HomeMy WebLinkAbout6C(6).docx4S°UT88
Department of
Community Investment
1865
Memorandum
Tuesday, February 11, 2014
TO: Redevelopment Commission
FROM: Chris Fielding
SUBJECT: Ethanol Plant
DCI staff has had the privilege of working with Noble Americas through their acquisition of the
shuttered Ethanol Plant. This has been a long and complicated project that our community will see
come back to life in mid -2014. Noble Americas completed the acquisition process in late 2013 and
immediately began completing their due diligence to assess (1) why the plant went bankrupt and (2)
how to become more efficient through state-of-the-art upgrades. It became increasingly obvious that
if the plant is not upgraded significantly it was only worth its value in scrap and that the City would
have to be a willing participant if was to return to production.
The DCI staff has been included at every turn and has witnessed the projected cap. ex. costs rise
from $12 million to now $28 million with work already well under way and a projected start up date
of June 1, 2014.
The final negotiated public investment figures we anticipate being included in a development
agreement include up to $2,000,000 to purchase equipment through the BPW public bidding
process that will be leased back to Noble America for 5 years at a base rate of $100,000 per year
with potential escalations contingent upon jobs created and sustained over a five year period (please
see attached petition). The equipment to be purchased is a corn oil extraction unit that will make the
plant more sustainable and more resilient to the margins of the commodities market. In addition, in
a worst case scenario the RDC has the ability to remove the unit from the plant and resell it to
recoup TIF investment.
DCI staff is requesting that the RDC approve moving into negotiations of the terms of a development
agreement to be brought back for approval at your next meeting.
Details:
227 W. JEFFERSON BLVD. SOUTH BEND, IN 46601 1 P: 574 - 235 -9371 1 FAX: 574 - 235 -9021 1 SOUTHBENDIN.GOV
Expen
Estimated Acquisition cost
Amount
$8,000,000
Estimated Capital investment/upgrades
$28,000,000
Real Property Tax revenue (2012)
$170,276
Personal Property Tax Revenue (2012)
$398,064
Waste Water revenues
$2,000,000+
Average hourly wage
$27.00 per hour
Potential jobs created
50 -60
227 W. JEFFERSON BLVD. SOUTH BEND, IN 46601 1 P: 574 - 235 -9371 1 FAX: 574 - 235 -9021 1 SOUTHBENDIN.GOV
227 W. JEFFERSON BLVD. SOUTH BEND, IN 46601 1 P: 574 - 235 -9371 1 FAX: 574 - 235 -9021 1 SOUTHBENDIN.GOV