Cape Girardeau area in short supply of desirable land that can attract major industry
Sunday, July 15, 2012
A recent spike in inquiries from industries contemplating a Cape Girardeau location has local economic development officials hunting to find suitable sites.
Nash Road, which offered access to Interstate 55, a river port and a railroad, is no longer an option.
In recent years large companies, intrigued by the location and area's workforce, couldn't overcome concerns about the property's position in a floodplain, even though it is protected by a levee. And the soil is not desirable for building.
"Larger clients in the manufacturing, distribution or processing businesses need larger acreage amounts," said John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce. "When a big deal does come, if you don't have the ground, you don't get the deal."
These developments -- coveted by communities for the jobs and economic impact they bring with them -- typically require sites of 25 acres or more. Companies typically request sites within three miles of a four-lane highway, preferably an interstate, said Mehner, who has been serving as interim director of the area's economic development organization Cape Girardeau Area Magnet.
The undeveloped land in the industrial park on Nash Road, formerly held by the Greater Cape Girardeau Development Corp., was sold in March for farm ground. About 100 acres in Cape Girardeau County and 140 acres in Scott County were sold to Westrich Farms LLC. A portion of that ground was designated as being in a 100-year floodplain on the most recent maps from the Federal Emergency Management Agency, Mehner said.
The Greater Cape Girardeau Development Corp., formed in 1959 by a group of local businessmen who bought shares in the company, created the 480-acre industrial park along Nash Road. Through the 1960s, '70s and '80s the area attracted a number of businesses, but after the Mississippi River floods in 1993 and 1995, outside companies have hesitated to locate there.
"Local people are much more comfortable with expanding or building there because they know that the levee has never failed," Mehner said.
Many businesses are finding the Nash Road site to be a successful location.
BioKyowa is in the midst of a multimillion-dollar expansion at its Nash Road amino acids production facility. Most of this work is slated for completion by early 2013, said Joel Melka, plant manager.
Thirty years ago, BioKyowa chose Nash Road in part because of its proximity to the Corn Belt -- corn is used in its manufacturing process -- and the low utility costs in this area. Both are still true today, he said.
While Nash Road's closeness to the interstate, rail access and the airport are all attractive, concerns about flooding, drainage and soil have made the area less desirable to potential developments, Mehner said.
"We had over 200 acres left down there, but the last two or three large prospects shied away because it is levee-protected," said Mayor Harry Rediger, who is the current president of Magnet's board. Rediger is also a shareholder in the Greater Cape Development Corp.
"We decided that we just couldn't continue to promote that area to large prospects and then have it shot down," he said.
Although businesses on Nash Road have stayed dry, Mehner said the images of levee breaches and rushing water in the national media have skewed the perception outside businesses have of levee-protected areas.
Earlier this year, Do it Best Corp. cited flooding as one reason behind its decision to move its distribution center, which has been on Nash Road for 40 years. The business broke ground last week on a 100-acre tract at the Business, Education and Technology Park in Sikeston, Mo. The park, owned by the city of Sikeston, has about 300 acres of its original 600 still available for development at the junction of Interstate 55 and Interstate 57.
About three years ago, the company began working with Cape Girardeau officials to search for a new site, but they couldn't find an available site large enough to fit their growing needs, said Randy Rusk, communications director at Do it Best, based in Fort Wayne, Ind.
Another Nash Road business, SEMO Food Bank, also recently announced it's moving its warehouse operations to Sikeston. The food bank selected a site off Route H. Its Nash Road facility will remain open as a volunteer center, however. Equal consideration was given to both Cape Girardeau and Sikeston, said Karen Green, the food bank's executive director.
The city of Sikeston bought the land for its industrial park in the mid-1980s and since then has attracted several industries, including Unilever, which employs about 700 people, said Ed Dust, director of the Sikeston Department of Economic Development.
The Perry County Development Corp., a not-for-profit subcommittee of the Perryville Chamber of Commerce, has about 91 acres available for development in the Perryville Industrial Park, where TG Missouri employs 1,200 people.
With Nash Road's former industrial park property now in private hands, little publicly owned land is left available for development in the Cape Girardeau area.
"We just don't have a big spot of ground anymore," Mehner said.
Dr. David Westrich said he isn't actively marketing the 240 acres on Nash Road he bought earlier this year from Greater Cape, or the 300-acre site he also owns Nash Road's west end.
"If somebody wanted to site something there, I would be open to discussing it," he said. Currently he leases the property for farming operations.
What companies are looking for in a site often runs the gamut, said Christopher Chung, CEO of the Missouri Partnership, a statewide business recruitment organization supported with public and private funds. "With the companies we deal with, they're typically looking for no less than 20 acres, but we sometimes field requests for companies who need as much as 300 to 400 acres. Those tend to be heavier industrial users who have strict utility requirements for electricity and water and sometimes natural gas."
Often companies looking for large tracts of land also want rail or river access in addition to being near a highway, Chung said.
Jackson has a small amount of publicly owned land for development including about 30 acres adjacent to Nordenia USA's new facility in the city's North Industrial Park, off U.S. 61. The site is about 1.6 miles from Interstate 55.
The Jackson Industrial Development Corp.'s Industrial Park off Route PP about three miles from Highway 72 has about undeveloped 15 acres. Lorimont Place Ltd. represents private owners of a 38-acre parcel adjacent to the North Industrial Park that is for sale.
Lorimont also markets about 35 acres left in Cape Girardeau's 630 Industrial Park, once home to Dana Corp., off Southern Expressway. Some of that property was purchased by the city of Cape Girardeau for its new wastewater treatment plant. The 630 Corp. was founded in 1987 by a group of area businessmen who purchased the 191-acre tract to be marketed for industrial use. The company's remaining properties are now owned by Earl Norman, CEO of Benton Hill Investment Co., and offer proximity to the interstate.
Crossing county lines, Lorimont markets about 500 acres owned by the Gene Rhodes family available on Nash Road, east of Interstate 55 in Scott County. Portions of that property, however, are in the 100-year floodplain, according to FEMA maps.
Privately owned industrial sites, like the ones Lorimont represents, can't offer some of the incentives that publicly owned properties can. "Everybody examines what their site cost is going to be. If the industry is large enough and it means enough jobs, they virtually can get the property for next to nothing," said Tom Kelsey, broker with Lorimont Place. "We've been competing against that in the past. An independent developer certainly can't offer that."
Depending on location, its industrial sites are advertised from anywhere between $25,000 near the Jackson Industrial Park to $40,000 an acre for the Rhodes property on Nash Road, according to the Lorimont Place website.
Kelsey and Mehner said they work together when either is approached by a prospective company to match what's available in this area with what the company is looking for.
Both say interest in industrial sites has picked up in the past six months.
"You can go a long time with very limited inquiries, but with that said, we've had 10 in the last 90 days," Mehner said.
The Cape Girardeau area is well-suited for distribution centers because of its central U.S. location and access to Interstate 55. It's attractive for many types of manufacturing because of the raw materials such as wood, agricultural products and plastics produced in this area, Mehner said.
Several companies in recent years chose this area because they support existing industries, Kelsey said. Examples include MidSouth Wire in Scott City, which is a major supplier to Rubbermaid in Jackson, and Signature Packaging, which makes boxes for Procter & Gamble.
Cape Girardeau County, MO
Scott County, MO