Posted by & filed under News.

By Mark Jaffe
The Denver Post

Build it and they will come — especially if you have a railroad. That appears to be the Broe Group’s recipe for industrial development and, coincidentally, for running a railroad.

The Denver-based private equity firm, founded and run by Pat Broe, is using its short-line railroad company OmniTRAX to power development in Colorado, and soon in Oklahoma and Texas.

“A manufacturer, heavy manufacturing, needs a really good transportation system,” said Eric Berglund, president of Upstate Colorado Economic Development in Greeley. “Railroads are a lure, and you can’t put in a railroad where a railroad wasn’t.”

In the last six months, OmniTRAX has acquired short-lines in Oklahoma and Texas, bringing its holdings to 19 railroads in 10 states and Canada.

That makes OmniTRAX the third-largest short-line holding company in the U.S., behind publicly traded Genesee & Wyoming Inc., based in Connecticut, and privately held Watco Companies, in Kansas.

Still, all those OmniTRAX railroads only add up to about 2,200 miles of track — with the shortest just five miles long and the longest 627 miles.

The longest line, the Hudson Bay Railway Co., carries grain from farms across Canada to Port Churchill, Manitoba, the OmniTRAX ship terminal on Hudson Bay.

The short-lines connect factories, grain elevators and warehouses with major railroads, such as Union Pacific.

“We are moving goods the first mile and the last mile,” said OmniTRAX CEO Kevin Shuba.

In Colorado, OmniTRAX’s Great Western Railway carries products — from wind turbine blades to beer bottles — from its Great Western Industrial Park in Windsor

Transloading in Fort Collins

From a new terminal outside of Chicago, OmniTRAX’s Illinois Railway hauls sand to be used by the oil and gas industry in the process of hydrofracturing, or fracking.

In its newest venture, OmniTRAX will run the Brownsville & Rio Grande International Railroad and develop an industrial park with the Port of Brownsville in Texas.

“We are looking to create growth opportunities — whether it is on the rails or in an industrial park,” said Richard Montgomery, OmniTRAX vice president for industrial development.

Big holding companies

The short-line industry was created in the late 1970s as major carriers went through consolidation and sold off or leased their short-haul rail.

There are more than 500 short-line railroads in the U.S., and at least half are owned by big holding companies, according to Jeff Stagl, managing editor of the newsletter Progressive Railroading.

“It has been a pretty stable business,” Stagl said. “But the consolidation has been going on for quite a while.”

This year, short-line traffic is up about 2 percent over last year, buoyed by growing shipments of oil, sand and grain, Stagle said.

For Broe, the rail lines and industrial real estate development have gone hand in hand, OmniTRAX’s Montgomery said.

The company began industrial development in Windsor in 2003 with 100 acres for an Owens Illinois glass factory producing bottles for Colorado beer-makers.

Two years later, Broe acquired another thousand acres, Montgomery said. The park now includes a Vestas Wind Systems blade factory, a Kodak Alaris plant and Front Range Energy, which turns grain into ethanol.

In the past few years, the park has attracted companies in the Front Range oil and gas boom, including Halliburton Co.’s $20 million fracking sand terminal and Musket Corp. terminal to ship oil out of Colorado.

In September, Schlumberger Ltd., the world’s largest oil field services company, announced it was building a $20 million facility in the park.

Along the 80 miles of Great Western track, locomotives haul in sand, grain and steel, and they carry out turbine blades, glass bottles and crude oil to connections with the Union Pacific and BNSF railroads.

“The park has been a big economic boost for this region and a big employer,” Upstate Colorado’s Berglund said.

OmniTRAX is hoping to duplicate its Colorado success in Oklahoma and Texas.

In June, OmniTRAX acquired for an undisclosed sum the Sand Springs Railway, which operates on 32 miles of track between Sand Springs and Tulsa, Okla.

“This is also an area that is seeing a lot of energy development,” OmniTRAX’s Shuba said.

Benefited from a synergy

In the energy business, OmniTRAX has benefited from a synergy with another Broe Group company, Great Western Oil and Gas Co., Shuba said.

OmniTRAX also won a 30-year franchise in June to run the 45-mile Brownsville Navigation District and develop a 1,200-acre industrial park there.

“We talked to OmniTRAX for more than a year before we decided,” said Eduardo Campriano, CEO and director of the Port of Brownsville.

“In the end, we thought it was a good fit,” he said. “They are in the land development business, and we have a lot of land. They are in energy business, which is big here. They have a port.”

OmniTRAX is banking on new-energy development, just over the border, as a result of reforms to the Mexican oil and gas industry, Shuba said.

As part of the agreement, OmniTRAX will spend $8.5 million on common infrastructure for the new 1,200-acre industrial park, Campriano said.

The first project will be a business incubator on a 227-acre site that will offer loading docks, tracks and scales for startup companies, OmniTRAX’s Montgomery said.

“This infrastructure is expensive,” he said. “But by designing it as shared services, it will cut the costs.”

One of the things that made OmniTRAX attractive was the marketing experience of the company and the Broe Group’s ability to bring in new business, Campriano said.

