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Merced County awarded nearly $50 million for Castle Rail District

The California State Transportation Agency (CalSTA) announced Thursday that Merced County was successful in its bid for a $49.6 million grant to build-out an inland port at Castle Commerce Center, leveraging its unique capacity to move freight worldwide.

The grant — one of the largest in the history of Merced County and San Joaquin Valley — will help the state develop a more efficient, sustainable and resilient goods movement system. In January 2022, Governor Gavin Newsom proposed $1.2 billion for port and freight infrastructure to support the state’s goods movement networks, which have been impacted by global disruptions and increased port congestion in recent years.

“I would like to take this opportunity to thank the Governor, our state legislative partners and the California State Transportation Agency for this significant investment in Merced County,” said Board Chairman Scott Silveira. “This will directly support our agricultural producers and manufacturers throughout the entire San Joaquin Valley.”

The $49.6 million CalSTA grant will enhance Castle Commerce Center’s existing rail capacity by:

• Facilitating the development of 70 acres at Castle to support pre-shipment processing and intermodal cross-docking for Central Valley agricultural producers;

• Providing cost-effective, direct rail service for shippers;

• Expanding the railway to a new staging and container laydown area to support cross-docking and processing; and,

• Evaluating, engineering, and planning for further expansion on existing land within Castle Commerce Center.

These projects will support additional goods movement to and from the Port of Los Angeles, the Port of Long Beach, and the Port of Oakland while making Merced County a focal point for inland goods movement.

Situated at the south-eastern corner of Castle, its rail district became operational in May 2022 under Patriot Rail, which operates the rail line and has already tripled the shipping volume to and from Castle in recent months. The CalSTA grant will further enhance the viability of agricultural producers, manufacturers, and other enterprises throughout the San Joaquin Valley to cost-effectively and efficiently ship and receive goods along the BNSF railroad mainline, which runs adjacent to the site. Castle’s inland port and rail activities is focused on increasing regional economic opportunities while reducing semi-truck traffic along our roadways.

Supervisor Daron McDaniel, whose District 3 includes Castle Commerce Center, said the inland port and rail district has been in the works for many years and is a major focal point for the County.

“This is a prime example of government facilitating an environment where the private sector can thrive,” McDaniel said. “I would like to give a big thank you to our staff who worked on this grant application, to our countless regional partners for their support and CalSTA for recognizing that Castle has the capacity that few others have. Great things are happening in Merced County.”

Castle Commerce Center has enjoyed monumental gains in technology advancement, logistics and privatizations, all key priorities of the Board of Supervisors. “I’m very proud of Castle’s transformation,” said Mark Hendrickson, Assistant County Executive Officer. “With all that has been accomplished to date and coupled with this sizable state investment, Castle is proving to be the leading economic development site in California.”

Board Chairman Scott Silveira further commented that the rail district benefits all of Merced County, as well as the surrounding region.

“This is a win for the entire region,” Silveira said. “From local agricultural producers to major manufacturers throughout the Valley, being able to transport goods in a quick and efficient manner is absolutely critical. This grant will position us to drive our economy in the right direction.”

The rail district expansion project is expected to be complete by mid-2028.

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