Heartland facility could be ready by fall 2015
Heartland Co-op CEO and general manager Tom Hauschel told the Fairfield school board Monday if all the agreements between governmental agencies and the co-op’s board are timely, the co-op could pour concrete in November and have its proposed grain storage elevator facility functioning by October 2015.
Hauschel and Todd Phillips, executive vice president of grain and risk management at Heartland, visited with the school board to provide information and answer any questions. Jefferson County supervisor Lee Dimmitt and Fairfield Economic Development Association Executive Director Adam Plagge accompanied them to Monday’s school board meeting.
Because the school district is one of the taxing bodies affected by a proposed 15-year Tax Incremental Financing district the county is offering to Heartland, the school board needs to approve any agreement. However this meeting was only informational.
In December, Heartland Co-op representatives told the county board of their interest in building a 4.4 million bushel capacity grain storage elevator compound and rail shipment operation at Highway 34 and Nutmeg Avenue.
Hauschel introduced himself as a Kansas-raised farm boy, and Phillips is an Eldon native.
Heartland Co-op, with administrative offices in West Des Moines, has 5,300 co-op owner/farmers and all its facilities are in Iowa.
“If farmers do business with us here, they will have the opportunity to buy membership in the co-op and earn returns based on the volume of business they do with us,” said Hauschel.
“In Phase I and II, we’re going out 15 years with a TIF to capture revenue to pay for improvements,” said Dimmitt. “We need 15 years to assure enough funding to pay for county road improvements, estimated at $3.7 million. But because it goes beyond 10 years, the school district needs to sign-on to the agreements.”
Jefferson County is planning road improvements on routes to the elevator facility.
All local taxing entities will continue to receive property taxes based on the land. Heartland has bought 162 acres and 150 acres will remain in row crops. The remaining 12 acres will be developed with grain elevators and roads for trucks and the facility’s rail siding.
The TIF money captured will be only the taxes paid on the elevators and any other structures/facilities built by Heartland to improve the 12 acres.
Dimmitt said the agreement would be structured so that during the first 10 years of the TIF district for Heartland, any excess tax collection will go to Heartland Co-op. After 10 years, from year 11 through 15, any excess tax collection will go to Fairfield Community School District, up to the district’s regular levy rate. Above and beyond the school district’s levy rate, any excess goes to the county to pay for road improvements.
“I believe this is a great deal for producers in the region,” said Dimmitt. “It allows us to upgrade infrastructure at Heartland’s expense.”
School board member and farmer Jerry Nelson said it’s been a long time since this large of an investment had been made in the county.
“It’s great the tax money on the land still remains, and the TIF is only for improvements, “ Nelson said.
Dimmitt said the county supervisors had approved Monday morning for 185th Street to be upgraded this summer, from Highway 1 to Pleasant Plain Road.
“It’s part of this year’s construction plan, and not part of the improvements for Heartland, but more road improvements will be coming,” said Dimmitt. “We’ll be concreting Nutmeg Avenue to the bypass. We’ll install a light signal for the railroad underpass. We’ll concrete Osage Avenue on the other side of Highway 34 to Glasgow Road. We’ll widen the intersection at Nutmeg. We’ll straighten out the Salina Road T-intersection to make it safer.
“The property owners around will not see any tax increase. We’re only capturing Heartland’s improvements to pay for the road upgrades.”
School board member Phil Miller asked how Heartland’s facility would affect existing grain businesses.
“We’ll be adding new markets for farmers to access,” said Phillips. “Using the BNSF Railroad, trains can take grain to Texas cattle feed operations, west to the coast or south and east.
“Competition is good,” he said. “Other businesses in the area have the same opportunities we do. We can even be a new market for them.”
Asked why Fairfield and Jefferson County were chosen, Hauschel replied the area doesn’t have a large co-op presence.
“We studied the region and believe we’ll draw on a six-county region,” Hauschel said. “We’re building a high-speed elevator that will save farmers driving to Mississippi River terminals and BNSF can compete with barges. We can offer varied markets.
“Our facility will save farmers time sitting in lines to unload, save wear and tear on driving long distances and we’ll pay a premium on grain.”
Phillips added that a large amount of grain locally produced is used for feed and ethanol in southeast Iowa.
Hauschel said the next step in the process is getting approval of Heartland Co-op’s board of directors.
In other business Monday, the school board:
• Approved seeking bids for two 2014, 65-passenger school buses as requested by auxiliary services director Fred McElwee.
“We are fortunate to be able to replace two buses each year, which allows for a full fleet rotation in 15 years,” he said.
• Approved ballot language to renew the district’s 67-cent Physical Plant and Equipment Levy when it expires. The district has asked the county auditor for a special election April 1 for voters to approve continuing the levy, which is required to be renewed by a vote every 10 years.
“The PPEL fund is how we pay for new buses every two years,” said Superintendent Art Sathoff.