When it comes to business, private railroads have “traditionally waited for the phone to ring,” Montgomery said. “Our company is proactive, and we are always looking for growth.”

Posted by & filed under News, Real Estate Deals.

 

New operation will bring needed jobs to Northern Colorado

WINDSOR, COLORADO – Global energy and industrial powerhouse Schlumberger is investing $20 million to construct a new facility for its artificial lift solution business on 18 acres at the Great Western Industrial Park www.greatwesternindustrialpark.com an affiliate of The Broe Group www.broe.com. Located about 60 miles north of Denver, the new 14,800-square-foot operation will distribute tools and machinery to help capture oil and gas from under-pressured or depleted reservoirs.

Construction is scheduled to begin this month, with completion set for the spring of 2015 and the commencement of operations by next summer. Schlumberger expects to create more than 30 new jobs at the new location in the next three years.

“The Town is pleased to welcome such a renowned company like Schlumberger Lift Solutions to Windsor,” said Kelly Arnold, Town Manager. “We look forward to continuing to work with them in their new location in the Great Western Industrial Park.”

The new facility originates from Shores Lift Solutions, an artificial lift manufacturer Schlumberger acquired in August 2013. The company produces rod pumps, gas lifts, plunger lifts, ESP’s (electrical submersible pumps), and jet pumps , which are used in the oil field to support production.

“Schlumberger brings international energy development attention to the region and the Great Western Industrial Park, where they are joining other oil and gas industry leaders like Halliburton and Musket Corporation. The company is making a significant investment in our community and creating new jobs for skilled workers in the area,” said Rich Montgomery, senior vice president of industrial development at Great Western Industrial Park.

Schlumberger has offices and facilities throughout Colorado and globally, many servicing the oil and gas industry.

“The people of Weld County truly appreciate the efforts of the Great Western Industrial Park in attracting great companies like Schlumberger to the region. The development has become a juggernaut for our region and we are committed to supporting it,” said William Garcia, Weld County Commissioner at-Large.

About Great Western Industrial Park and The Broe Group
The Broe Group, headquartered in Denver, Colorado, provides management services to a group of affiliated companies, including the Great Western Development Company, that have 40 years of international investment, acquisition and operation experience.

The Great Western Development Company develops railroad property along lines managed by OmniTRAX, Inc., one of the largest privately held rail service company in North America and an owner and operator of the Great Western Railway of Colorado. Starting in 1986 with the acquisition of the Great Western Railway of Colorado, OmniTRAX (also a Broe Group affiliate), has steadily extended both its network of rail properties and the volume of business on each of its owned and managed properties, adding seventeen railroads, ports and intermodal terminals since inception.  More information can be found atwww.greatwesternindustrialpark.com .

About Schlumberger
Schlumberger is the world’s leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide. Employing 123,000 people representing over 140 nationalities and working in more than 85 countries, Schlumberger provides the industry’s widest range of products and services from exploration through production. Schlumberger Limited has principal offices in Paris, Houston and The Hague, and reported revenues from continuing operations of $45.27 billion in 2013. For more information, visit www.slb.com.

Posted by & filed under Acquisitions, News.

 

Move gives OmniTRAX first venture in Oklahoma

OmniTRAX Logistics Services leases transload facility to support growth

 

DENVER – Sand Springs Railway Company is being acquired by Sand Springs Holdings, LLC, a managed affiliate of OmniTRAX, Inc., one of the largest privately held rail service companies in North America.  The Sand Springs Railway, which runs freight service between Sand Springs and Tulsa, OK on 32 miles of track, will commence operations no later than July 31, 2014. Terms were not disclosed.

 

The Sand Springs Railway has direct connections with Union Pacific, BNSF and South Kansas Oklahoma Railroad. Traffic handled includes steel, pulpboard, scrap iron, scrap paper, petroleum products, plastics and lumber. Key customers of Sand Springs Railway Company include Yaffe Metals, Baker Petrolite, Webco Industries and Ranger Steel.

 

“We are excited to be in Oklahoma and involved with a market that shows such great potential for growth. The Sand Springs Railway has a great customer base and we are committed to providing the resources to quickly act on new opportunities there,” said Kevin Shuba, CEO of OmniTRAX.

 

As part of the deal, OmniTRAX Logistics Services, the company’s transloading unit, is leasing 100,000 sq. ft. of covered warehouse space with heavy lift equipment to serve steel and building products shippers throughout the greater Tulsa area and wider Oklahoma markets.

 

 

About OmniTRAX

As one of North America’s largest private railroad and transportation management companies, OmniTRAX’s core capabilities range from providing management services to railroad and port services and to intermodal and industrial switching operations. Through its affiliation with The Broe Group and its portfolio of managed companies, OmniTRAX also has the unique capability of offering specialized industrial development and real estate solutions, both on and off the rail network managed by OmniTRAX. More information is available at www.omnitrax.com.

 

About Sand Springs Railway Company

The Sand Springs Railway Company is a class III railroad operating freight rail service between Sand Springs and Tulsa over a 32-mile route. The company hauls steel, pulp, scrap iron, scrap paper, petroleum products, plastic, and lumber. It interchanges with the Union Pacific Railroad, BNSF Railway and the South Kansas and Oklahoma Railroad.

