Chlorogen picks Kentucky site over SEMO

The $350 million Lewis and Clark Discovery Initiative, which includes selling portions of the Missouri Higher Loan Authority, finally has the support it needs to pass the state House and Senate. But that announcement made Saturday by Gov. Matt Blunt could not convince one biotech firm to build in Cape Girardeau.

The much-ballyhooed first occupant of the 410-acre Technology Park, Chlorogen Inc., has pulled out of an oral commitment to build a manufacturing and research facility in Cape Girardeau. Instead, the biopharmaceutical firm will likely take up residency in Owensboro, Ky.

As part of the plan, $4.5 million was allocated to Southeast Missouri State University's life science business incubator -- $500,000 less than originally expected -- along with $17.2 million set aside for the university's River Campus project.

The money for the River Campus arts school was included in a MOHELA bill that failed in the Missouri Legislature last May. The bill would have used proceeds from MOHELA to fund construction projects at state universities.

Chlorogen would have been a beneficiary of the portion of the funds earmarked to attract high-tech industries and would have helped fund $13.6 million local dollars still needed build the university's technology and research park.

Chlorogen CEO Dave Duncan said the Kentucky space was just too good to pass up. "There is an awful lot of serendipity involved here. They have exactly what we need when we need it," he said. "For us this is an easy business decision."

Duncan said the $50 million facility has been harvesting tobacco at the location for 10 years. It also comes packaged with employees trained to grow specific strains of tobacco and extract the proteins Chlorogen hopes to use for pharmaceuticals.

"This saves us at least a year in development time and probably $5 million over the next two years. That's extremely beneficial to a little company like us," said Duncan.

Duncan said his company may still build a facility in Cape Girardeau "on a less grandiose scale." He said delays in the MOHELA sale did not scare his company off.

If Chlorogen passes on the Technology Park space other suitors are plentiful, said Southeast president Dr. Ken Dobbins. "There are several other firms out there looking for this type of biotech incubator," said Dobbins. "I can't disclose any names, but there are several very interested groups."

Dobbins said the $350 million sale of MOHELA will generate much more in jobs and opportunities. Of the $350 million, Dobbins says, "You can multiply it several times and you still won't get the full impact. When you look at not only the funding for higher education but the attraction of high paying biotech jobs and the boost to the economy from construction projects, this is big." he said.

The plan to transform student loan profits into college construction could also result in a new loan handler for some students at the University of Missouri and elsewhere.

The core of the agreement calls for the state's student loan authority to transfer between $350 million and $450 million to an arm of the Missouri Department of Economic Development, which would distribute the cash to campus projects. In exchange, MOHELA would receive assurances that could expand its reach in Missouri's student loan market. It would be guaranteed $130 million in tax-free bonding authority this year, plus an additional $100 million of such authority for each of the next 10 years.

Additionally, the University of Missouri would pledge to consider increasing its use of MOHELA for student loans. That could mean a considerable bump in business for the Chesterfield-based quasi-governmental student loan agency.

Whereas the university's St. Louis campus relies almost entirely on MOHELA and its Rolla campus processes about 40 percent of its loans through the agency, the flagship campus in Columbia and the Kansas City campus each uses MOHELA for fewer than 1 percent of its student loans, said university spokesman Joe Moore.

Yet under the spending plan for MOHELA's proceeds, roughly one-third of the money committed to university construction projects statewide would go to those two campuses.

During the debate in the legislature last spring, MOHELA had said it was necessary for lawmakers to change state law to specifically allow for the proposed transfer and use of its money by the state. Attorney General Jay Nixon said Monday those legal concerns remain.

"I have no idea why what was necessary a few short months ago has now become unnecessary," Nixon said.

AP Reporter David Lieb contributed to this report.