May 5—WILLMAR

— The city of Willmar is one step closer to a $1.16 million deal for a company to purchase 145 acres in the

Willmar Industrial Park

to develop a rail transportation hub connected to the Willmar Wye railroad bypass on the west side of the city.

The

Willmar Planning Commission

on Wednesday approved a purchase agreement for

Midwest and Bluegrass Rail

, a Kansas City company that intends to develop what

Kandiyohi County and City of Willmar Economic Development Commission

Executive Director Aaron Backman is now calling the "

Willmar Rail Park

."

"Willmar, going to the next level as an industrial hub," said Willmar Planning and Development Director Justice Walker at the Planning Commission meeting. "In conjunction with the

Willmar Wye

project, it's always been the ambition to add businesses that need a rail spur here, and this is finally the purchase that's going to put this through."

Willmar City Council

will also have to approve the purchase agreement. It approved an early access agreement for MB Rail at its April 17 meeting.

It has been reported previously that

Nexyst submitted a letter of intent in November 2022 to purchase 137 acres

in the Willmar Industrial Park for a $40 million project. It was described at that time as a regional transportation hub for the company, which moves crops from field to consumer by using a network of specialized containers.

According to Backman, this rail hub development is an expansion of what Nexyst had planned. Now MB Rail will instead be purchasing the land and developing and managing the site for tenants like Nexyst and other businesses that need rail access.

The project area is generally north of Minnesota Highway 40 and west of the new FedEx distribution center and Magnum LTL trucking.

MB Rail

has several rail parks in the south that it manages, according to Walker.

"We are on an accelerated time frame," Backman told the EDC Joint Powers Board on April 27 about the development. "What I told Justice (Walker) and anybody else that will listen is — this project, over the next 150 days, this will be my number one project for industrial development, because it has a significant impact. It positions Willmar in a strong way for future development."

He explained that there are multiple businesses interested in developing within the rail park, including Nexyst and another business planning a $20 million project.

Backman informed the Joint Powers Board that he would be flying to Lexington, Kentucky, on Friday, May 5, with a contingent of nine people from Willmar to meet with MB Rail "specifically for this project."

Moving forward, the Planning Commission will have to approve a subdivision for the development in order to make it one parcel and then there will be additional subdivisions as other businesses develop their projects within the rail park, according to Walker.

"Right now the thought is there are going to be multiple buildings over 200,000 square feet," Walker said. "For context, the FedEx building is 200,000 square feet. One of the buildings is 250,000 square feet — that's a five-acre building."

Walker told the commission that it is planned to also create a new I-3 zoning district for the development "that's going to encompass the railyard and essentially the uses are going to mandate that you have to have some rail component that mandates you be in the railyard, or you can locate somewhere else."

The

current city zoning ordinance

has two industrial districts: I-1 for limited industry and I-2 for general industry.

The project being planned will include an 8,000-foot rail loop coming off the Willmar Wye, Backman told the EDC Joint Operations Board at its April 13 meeting. A grain storage facility is planned along the west side of the project area and Nexyst would be on the east side of the loop, according to Backman.

"So you see various spurs here and they're for different projects that would come off the loop," Backman said about the site plans. "This is good. I think that it really could put us on the map in terms of distribution. We already have FedEx, we already have Northern Radiator and Mills Auto Parts and so forth that have distribution centers here, but this would really kick it up a notch in terms of agriculture commodities, distribution and other items."

Backman informed the Joint Operations Board that MB Rail would like to start installing the rail needed for the project this year.

Midwest and Bluegrass rail was formed in 2019 when its partners saw an opportunity to combine resources to form a full-service rail company with a unique approach, according to the MB Rail website.

Its executive team has more than 90 years of collective experience in the rail industry.

It is focused on acquiring multiple regional and short-line railroads in the next 48 months by utilizing existing contacts and developing new partnerships with industry leaders.