6C(6).docx - Laserfiche WebLink

Home Browse Search

4S°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