Cape County Commission approves issuing bonds for Nordenia expansion

It wasn't a hard sell.

A multifaceted public-private development deal that would drive a $22 million-plus expansion of Nordenia USA to an empty Jackson industrial park and conservatively add 50 jobs in the process cleared its first regulatory hurdle Thursday morning.

Cape Girardeau County commissioners, effusive in their praise of the company and the development plan, unanimously approved a resolution for the issuance of about $25 million in Chapter 100 revenue bonds.

"When you have the stock market going down 300 points [Wednesday], and the unemployment numbers aren't getting better, someone may scoff their nose at 50 jobs, but we won't. We'll take it," said Presiding Commissioner Clint Tracy, following the meeting in a commission chamber filled with Jackson city officials, all cheering the vote. "With opportunities to continue to grow and expand, 50 jobs is much better than many counties are doing around the country."

Under the terms of the development deal, Nordenia, a multinational corporation that manufactures flexible packaging at its Nordenia USA Inc. headquarters in Jackson, would be obligated to create the jobs over three years, with an average annual salary Cape Girardeau Area Magnet director Mitch Robinson said would be "north of" $36,000, including management and hourly positions.

Bill Burke, president and chief operating officer for Nordenia USA, told commissioners the 50-jobs target is a relatively conservative number.

"If the market carries the way we think it will, it could be closer to 80 or 90" jobs, Burke said.

The expansion plan calls for the creation of 35 jobs at the new facility and the addition of 15 positions at the existing plant on Highway 177, bolstering Nordenia's 400-employee local workforce by 12 percent. Nordenia's Germany-based parent company plans to initially invest $7 million in equipment, with another $8 million to $10 million in capital at the two sites in the next few years, Burke said.

As one economic development official put it, the commission's resolution allows the county to serve as a "conduit" for a 10-year tax abatement in property and equipment taxes for the planned development, reducing by 50 percent the tax burden of Jackson-based Nordenia USA and North Hubble Creek Development LLC, the group of unnamed local and out-of-state investors putting up the cash for the construction of the 183,000-square-foot plant.

Robinson and legal counsel representing the project each reiterated that the county's backing of the bonds would not put taxpayers on the hook.

"These have been done all across the state," Robinson said of the category of revenue bonds. "They are different from some of the industrial revenue bonds where the community has to step forward, like the airport did. There is no liability."

The city of Cape Girardeau as of last month still was waiting on $1.2 million in back payments from Commander Premier Aircraft Corp., based at the Cape Girardeau Regional Airport. Commander, which has received its eviction notice, was the beneficiary of city funding but failed to come through on job-creation and production promises.

Chapter 100 is an incentive the Cape Girardeau County is quite familiar with. Nordenia's deal marks at least the sixth time the county has signed off on the development spur. Nordenia, Tracy said, is just coming off the tax abatement schedule from its last expansion at its 21-year-old factory at Highway 177.

"It has paid back dividends," Tracy said of the revenue bonds.

Under the terms of the agreement, the city of Jackson would put up the 15.5 acres in the approximately 45-acre Jackson Industrial Park on U.S. 61, leveraging a $500,000 Missouri Community Development Block Grant to improve infrastructure to industrial land that has been empty since it was developed some 15 years ago.

The Jackson Board of Aldermen will take up its end of the public-private development deal Monday night. Based on the favorable response of aldermen at the commission meeting, approval appears all but certain.

Wade Bartels, chief financial officer for the Jackson School District, which will be affected by the tax abatement, said the district "totally" supports Nordenia's project.

The agreement, some two and a half years in the making, is subject to environmental clearances. The U.S. Army Corps of Engineers has authority over a ditch running through the industrial development site, because the ditch is a Mississippi River tributary.

"That's the last hurdle, so to speak," Robinson said.

The project is on a tight timeline. General contractor Penzel Construction Co. of Jackson hopes to break ground on the approximately $11 million planned factory by the middle of the month, and Nordenia wants to begin operation by the first of the year. Burke said the company needs to start hiring as soon as possible, so that new workers can get up to speed on sophisticated machinery.

mkittle@semissourian.com

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