Archive for Thursday, August 4, 2011

Feasibility study finds big benefits from CR1 industrial park

An initial plan for the 237 acre industrial park shows that eight buildings and a detention pond can be built on 144 acres of the parcel. TranSystems’ preliminary engineering study estimated the cost to develop the 144 acres to be about $13 million. The Tonganoxie City Council discussed splitting the plan into three phases to help spread out the cost of the project.

An initial plan for the 237 acre industrial park shows that eight buildings and a detention pond can be built on 144 acres of the parcel. TranSystems’ preliminary engineering study estimated the cost to develop the 144 acres to be about $13 million. The Tonganoxie City Council discussed splitting the plan into three phases to help spread out the cost of the project.

August 4, 2011

A marketing and feasibility study on the potential of the County Road 1 industrial park gave the city of Tonganoxie and Leavenworth County ample reason to get the 237-acre site south of the city developed.

The $39,395 study, paid for by the Leavenworth County Port Authority with a $9,849 contribution from the city, estimated the park in its first 15 years would return $9.28 million in revenue to the city from land sales, excise taxes and property taxes. It estimated the park would produce another $9.4 million in revenue over that period for USD 464 and $5.27 million for the county.

“You need to get that park shovel-ready as soon as possible” Mark Waterhouse of Garnet Consulting, the study’s author, said July 26 at a special Tonganoxie City Council meeting. “The biggest thing you need to do here is make it real.”

The study further estimated that after 15 years, 3,067 employees would be working at the park, creating an additional 2,150 indirect jobs.

With those benefits, which Waterhouse emphasized were based on conservative formulas, he encouraged the city to work with Leavenworth County, Leavenworth County Port Authority and other possible partners to get thepark developed.

That was the next step, Tonganoxie Mayor Jason Ward said, adding the study was important in validating assumptions about the park’s potential.

“I think we needed that kind of study to have a comfort level with moving forward with developing the park,” he said. “It was necessary to have that type of information before making decisions on budget priorities.

“It’s encouraging there is the potential for a $9 million return to the city by a conservative estimate.”

Job creation at the park was important because that could attract new residents to Tonganoxie without relying on growth to the east or west or fuel price stability.

Ward agreed the city needed partners to develop the park and noted the study gave the county and port authority reason to join with the city in extending infrastructure to the site, which the engineering firm TransSytems estimated in a 2009 study to cost $14 million.

“It’s pretty clear just one entity — the city, county, port authority, even a private developer — would have a really difficult time developing the park,” he said. “If the council wants to move forward on this, we have to find a partner.”

Waterhouse said a developed Tonganoxie park would offer commercial lot sizes within the 65 to 100 acres that firms looking at the county have wanted. The inability to fit prospects in that “sweet spot” was costing the county jobs and an expanded tax base, he said.

Waterhouse said the study assumed the current mill levy and valuation rates. He did not include land donations or tax abatement — two incentives offered firms that have looked at the site. But he said it also didn’t include revenue sources such as utility sales and franchise taxes the city would realize.

Among the marketing and implementation suggestions Waterhouse shared was that the city and its partners should:

• Getting “certified-site” status for the park immediately once it is developed so that potential tenants would know its shovel ready.

• Consider recruiting a satellite community college campus or vo-tech school to the park, perhaps as the first tenant. That has been done at other sites he has worked with and vo-tech schools can be very attractive to firms looking for skilled employees.

• Create a park association, similar to the subdivision’s neighborhood association, which would eventually manage the park.

• Consider getting the park designated as a foreign trade zone.

In June, the city council agreed to have BG Consultants study the cost of extending the limited infrastructure to the park needed to get one lot ready for development. The study is to be completed in late August with preliminary results available in two to three weeks.

Waterhouse said there was merit to the approach and he had seen it used successfully elsewhere.

The study’s strong encouragement to move ahead with the Tonganoxie site was in contrast to the mixed recommendation for a proposed park with a railroad connection near Leavenworth’s Abeles Field. It had potential, the study found, but advised against building a proposed rail spur to the site because there would not be enough demand to cover the expense.

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