Developer Gerry Kamilos was dealt a stunning blow Thursday when the Port of Oakland turned its back on his ambitious plan to build a short-haul rail center at Crows Landing.
Whether that blow proves fatal to the multimillion-dollar proposal, however, remains to be seen.
Stanislaus County is in the midst of an exclusive one-year negotiation, which ends in April, with Kamilos' company, PCCP West Park, to develop the old naval air station at Crows Landing.
Short-haul rail linking Crows Landing and the Port of Oakland is the key component of the project.
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"This is a significant wrinkle ... and one that West Park will have to address," said Keith Boggs, the county's project liaison. "Their project description hinges on rail, and making it viable is their responsibility."
Supervisor Bill O'Brien, who opposed the West Park plan, said the county still must honor its agreement with the developer.
"The majority of the Board of Supervisors voted for this plan, and we've got to give (West Park) a fair shake with a year's negotiation to see if they can pull it off," he said. "They have a lot of work to do, and they admit that as well. (But) West Park deserves the 12 months we gave them to make it work."
Kamilos vowed to move the project forward -- with or without the port's support.
"The Port of Oakland is an important partner in this," he said, "(and) we will continue our dialogue with the port. (But) we're going to go full speed ahead with this. There's no hesitation here."
Officials at the Port of Oakland, in a Thursday morning phone interview with The Bee, indicated that there may be little Kamilos can do to change their minds. Spokeswoman Marilyn Sandifur, and Jon Amdur, a freight expert and manager of the port's maritime capital improvement program, said short-haul rail doesn't figure into the port's immediate plans.
"Our priority projects all involve long-haul rail," Amdur said. "That's our proven market. That's what our customers are pushing, (and) that's what the railroads are pushing."
That sentiment was echoed by Randy Rentschler, spokesman for the Metropolitan Transportation Commission. The MTC is the lead transportation planning, coordinating and financing agency for the nine-county Bay Area.
"We have millions of Bay Area residents and billions of dollars in trade all tied up in (traffic) congestion," Rentschler said. "Our view is that the Crows Landing project won't help us solve the problems we have right now."
West Park was trying to put together a Bay Area-Northern San Joaquin Valley coalition, which would have included the MTC. The group would present a single funding application early next year seeking state transportation bond money, including $52 million needed to kick-start Kamilos' $200 million venture.
Kamilos said that effort would continue but conceded that valley interests may have to go it alone in their quest for state funding.
Sandifur said the Port of Oakland had no interest in joining a valley-Bay Area coalition that would include short-haul rail at Crows Landing. But she added the port would not oppose a separate funding effort by Kamilos or others interested in short-haul rail.
The system is based on using freight trains, usually 50 cars or fewer, to move goods short distances, such as from Crows Landing to the port. Kamilos' plan would have the first trains moving in 2011, and full project completion in 14 years.
"We are supportive of the (short-haul) rail concept as a long-range strategy," Sandifur said, "just not at this time."
The port's Amdur, meanwhile, called the Kamilos plan, "an idea whose time hasn't come yet."
So, rather than a partnership, it appears that Bay Area and valley interests may be in direct competition for a share of the $2 billion in state money that will be made available next year.
Amdur called short-haul rail at Crows Landing a "highly speculative" proposition that will require a huge subsidy to operate -- at least in the near term.
He also said that the Kamilos group faced daunting infrastructure costs to convert the onetime airfield into a rail yard.
As a result, Amdur said, it might make more sense to one day build a short-haul yard in Lathrop, in San Joaquin County, which is closer to main-line railroad tracks.
But Amdur said he was only speculating and stressed that the port has no preferred site for a short-haul rail hub and no plans to develop short-haul rail anytime soon.
"It's too costly and just not feasible right now," he said. "It's cheaper and easier to use trucks."
Kamilos said he was surprised by comments that the port was not interested in joining forces with valley interests to secure state funding, calling them inconsistent with previous comments made by members of the port's management team.
"We need to follow up with the port," Kamilos said, "to find out where they really, really stand."
Kamilos wasn't the only one caught by surprise Thursday.
"Well, I have not heard of any such comment. This is something new to me," said Stanislaus County Supervisor Dick Monteith, a supporter of the Kamilos plan. "You are catching me off guard.
"Everything I've heard (on the bond-money application), everyone was going together. We are aware that we aren't the No. 1 priority in Northern California, but we are a very important part. We have a contribution to make."
Supervisor Jeff Grover, also a supporter of the Kamilos project, said the message delivered by port officials Thursday was different than the one he previously heard.
"I was at a meeting in their office (Port of Oakland) a year and a half ago, and they were very, very interested in it," Grover said. "I heard it directly from them.
"They either made a policy decision to go in another direction, or there is a difference of opinion in the organization."
Since that meeting, the port has changed maritime directors, but it's not known if that change has affected its position on the Crows Landing plan.
Supervisor Jim DeMartini, a critic of the Kamilos plan, said the port's comments Thursday didn't surprise him.
"I always felt the rail project was a sham; I never liked it," said DeMartini. "He (Kamilos) has always said rail is the key to his project. It is fatally flawed. It's a rail line that goes nowhere. ... It's a dead-end line."
Patterson Mayor Becky Campo said comments from the Port of Oakland reaffirm what many people on the West Side have believed all along.
"When the time comes around to award the projects, perhaps the board will think twice," she said. "Why go through all of this if the support isn't there?"
Sandifur and Amdur said the port and its long-haul rail partners -- the Union Pacific and Burlington Northern Santa Fe railroads -- had more pressing needs than helping Kamilos develop his short-haul rail idea.
The port's priority projects include:
Expanding its rail yards
Adding grade separations at the port, including construction of overpasses and underpasses to relieve traffic jams
Improving long-haul railroad track over the Tehachapi mountains
Improving and adding railroad track in and out of port facilities via Martinez, in Contra Costa County
Enlarging train tunnels on Donner Summit so that freight trains can double-stack cargo containers heading east
The price tag for those projects, according to port officials, is nearly $1 billion. That means the port is seeking nearly half of all the bond money that will be available for the state.
Bee staff writers Tim Moran and Christina Salerno contributed to this report.
Bee staff writer Michael G. Mooney can be reached at firstname.lastname@example.org or 578-2384.