A more than 3,000-acre tract of land between Fort Carson and the city of Fountain is one step closer to becoming an industrial site with a new rail spur into the military base and the potential to generate thousands of jobs.

El Paso County Planning Commission unanimously backed a sketch plan of the four-stage, multimillion-dollar project in May ahead of a review by the Board of County Commissioners. Called the Southern Colorado Rail Project, the development is the proposal of the international Edw. C. Levy Co.

After years of negotiations with the county and cities of Fountain and Colorado Springs dating back to its proposal in 2017, the Southern Colorado Rail Project, if approved, will occupy a section of land bordered on three sides by Fort Carson and on the other by Fountain just west of Interstate 25.

A sketch is the first step in approval for large or complex land development projects, meant to broach discussion on the feasibility. The project will then approach the county with a preliminary plan.

Steve Mulliken, a lawyer with the company, said that the area was “ideal” for the type of heavy-industrial project usually undesirable in a population center. A live-fire area on Fort Carson and Fountain utilities operations are both in the vicinity, he said.

“It’s a very active area with uses that are not compatible with many things but would be compatible with a rail-served industrial park,” he said.

Mulliken added that the industrial park would not be visible from I-25.

Current estimates of jobs generated by the project when completed are around 7,000. Project manager Gary Barber said that estimate came from an aggregate of businesses that came to the Colorado Springs Chamber & Economic Development Corp. in recent years seeking rail service in the area, and had a projected range of 5,500 to 11,000 jobs.

If the sketch is approved by county commissioners, next steps in the project include applying for the area to become a metropolitan district, a governmental entity that can raise money through property taxes and apply for certain federal grants. The plan also raises the possibility of creating a rail authority that would include current public and private stakeholders.

A special district would allow the multiple stakeholders to jointly plan for public works, said Kimberly Bailey, Fountain economic development and urban renewal director.

The project probably would also apply for full annexation into the city of Fountain, which has in the past considered supplying utilities to the site.

Bailey said that plan was now less defined where water is concerned, as conservation of the limited resource becomes a bigger issue to the city. She said that stakeholders were considering a “collaboration” to meet water needs.

“We have to further evaluate how the services can be provided,” she said.

A water feasibility study conducted by Edw. C. Levy and submitted to the Planning Commission estimated that the project’s industrial build out could require 98 million gallons of water each year. That figure was derived from an estimate of 20 gallons used per square foot of planned heavy industrial space, a statistic pulled from the U.S. Energy Information Administration.

The report said the actual water use per square foot could be different, depending on what industry decides to build in the area.

In a letter of intent submitted in June 2023, Fountain Utilities Director Dan Blankenship said that the city would provide water if the annexation went through on a “first come, first served basis.”

“To address capacity beyond the city’s current unused water rights, we are working on a policy that would require landowners/developers to obtain water rights that are consistent with the city’s existing water rights portfolio.”

A spokesperson with Colorado Springs Utilities said that no current agreement exists to supply water to the project, and that utility coverage was currently limited to its service territory.

The May approval application included a recommendation to waive an annexation-impact report typically necessary for parcels of more than 10 acres. Kari Parsons, a planner with the county, said that the project had already conducted studies that would cover the requirements set out in the report. The Board of County Commissioners will now decide whether to approve the waiver request along with the rest of the sketch.

Andrea Barlow, a planner with N.E.S. Inc. who is working on the project, outlined the proposal’s stages, starting with a new rail connection that would allow a second railyard for Fort Carson. Former post commanding Gen. Matthew McFarlane said in a letter presented in 2023 and at the May meeting that the second rail connection would help reinforce security.

“A second rail line would dramatically increase the reliability of rail operations at Fort Carson,” he wrote.

Mulliken at the May meeting said that Fort Carson’s current rail spur, which meets the main line at the Kelker Junction yard on the north side of the base, was built in the 1940s to accommodate shorter trains. He said that railcars are now often backed up into insecure areas near the base.

“They wind their way through neighborhoods, and they’re sitting there exposed,” he said. “It’s not a good route.”

The new rail spur would be used by both BNSF Railway and Union Pacific, according to Mulliken. The proposed spur splits off from a line serving Colorado Springs Utilities’ Nixon Power Plant.

According to Colorado Springs-based project manager Gary Barber, the rail spur was the impetus of the entire project as regional economic leaders and Fort Carson looked at ways to secure the base’s standing in the Base Realignment and Closure evaluation conducted by the Department of Defense. The study determines the size and placement of military assets and installations, and can result in the closing of existing bases.

Bailey said that retaining and capitalizing on the economic advantages of Fort Carson was a top priority for Fountain. She said adding a redundant rail spur would increase the deployment capacity of Fort Carson, lessening the likelihood it might be closed.

She also said that a heavy-industrial center might attract veterans to stay in the area for employment.

“That really could be applied to the technical skillsets coming out of the military,” she said.

After the rail spur, the three other phases of the project would build out the industrial site and a commercial area in increments of five years per phase, according to Barlow. Plans include a commercial area for shops and restaurants.

The sketch will next be heard at the Board of County Commissioners meeting on Tuesday.