City eyes state, local funding for industrial park improvements

McCOOK, Neb. — City leaders advanced a proposal earlier this week which would solicit upwards of a half-million dollars in taxpayer funds to help with costs associated with a combined public and private improvement project at the industrial park behind Valmont.

The City of McCook is interested in making improvements to Ravenswood Road ahead of anticipated truck traffic associated with future tenants and developers for a new agricultural chemical handling and distribution facility preparing to set up camp in the industrial park are hoping to offset some of the expense to install a private rail spur.

Prior to receiving unanimous approval from City Council, City Manager Nate Schneider said the city was trying to wrap up a $500,000 grant application to submit to the Nebraska Department of Roads Economic Opportunity Program. The grant requires a 25 percent match of $125,000 and city staff sought council approval to use $75,000 in LB840 Motor Vehicle Tax funds.

Schneider said that the city had approximately $190,000 in motor vehicle funds set aside and wasn’t comfortable with utilizing any more than half of that amount.

“We kinda sat down as a group internally and discussed what kind of a number we were comfortable with. We felt like, based on our conversation with NDOR, we probably needed to have something a little more than 25 percent. That’s why $75,000 is the number we’re looking at. That’s about 33 percent of the match with respect to South Street and Ravenswood Road,” said Schneider, adding he believed this project was a worthy use of the motor vehicle tax funds given the need to see more progress at the industrial park.

Schneider said the city knew the road needed to be fixed in order to handle the additional truck traffic it anticipated with the Next Generation agricultural chemical facility and any subsequent tenants. He indicated the industrial park’s slow pace of growth was, at least in part, due to improvement needs.

“I do think part of that’s because we have some requirements that have to be met before they can actually start their development process. We know that before lot four is allowed to develop they’re going to have to have that street completed. This will be lot number three when Next Generation comes in. It’s not, in my mind, a question of if - it’s when it’s going to occur,” said Schneider.

The city isn’t willing to commit more than $75,000 to the industrial park improvement project but nothing would stop the sales tax funded McCook Economic Development Corp. from chipping in more, according to Schneider.

“This is the maximum amount that I’m proposing on the city’s side. If the EDC would like to go ahead and contribute more, that’d be great,” he said.

Schneider indicated he had discussed how the remaining financial responsibilities for the grant would be divvied up with Next Generation President Todd Reed, but didn’t offer specifics. He also indicated city tax revenue wouldn’t be used to assist the private development but state tax revenue could be.

“We are ready to go ahead and move forward. I have spoken with Todd Reed, he has given me a number that he feels comfortable with on his side for his portion of the grant. Just to reiterate, we aren’t going to utilize any LB840 funds for the rail spur. We didn’t use it for the TIF portion of the project. It is a private project. At the same time, if there are additional funds that can be secured it would make sense to go ahead and allow them to utilize that for purposes of their project. But we need to get our costs paid first and that is $233,000. Anything over that, at that point in time, that could be used by Next Generation for their part of the project,” said Schneider.

Schneider reiterated any potential tax assistance for the Next Generation development would be secondary to the expenses associated with the street improvements. It is possible NDOR awards less than the $500,000 application amount and the private project would only benefit from funds awarded in excess of the street improvement costs, according to Schneider.

The latest estimate from BNSF puts the rail spur expense at approximately $750,000.

“No matter what, he is going to put a lot of money into the spur, it’s an expensive project,” said Schneider.

The approved redevelopment plan for the Next Generation facility estimated costs in the $9 million range. It received City Council approval in February to receive up to $720,000 in financial assistance from Tax Increment Financing.