Archive for Wednesday, October 5, 2011

Tonganoxie City Council closing in on decision on CR1 industrial park’s fate

October 5, 2011

In the coming weeks, the Tonganoxie City Council hopes to get more figures for its, and the public’s, consideration on the cost of developing the County Road 1 industrial park.

In the last month, the council has acquired an estimate of nearly $2 million for the cost to make 40 acres of the park shovel ready of one or two industrial tenants. It subsequently learned that there is enough cash in city’s sewer and water capital accounts to pay for the $225,000 cost of extending a water line to the park and the $280,000 needed to link the site to the city’s sewer system via a force main.

But there are no other city funds flush with cash to help pay for the estimated $700,000 upgrade to 2,100 feet of 222nd Street, the $400,000 needed for earthwork site preparation, the $260,000 to extend gas service to the site or a contingency fund.

To help with that remaining $1.41 million expense, city financial adviser Tom Kaleko suggested as possible options a quarter-cent increase in the city’s special-use sales tax, a $1 a month surcharge on water and sewer customers and hikes in the franchise fees the city’s electrical, gas and cable providers pay to do business in Tonganoxie.

Kaleko suggested the city develop a business plan within 60 days based on those or other developed options. If the council was unable to agree on a plan, he advised the city sell the property — a suggestion council membes endorsed.

The council is to get figures Monday on just how much Kaleko’s measures could raise toward the cost of preparing the CR1 park for development. That, in turn, should indicate how much mill levy support would be needed to prepare the site.

Councilman Chris Donnelly, who is also chairman of the city’s industrial park committee, has been the council’s point man for much of the recent CR1 park discussion. The committee brought the concept of an affordable scaled-back package of infrastructure improvements to the council, and Donnelly has been vocal about the city’s need to get something going at the site or get rid of it.

His concern, which other council members share, is the ongoing expense to the city from the park’s purchase. The city acquired a $1.77 million temporary note to pay the balance owed on the 237-acre site west of 222nd Street. Service on the note, which comes due in 2013, is $25,575 per year.

In the purely legal sense, the city can afford the extra debt of developing the park.

According to Kaleko’s written report last week, the city by statute has $3.87 million in additional debt authority, enough to pay for the industrial park and a new police station, the other big ticket item before the council.

But as Donnelly hinted during the Sept. 26 discussion on the industrial park, finding room in the city’s debt limit is only part of the equation. The industrial park’s development price tag might be too much to ask of city residents as three of the possible funding sources — the sales tax (which would require voter approval), the utility rate surcharge and dedicated mill levy — require some pain from residents. Donnelly and other council members want those costs to residents defined and made public while they consider the park’s future.

Should it decide to move forward with the CR1 park, the council would like to further trim the $1.41 million development cost by finding partners. Donnelly said the gas company has been approached about helping extend a gas line to the park. Company officials listened, but he was not optimistic they would agree to the expense.

A bigger and more likely partner would be Leavenworth County, either through direct participation or through the Leavenworth County Pork Authority.

Leavenworth County Commissioner John Flower doesn’t discount the county helping develop the site but indicated that and other investments only should be made after the county undertook a process in which new County Administrator Patrick Hurley has expertise.

“I, without reservation, always say we need to determine what our priorities are (and) then invest to make things happen,” he said. “One of the things I’m very hopeful Mr. Hurley will guide us in is strategic planning and establishing priorities.

“It’s predicated on dollars and cents. I’m reluctant to spend anything until we know what our priorities should be.”

One thing a strategic plan would surely consider is benefit, and a CR1 park proposal would come armed with a study released in August that estimates the county would see a $5 million benefit from the CR1 industrial park in its first 15 years, while the city and USD 464 would both realize more than $9 million.

Flower said the $5 million benefit was based on assumptions, which might not apply, but that he found the study worthwhile and agreed with its overall conclusions.

“I think there is money in this deal,” he said. “The question is how much money do we put in there to make it happen.”

Should the council move ahead with the park, county cooperation will be needed. The 2,100 feet of 222nd Street to be improved is not in the city limits and cannot be annexed, Kaleko told the council last week. That’s a complication because the city can’t issue bonds for improvements not in the city, he said.

There are ways around that problem with the county’s cooperation, it was agreed. But council members also suggested the county’s contribution could be some or all of the $700,000 street improvements.

Flower said such an approach had merit.

“That would make sense,” he said. “We work on our part, and they work on their part.”


Old_Vet 6 years, 8 months ago

Get rid of the "money pit". The industrial pipe dream park was a bad idea and we're throwing good money after badly spent money.


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