Initial work on a long-planned transit station in Newport, postponed in July because bids were too costly, will begin in November with demolition of an abandoned retail building on the site.

Washington County commissioners voted 4-0 last week to award the first contract to Rachel Contracting of St. Michael for grading, utilities, paving, landscaping and irrigation on the 5-acre site. Rachel was the lowest bidder of seven bids received, said County Engineer Wayne Sandberg, at a cost of about $1.3 million.

“This is going to change the whole dynamic of that area. It’s got such potential. It’s going to springboard a lot of wonderful things for Newport,” the city’s administrator, Deb Hill, said after the County Board meeting. Removal of the long-empty Knox Lumber building, a popular haunt for vandals over the years, will rejuvenate a blighted area, she said.

The transit station will be the first city development along the Red Rock Corridor, a major transit line from downtown St. Paul to Cottage Grove and south to Hastings and possibly Red Wing. It’s expected that express buses will service the station at first, but Sandberg said the building was designed for potential modification should Bus Rapid Transit or commuter rail someday follow that route.

A second bid, for building construction and electrical work, is pending because the low bidder failed to meet Disadvantaged Business Enterprise (DBE) requirements, Sandberg told commissioners. Federal law specifies that 15.5 percent of a total contract on a project funded with federal and state money must go to subcontractors owned by women and minorities. Parkos Construction of West St. Paul bid $952,000, but whether the company lands the contract depends on negotiations on the DBE issue, Sandberg said.

“We don’t pick favorites with this. This is a requirement that is larger than the county,” said Sandberg, who hoped to award a bid by mid-November to Parkos or one of five other bidders.

Construction of the 1,100-square-foot station, which would seat up to 70 commuters, should begin next summer with completion by October 2014. It will resemble the Forest Lake transit station, Sandberg said.

The Newport project was delayed in July when the County Board rejected all bids because they exceeded engineers’ cost estimate and budget. The new project design, reduced by about $600,000, shows a somewhat smaller station size, 50 fewer parking stalls, and a cul-de-sac made of asphalt instead of concrete. Total project cost is about $2.3 million.

“Now we have a price that still meets all of our goals but is affordable in our budget,” Sandberg said.

To help move the project ahead at the lower cost, the city of Newport waived fees amounting to about $20,000. The city of about 3,400 residents is “thrilled” that the county might install fiber optic service to the site, Hill said. “I think it certainly makes the site more attractive,” she said. “If it helps the county, it helps us.”

Overall, the transit site will consume about 5 acres of county land, leaving 6 more acres for a potential housing and retail development.

“The idea is to start economic development, and promote some development, in the Newport area,” he said.

Commissioners Autumn Lehrke, Ted Bearth, Fran Miron and Gary Kriesel voted to put Rachel Contracting to work. Lisa Weik was absent.