Rail yard

The Army Corps of Engineers held a 2014 public hearing (above) to help the permitting agency assess the impact of Palmetto Railways' planned rail yard.

Provided/Army Corps/Sean McBride

Palmetto Railways will pay $4 million to help offset the impacts that a proposed rail yard at the former Navy base will have on nearby residents, several community groups said Wednesday.

A memorandum of agreement is being finalized and a formal announcement of the deal is scheduled for next week. The money will come from Palmetto Railways, a Charleston-based division of the S.C. Commerce Department.

The week ahead

A Palmetto Railways locomotive returns to State Ports Authority’s Columbus Street Terminal in downtown Charleston. The short-haul carrier will hold an open house in Cross on Tuesday about a new rail line that would serve the site of the future Volvo plant.

"The agreement represents months of dialogue and hard work between community leaders and the leadership of Palmetto Railways," Omar Muhammad, president of the Lowcountry Alliance for Model Communities, said in a statement.

More than half of the money will be used to build a new recreation facility on city-donated land behind the Military Magnet Academy on Carner Avenue in North Charleston. The rest will pay for programs promoting affordable housing, job training, educational initiatives, environmental research and youth initiatives.

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The groups that will receive the money include: Lowcountry Alliance for Model Communities; Metanoia Community Development Corp.; Chicora/Cherokee Neighborhood Council; and Union Heights Community Council. Those groups expressed concerns over impacts to health, housing, the environment and other issues during meetings held by the Army Corps of Engineers, which is reviewing a permit application for the project.

The $130 million rail hub would transfer containerized cargo between CSX and Norfolk Southern freight trains and the nearby shipping terminal being built along the Cooper River by the State Ports Authority.

At build-out, the rail yard will employ about 120 workers and handle 1.1 million cargo containers annually. It is expected to be ready for operations in 2019, about the same time the new port terminal opens.

A news conference announcing details of the agreement will be held Nov. 9 in North Charleston. Representatives for Palmetto Railways and Commerce Department said Wednesday that the terms of the deal were still being finalized.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_