 

 

Posted by & filed under News, Railroads.

OMNITRAX TO MANAGE BROWNSVILLE & RIO GRANDE INTERNATIONAL RAILROAD AND DEVELOP NEW INDUSTRIAL PARK AT PORT OF BROWNSVILLE

June 12, 2014

 

Economic benefits for community include new industries, jobs and community investment

 

DENVER – OmniTRAX, one of the North America’s largest private railroad and transportation management companies, will manage the Brownsville & Rio Grande International Railroad, a short line railway based in Brownsville, TX.  OmniTRAX will also develop a large-scale industrial park on land owned by the Brownsville Navigation District (BND) of Cameron County, the parent governmental body of the Port of Brownsville.

The Brownsville & Rio Grande International Railroad will continue to be led by President & COO Norma Torres, and OmniTRAX expects to retain all personnel. The strategic partnership between the BND and OmniTRAX covers a 30-year period and will deliver significant economic development for the Rio Grande Valley.

“This is a great opportunity for OmniTRAX, the Brownsville & Rio Grande International Railroad and the people of Brownsville to bring in new industries, create new jobs, increase the tax base and boost the local economy. We are honored to be selected for the project by the Brownsville Navigation District and look forward to working with Norma Torres and the team at the railroad, the port and all other parties to reach these goals,” said Kevin Shuba, CEO of OmniTRAX.

The Brownsville & Rio Grande International Railroad runs through 45 miles of the Brownsville Navigation District and five miles into the city of Brownsville itself, providing the port and its customers with access to two Class 1 railroads — Union-Pacific and Burlington Northern Santa Fe. The railroad also has an intermediate connection via Union Pacific to Kansas City Southern De Mexico routes across the Rio Grande.

“The professional rail and industrial development team at OmniTRAX helps us take advantage of our proximity to Mexico and other strategic assets to drive economic growth in the Brownsville region. Their experience and the best practices they use position us for mutual success,” said Ralph Cowen, Chairman of the Board of Canal Commissioners of the Port of Brownsville.

The Port of Brownsville currently has about 40,000 acres of land available for development. OmniTRAX will work with the BND to develop 1,200 acres for a world-class industrial park. The land is well-suited for light and heavy manufacturing, logistics, energy services, technology development and export/import warehousing.

“With recent energy reforms in Mexico, the anticipated development of the Burgos Basin just south of Brownsville and the energy expertise of OmniTRAX affiliate The Broe Group, we expect to take advantage of related opportunities for the Brownsville & Rio Grande International Railroad and the Port of Brownsville,” said Brad Skinner, Chairman of OmniTRAX.

The Broe Group and OmniTRAX have been in Texas for more than 15 years, and have received a warm welcome to Brownsville from many officials, business people, and citizens, including the Port Commissioners, Brownsville & Rio Grande International Railroad officials, Mayor Tony Martinez, the Brownsville Economic Development Council, Brownsville Public Utilities Board and U.S. Rep. Filemon Vela, among others.

“I would like to congratulate the Port of Brownsville and The Broe Group for entering into this significant agreement,” said Congressman Vela, who represents the 34th District of Texas, which includes Brownsville. “The Port Commission’s decision to partner with the Broe Group to spur economic development in our region has my full support.  The Broe Group and OmniTRAX have been operating in Texas for more than 15 years and I join our community in welcoming them to Brownsville. I am sure that their presence and insight will be beneficial to our region.”

Note to Editors: Photos of the Brownsville & Rio Grande International Railroad and the Port of Brownsville are available.

About OmniTRAX

As one of North America’s largest private railroad and transportation management companies, OmniTRAX’s core capabilities range from providing management services to railroad and port services and to intermodal and industrial switching operations. Through its affiliation with The Broe Group and its portfolio of managed companies, OmniTRAX also has the unique capability of offering specialized industrial development and real estate solutions, both on and off the rail network managed by OmniTRAX. More information is available at www.omnitrax.com.

About Brownsville & Rio Grande International Railroad

The Brownsville & Rio Grande International Railroad (the “Railroad”) is a short line railroad, organized for the purpose of providing exclusive common carrier rail transportation to all facilities located within the Brownsville Navigation District of Cameron County, Texas. The Railroad is operating and will continue to be operated on behalf of the Brownsville Navigation District, but under separate management and control from the District. All traffic is being interchanged with the Union Pacific Railroad Company at its Olmito yard. Interchange with the Mexican Railroad carrier KCSM is done via an intermediate switch with UP at the Brownsville & International Matamoros Bridge. More information is available at http://brgrr.com/.

About Port of Brownsville

The Port of Brownsville is the only deepwater port located on the U.S. and Mexico border, providing a full range of services to ensure efficient and timely cargo delivery worldwide. With abundant land for development and seventeen miles of waterfront access, the Port of Brownsville offers easy access to non-congested international bridge crossings and rail connections. More information about the Port of Brownsville is available at www.portofbrownsville.com.

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