YOUNGSTOWN — An investment from the Ohio Rail Development Commission will help a Kansas-based railroad that has an affiliate system in Youngstown construct a new rail yard in the city.

The $2.9 million project will help Youngstown & Southeastern Railroad, part of Midwest & Bluegrass Rail, centralize its railcar storage-in-transit, or warehousing, operation at its Lansingville yard on Poland Avenue on the South Side.

The commission and Youngstown & Southeastern each would contribute about $1.45 million.

When it met Thursday, the commission approved its portion of the funding for the project that “will allow the railroad to place and retrieve railcars more efficiently” by using less crew member time to move the cars “to and from various locations at a site closer to where the cars will be interchanged,” a summary of the project filed with the commission states.

The project involves constructing a five-track yard with capacity for 220 cars at a brownfield site. The work includes installation of about 15,000 feet of new track and six turnouts, according to the state.

Site preparation, grading work and construction of two new yard tracks is already underway and will be completed separately from the new rail yard project.

According to documents provided by the commission, Youngstown & Southeastern’s warehousing operation is spread over multiple sidings and spurs, and retrieving specific railcars involves mobilizing its crew to find and stage the railcar for interchange.

The company’s interchanges are in Youngstown, but its infrastructure extends south to Columbiana County, about 25 miles, “so the railcar needed may be located many miles away,” the project summary states.

“This arrangement uses extensive crew time and can disrupt service” to the railroad’s five online companies, and since Youngstown & Southeastern infrastructure is at or near capacity, “this hampers the ability of the railroad to market itself to prospective customers,” the summary states.

Also, the railroad can use the site to “offer value-added” services like railcar repair and cleaning, and offering more opportunity for transloading — moving goods between different modes of transportation — closer to Youngstown “can enhance transportation choices for prospective customers interested in rail services,” the summary states.

The company’s transloading site is in Columbiana County.

“This funding is critical for this project to be completed,” state Sen. Al Cutrona, R-Canfield, said in a press release. “This provides the region with efficient railways, economic growth and opportunities. This project is a testament that great things can happen when private and public entities work together.”