Some officials say public help needed for industrial park

Sunday, August 19, 2012
Michelle Moore and Eric Mayfield work on the airframe condition inspection for a Beechcraft C-12 twin turboprop before the military aircraft is painted Friday at Sabreliner Corp. in Perryville, Mo. The company leases the property from the city. (Fred Lynch)

Cape Girardeau is battling to bring new businesses and the jobs they promise to the community, but without a publicly owned industrial site it's at a competitive disadvantage, say some local officials.

Behind the scenes, the hunt is on to find land that could serve as an industrial park.

Cape Girardeau Mayor Harry Rediger called developing a new industrial park "vital" to the city's future. A recent community survey also showed economic development is very important to residents, Rediger said.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, said that a lack of affordable, available land in Cape Girardeau County has cost the region jobs. The most recent example is Do It Best, which is moving its distribution center, a $30 million investment, and 115 jobs to Sikeston, Mo., after the company couldn't find a suitable site in Cape Girardeau. Mehner, who is also serving as interim director of Cape Girardeau Area Magnet, the region's economic development agency, said they showed the company several sites in Cape Girardeau. The company was looking for a 50-acre site but found a 100-acre tract in Sikeston's Industrial Park.

"The situation we are in today's world, to be competitive with these deals, we need to have a concentration of land of 200 acres or more that is served by utilities and reasonably close to Cape," Mehner said.

Land is Cape Girardeau is not inexpensive, he said. Those in the private sector who bought at a certain price won't sell it at a much lower price, which makes it difficult for Cape Girardeau to compete with other communities willing to give away land for next to nothing in exchange for the benefits the business will bring to the community.

"We're in the search process now for industrial property. It will be funded under some arrangement with public funds. I don't know how what that arrangement will be or how much money we will need or how many acres yet, but it is underway," Rediger said.

It's also not clear whether developing an industrial park would be done solely by the city or in partnership with the county or even other cities.

TIF districts

Missouri statutes allow communities to use several tools to acquire land for industrial development.

Ste. Genevieve and St. Francois counties have used tax increment financing to finance their industrial parks, said Chauncy Buchheit, executive director of the Southeast Missouri Regional Planning and Economic Development Commission.

In a TIF area, a portion of taxes from new developments are used to help pay for improvements or retire debt on the property that is developed.

The city of Sikeston purchased 600 acres of farmland more than 20 years ago to create its industrial park. It can offer this land for much less than what comparable land is selling for today, said Ed Dust, director of the Sikeston Department of Economic Development.

In Perryville, the city owns the land at its airport and has leased much of the property to aircraft refurbishment company Sabreliner. The company last year opened a $7 million paint hangar and promised hundreds of new jobs.

Due to changes in government contracts, they've added fewer jobs than originally announced, but the new hangar has allowed the company to work on more planes, helping preserve the jobs already there and adding a few more, said Al Farless, vice president of program development.

Jackson also owns the land in its industrial park off U.S. 61, where Nordenia opened a new $25 million plant earlier this year.

"That land was purchased by the city strictly to recruit industry into the city," Mayor Barb Lohr said. About 15 acres are left in the industrial park.

According to an annual survey by the University of Missouri's Agricultural Economics department, cropland in Cape Girardeau, Scott, Perry, Ste. Genevieve and St. Francois counties was valued at $3,727 per acre in 2011, double what it was 10 years earlier.

Sales tax

Another tool some communities have used to buy industrial park land is a local option economic development sales tax.

Buchanan County, home to St. Joseph, Mo., passed a quarter-cent sales tax in 1996 that today generates more than $1 million annually.

"We could not do economic development in this community without it. It has been the single biggest incentive program we have had to use to help industry," said Steve Hamilton, senior vice president in charge of economic development with the St. Joseph Metro Chamber of Commerce.

The fund is used to make loans to help companies purchase land or equipment. It's a forgivable loan secured by a letter of credit from the company's bank. If the company meets benchmarks for job creation, then the loan is forgiven, Hamilton said.

Land in their industrial park was developed through a public-private partnership. A group of private investors purchased the property and the city provided the roads and utilities.

Without an industrial park, it is significantly harder to attract industry, Hamilton said.

"If there is no infrastructure there, the conversation is over. You would be ahead if you could find a way to establish the infrastructure. You don't have to put in all the roads and utilities initially, but enough to provide sites people can look at," he said.

St. Joseph has also used its economic development fund to construct shell buildings in its industrial park. Three of four built were sold before being completed.

"Those can be very critical to establishing a market for lots out there. With some of these companies, once they decide to go they want to go now," he said.

Cape Girardeau County Presiding Commissioner Clint Tracy said an economic development tax would be a possibility in Cape Girardeau County, but it would have to be approved by voters.

"It's always good to explore all your options, but land prices are such that it would be hard to be competitive to put ourselves in that position," Tracy said. "As far as the county putting down money for an industrial park, I've got concerns about that."

Chapter 100 bonds

The lack of accessible land that is ready to accept business has been an issue for the county, Tracy said.

But he believes the county can have the most effect by offering businesses Chapter 100 bonds to help finance projects, as was done with Nordenia and Procter & Gamble in the past year.

Jackson's Lohr said her city would be interested in being part of the conversation about a new industrial park in Cape Girardeau County, but she has hesitation about it.

"Our feeling is that the city really shouldn't be in the real estate business; however, we do have several very attractive tracts of land that are zoned industrially but they are in private ownership," Lohr said.

"We'd have to look at it and see exactly where it was and that type of thing. I know that we would be interested at least in being a part of that discussion," she said.


Pertinent address:

Jackson, MO

Cape Girardeau, MO

Map of pertinent addresses

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