What is the real motivation behind the Brookhaven Rail Terminal?
We are led to believe that the terminal will reduce truck traffic and therefore has environmental benefit. The claimed purpose is to transport aggregate for two asphalt plants–one in East Setauket and the other in Deer Park. But analysis suggests that it will likely have just the opposite effect, perhaps increasing truck traffic on local roads 7.7 times (see http://brookhavensouthhaven.blogspot.com/2012/09/more-getting-railroaded.html and http://brookhavensouthhaven.blogspot.com/2012/09/us-rail-and-strange-story-of-railroad.html.)
As a business model, making sense of the BRT is hard to figure out. Why is all this money being invested in a rail terminal way out east? Where are the investors expecting to make money? And why are some 200+ additional acres needed by the developing companies?
I would like to suggest that the money to be made is not in what is being transported onto Long Island, but what could be transported off the island.
SAND. And we all know we have plenty of that.
The site has been placed under the jurisdiction of the Federal Surface Transportation Board, removing it from local control. They are claiming that they are building an intermodal rail terminal. “Site preparation” (they would probably not call it mining) has already required the removal of large quantities of sand. They are purchasing from the county an additional 231 acres for $20 million.
What are the economics of SAND?
An internet search reveals that the average PROFIT on mining sand is about $25/ton (at the rail head). I assume “profit” is after all the costs of production, including land purchases. BRT “site preparation,” requiring the removal 10 feet of sand on 200 acres, yields a profit of $81,675,000. If they go 20 feet deep, the profit is $163,350,000. Now this is a back of an envelope calculation, and I admittedly know nothing about the economics of sand mining. But I suspect a smoke screen has been put up, designed to direct our attention away from their real motivations.
The County appears to have been bamboozled into selling 231 acres for only $20 million. And note, the resolution of sale, gives to the buyer “All mineral and/or air rights to the premises.” (Article I., Section 1-1, Paragraph C. http://brookhavensouthhaven.org/blog/land%20sale%20agreement.pdf). I do not find any covenants that would restrict removal of sand (how could there be–it’s just “site preparation”).
1 acre = 43,560 sq. ft.
1 cu ft sand = 75-100 lbs
1 acre-ft sand = 3,267,000 lbs or 16,335 tons
Average profit in sand mining = ~$25/ton
1 acre-ft sand yields a profit = ~$408,375
200 acres, 1 ft. deep yields profit of $8,167,500
200 acres, 10 ft. deep yields profit of $81,675,000
200 acres, 20 ft. deep yields profit of $163,350,000.