News

Paterson Grain request to build an elevator site

By Scott Wagar

02/03/2015

A company out of Winnipeg has requested to construct a grain handling facility south of Bottineau but has found difficulty with the city’s planning commission over a roadway; however, the Canadian company is looking to the city council to see if the two entities can come to an agreement.  

During a Planning Commission meeting on Jan. 26, the commissioners voted down a plan by Paterson Grain LLC (PGL) out of Winnipeg to construct a grain handling facility in Bottineau due to the truck route the company placed in its plan. 

“Paterson submitted a proposal to the Bottineau City Planning Commission to construct a 1,370,000 bushel capacity grain handling facility on the land south of Johnson Sport Center in Bottineau. This facility, if built, would represent the first move by Paterson into the U.S. market in its 107 year history,” said Shane Paterson, corporate development officer of Paterson Grain LLC, in a post meeting e-mail to the Courant. 

“Paterson intended that the facility be used to receive both Canadian and U.S. grains and oilseeds utilizing two 630,700 bushel steel bins, and ten 10,970  bushel steel bins; with the ability to expand in the future if warranted. The planned facility would operate from 8 a.m. until 5 p.m., five days per week, with occasional evening and weekend operation.  Paterson was of the belief that it would be able to accommodate 25 to 30 tri-axle truckloads of grains or oilseeds per day and was hopeful that both Canadian and American producers would be interested in filling this demand,” he continued.

“Along with an increased tax base, a project of this size would generate local employment opportunities for approximately 30 contract positions during the peak construction phase, and approximately eight to 12 full time positions once operational. In addition, financing and construction materials for  the  project would  be sourced from Bottineau and the state of North Dakota, resulting in increased prosperity for local banks, lumber yards, hardware stores, equipment rental outfits and aggregate suppliers,” Paterson said. 

“Further, as many members of the community are aware, Bottineau is located on a Burlington Northern Santa Fe (BNSF) spur line which is nearing the end of its operational life cycle.

Without improvements, the future of this spur line is uncertain. However, Paterson has a long­ term relationship with BNSF and had plans to work with BNSF to improve rail infrastructure and rail service to the community; with the goal of ensuring that this spur line remains in operation for years to come. This, in turn would benefit local farmers and businesses not just in Bottineau but all along this spur line,” he stated.

“Paterson has a dedication to building long-term relationships in the communities in which it operates. Paterson is known throughout Canada as a good corporate citizen who makes meaningful contributions, both philanthropic and otherwise, to the communities in which it carries on business,” Paterson said.

“Paterson intended to continue this tradition in Bottineau through involvement with the local arena, college and hospital; in addition to being a strong supporter of community events and trade shows.
“Unfortunately, Paterson’s proposal was denied by the Bottineau City Planning Commission in a 4 to 3 vote. Paterson was rather surprised by this outcome as developments of this nature have been welcomed in the communities we have been involved with in the past,” Paterson said. 

“Paterson was informed by the Planning Commission that the proposed facility would not be allowed to proceed unless a road was built either to the east or west of Bottineau, to facilitate access to the site without requiring trucks to travel down Highway 5 or Brander Street. After a comprehensive review, Paterson’s due diligence suggests that employing either alternative would necessitate additional costs to Paterson in the range of $1,000,000 - $2,500,000. Unfortunately, Paterson’s Bottineau project is not feasible with these increased costs.

“As a result, this project is on hold pending further developments,” Paterson said. “Paterson is currently exploring alternatives in other communities.”

According to Diane Lorenz, the city council member who sits on the planning commission, the planning commission wasn’t against PGL coming to town, but just had difficulties with the company wanting to take their trucks down south Brander Street. 

“I guess the majority of the people are for having Paterson Grain come to town, but the only reason it got voted down was the entrance to the property because it’s down that private street,” Lorenz said. “They are just more concerned about the truck traffic on Highway 5 turning off and on and being on a residential street. That is the only thing that got voted down at this time which was the access to the property.”

South Brander, which goes directly past Dr. David Liebold’s dentist office and T&J Plumbing, isn’t part of Bottineau’s truck route and when last paved wasn’t constructed for semis and trailers to utilize the street.

Brander and Thompson streets in that area also have 38 children on the two blocks, which brings concern to the parents in those neighborhoods. 

Wayne Johnson, general manager of the Bottineau Farmers Elevator, attended the meeting and stated that he is against PGL coming to Bottineau for a variety of reasons. 

“First, I question why anybody would build an elevator that close to town,” Johnson said. “Some of the reps say that they build elevators up in Canada right next to town, but the only elevators I see up are built way out of town.

“I think the numbers are wrong with the trucks and bushels. I don’t think you would spend a $20 million capital on a four or five million bushel handle,” Johnson said. “I think the truck count numbers are way off. I just don’t see where it is any good.

“As far as competition, the other day I did an area search of about seven elevators within  80 miles of Bottineau and they were all within five cents in grain prices. So, do we really need another elevator to come in and pay the same price we got? No,” Johnson said. “It is just one more trade, it’s all gain for Canada and nothing to gain for us. All the money that the elevator generates will go right back up to Canada.

“And, even if they do fix the rail, which they say they are going to do; again, I don’t see how the BN is all excited about 25 to 30 trucks to generate about 7 million bushels of grain, which is no big deal for BN to fix that rail,” Johnson said. “That tells me that there is more to the story than what they are putting out front,” he continued.

“The other thing is that, we have been hearing rumors about this for a year. It has been top secret, if it is a simple grain elevator put out there why would it be so top secret? Now they’re trying to cram it through and get all down right away, are they hiding something? Building a new elevator isn’t something to keep secret.

For PGL, they are asking the local community to assist in its future in Bottineau.

“If community members are in favor of Paterson’s proposed facility, we encourage them to speak to the members of the Bottineau City Planning Commission as well as the Bottineau City Council in support of Paterson’s application,” Paterson said. “Without an indication of support, Paterson will be looking to alternate, progressive communities that are interested in this type of development.”

On Monday evening, the city council held an informational meeting on PGL’s requests and opened it up to public comments.
Bottineau Farmers Elevator (BFE), Souris River Grain (SRG), Bottineau County Commissioners and local residents attended the council meeting with Lance Kjelshus of the BFE as the primary spokesperson.

Kjelshus stated through a letter that BFE has concerns with the truck traffic on Highway 5 and turning south on south Brander. 
Kjelshus also stated that he is not saying yes or no to PGL’s request, and felt more meetings should take place to discuss a number of items about PGL’s facility. He added that he would like to see PGL, BFE and SRG discuss a co-op together for a joint shipping terminal.

For now, it appears local  individuals want to keep discussions open with PGL.