Company mulls grain elevator near Fairfield
Heartland Co-op told the Jefferson County Board of Supervisors and a packed meeting room Monday morning it is interested in building a grain storage elevator and rail shipment operation in the county.
Tom Hauschel, CEO and general manager, and Todd Phillips, executive vice president of grain and risk management at Heartland Co-op, with 52 Iowa locations and administrative offices in West Des Moines, outlined the economic development project planned for about two miles east of Fairfield.
“This would be a $25 million investment to build 4.4 million bushel of storage capacity,” said Hauschel. “We figured this by drawing on six counties using it in the region.”
The company has already acquired 162 acres that border Nutmeg Avenue and Highway 34. Of that 162 acres, 150 acres will remain as agricultural land, only 12 acres will be devoted to grain elevators, roads for trucks and the facility’s rail siding in the first phase.
“It would be a 10 minute in-and-out delivery system for semis to bring harvested corn and beans,” said Phillips.
He said the community impact is a $12 million to $14 million capital improvement for the county. Phillips said up to 30 jobs would be created during the construction phase, not all at the same time. Six full-time employees would operate the site, with more part-time help added during harvest season.
“And if we position two to five semis here, that will create a few more jobs,” said Phillips.
Part of the project would include upgrading Nutmeg Avenue from Salina Road to old Highway 34 as a concrete road, and the same for Osage Avenue, because semi trucks will use those two roads as routes to the elevator. Truck traffic from the north will cut across 185th Street or a similar road, which also would be upgraded for semi traffic.
Outgoing executive director of Fairfield Economic Development Association, Tracy Vance, helped explain the project.
“The railroad underpass is not in BNSF’s plans to widen, but things could get on list for upgrades,” said Vance. “Traffic control lighting would be added there.”
The intersection of Salina Road and Pleasant Plain Road will get straightened out to a T-intersection for safety.
“Heartland is asking the county to make these road improvements, at an estimated cost of $3.725 million,” said Vance. “I’m recommending a TIF to pay for bonding. Tax Increment Financing captures tax revenue for specific purposes.
“The 162 acres will continue to be taxed just as it is now, and that property tax will continue to go where it goes now into the county fund and school district fund. The TIF will be on the new capital improvements, the new facility, which has been estimated at an assessment of $14 million. We take that property tax, about $338,000 per year, which is new money and doesn’t disturb the old money one bit, and use it for debt service for 10 years.
“Now, understand, the $338,000 is tax money for what’s on top of the ground and if this project doesn’t go forward, that money isn’t there,” said Vance. “TIFs are created as incentives and designated for improvements within the TIF district. The TIF district for this will include the acreage and the roads from right-of-way to right-of-way; it will not include property owners along the roads in the TIF district.
“Heartland will receive a TIF rebate that is money in excess of costs to build up the roads, for 10 years,” said Vance. “In years 11 through 15, the last five years of the TIF, the excess money will go to the Fairfield Community School District, to soften the blow from capturing the money from the general fund.”
Three members of the school board attended the supervisors meeting Monday, including school board President Jennifer Anderson and members Jerry Nelson and Joe Carr. Both Anderson and Nelson live on active family farms.
“If this project gets built, the county will see $338,000 in new tax revenue dollars and we’re giving it up for 15 years to use to build better roads,” said Vance. “We’ll need to have bond counsel, the county attorney look at all this, and agreements need to be made. We’ll need to address the school board about it.
“Having $338,000 per year over a 15-year time period is $5.7 million in tax revenue, of which 65 percent will be used for roads; 23 percent is an incentive to Heartland; and 12 percent will go to the school district.
“I don’t think 23 percent is out of line as an incentive to the co-op,” said Vance.
Reed said he was happy to see progress in the area and he would be interested in hearing comments.
“We’ve been trying to get Nutmeg and Osage paved a long time,” said Reed. “We’ve gotten a lot of calls about it.”
Supervisor board president Lee Dimmitt said he knows Vance and county engineer Scott Cline have driven lots of roads trying to figure out how to get things accomplished.
“I know they have put a lot of work into this, along with Heartland,” said Dimmitt. “I personally think it’s beneficial in the long run for the county and the school district. We’re not losing any current tax revenue. If we don’t move forward we won’t capture that other tax revenue.”
Hauschel said in other Heartland Co-op locations, crop prices paid to farmers increase by 10-cents a bushel and farmers realize freight savings by having a closer elevator to deliver to.
Phillips, a native of the Eldon area, said he keeps a small farming operation in the region, and all of the member owners in Heartland are active farmers.
He said other companies are looking at building a similar facility in Mount Pleasant, but the spot in Jefferson County is on the table first, and the railroad is favorable toward this project and site.
“French-Reneker has worked with us since we acquired the land, and completed all the studies for the site,” said Hauschel. “We like to source work locally and will strive for that in the construction process.
“We’d expect to start construction in summer 2014 and be in production by fall harvest 2015, if everything stays on track.”
Supervisor Dick Reed said he could see a lot of economic benefits from the project.
“I also drive through the county and see a lot of farmers have put up large grain bins,” he said. “And we have Reiff Grain & Feed here already. So, I want to hear the other side of the story. We’ll need to listen to our community.”
Vance said in the big picture, the project would be a boon to the area.
Reed and the other supervisors concluded competition is good for capitalism.
Vance said an agreement with Heartland Co-op would be binding on any of its successors.
“I’d advise the supervisors to next week authorize the county attorney to pull together all the paperwork and talk with a bond counsel,” Vance said.
Reed said further discussions and any resolutions or decisions about the project would be made in the public meetings.
“I’d like this project to be on our agenda every Monday coming up until this gets done, so we can get the ball rolling and check on progress,” said Reed. “I like efficient government.”
Vance said Friday was his official last day as director of FEDA, and he’s started his new job as a Jefferson County sheriff’s deputy.
“But I’ve made the commitment to follow through with this project,” he said. “I will be available for this project.”
Hauschel said he would take the county’s offer back to the co-op board.