SHERMAN — Progress Rail will build a $15.7 million extension of its building and create at least 55 jobs, Sherman Economic Development Corp. announced Monday. And, in return for the investment, SEDCO will pay Progress Rail $784,650 in two installments beginning Feb. 1, 2009.

“We are thrilled,” Progress Rail Plant Manager Theresa Fleming said. “This is awesome; we are just elated.” She added that she hopes to break ground soon and the plans are to eventually add about 60 jobs to the current 130 at the Sherman plant.

SEDCO President John Boswell said that the payments will begin after the construction is finished. The incentive is based on the value to be added to the tax rolls and not on the number of jobs created.

“We don’t stack incentives (pay for both investment and jobs),” Boswell said. When Progress Rail first came to Sherman in 1998, drawn here partially by a SEDCO incentive package, it invested $12 million. “So they’re going to just a little more than double their original investment.”

Progress Rail builds special railroad track pieces, Boswell said. One is called a frog.

Fleming laughed and said, that it is called a frog and it is part of the turnout that helps trains make track switches. Progress Rail currently is completing a project for Dallas Area Rapid Transit. Business is pretty steady in the railroad industry, she said. With the cost of fuel continuing to rise, people are looking to rail for freight and passenger services.

In a letter to Sherman Mayor Bill Magers, Progress Rail’s former Sherman Plant manager and current Vice President Arnie Monteleone wrote that the railroad industry is experiencing higher demand.

“Therefore, the Sherman, Texas, facility has decided to expand the capacity of the facility to increase manufacturing for the railroads,” Monteleone wrote.  “This will also allow the company to meet the demands of our customers. This expansion will consist of an additional 70,000 square feet as well as new state-of-the-art production machines. This will greatly enhance our productivity for our customers, create new jobs, and generate more revenue for the local economy.”