The City of Tacoma will lease approximately 2.4 acres of land it owns in Fredrickson to a company that plans to use the site to build a facility to transfer ethanol and other liquid commodities from trains to trucks.

According to the terms of the lease approved by Tacoma City Council on Tuesday, KAG Logistics, Inc. will enter into a five-year lease with the City and Tacoma Rail, and spend $800,000 to install the infrastructure needed for the translating facility, such as tracks, switches, water and electrical service, paving, and fencing. The company will pay $24,000 per year to lease the site, and $400 for each railcar that moves through the facility. Tacoma Rail officials report the facility will serve 40 to 60 railcars per month. However, the base rent will be waived if KAG Logistics transports a minimum of 20 railcars per month, which would generate $96,000 annually for Tacoma Rail. Improvements made to the site will become the property of Tacoma at the end of the lease. KAG Logistics will also have the opportunity to renew its lease in three five-year extensions.

The site is located along Canyon Road East, just south of Frederickson Industrial Park Road East, in an area known as the Canyon Road “Y.” Tacoma purchased the land from Weyerhaeuser in 1995.