’ve worked in logistics my whole career and when you think about the jobs, the air quality issues, you think about what it’s going to mean for the shippers in this community to be able to get their goods and services to market at a lower price.

“Everybody wins with this project — it’s rare that you see across the board something that will have this order of magnitude improvement in a community or state. We’ve talked a lot about the state, but this is also good for the country. So I’m excited and privileged to be a part of this, and one of the comments I would like to make, is that when we started this endeavor and spoke with the leadership team here about two years ago, I think about how far we’ve come. And most importantly, I think about how we got here, which is a great example of how public-private partnerships should work. We really rolled up our sleeves. They used our expertise and we used their expertise. I think the biggest challenge you always have is how to work with each other, and I think that we learned a lot about how to work with each other in a very effective way and I couldn’t be more proud to be a part of this.”

Regarding the regional impact of the growing Castle Rail District, Fenton added: “Quite frankly, there’s really no other place left to grow. Modesto is full, Stockton is full, Sacramento is full. This is the next big hub and we got a lot of great ideas jointly on how we take this to a level that quite frankly, I’m not sure everyone quite comprehends yet what this can be. So think big.”

Julie Herd, the regional business development specialist form the Governor’s Office of Business and Economic Development, pointed out that Castle was the only inland port of its kind in the state to be funded.

“That speaks to the community’s preparedness and the fact that you are ready to go, and all of the hard work that has been done behind the scenes,” Herd told those gathered. “This project aligns with our goals to invest in industries that are essential to our economy such as agriculture and manufacturing. As others have said this is going to create great jobs for the community and regions, and increase our economic competitiveness. So we look forward to watching Castle’s success.”

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