NEW ALBANY — Last week, several New Albany City Council members pledged to diligently work on solutions to keep the General Mills plant open.
On Tuesday, the council will be asked to give its blessing for a $7 million bond package Mayor Jeff Gahan’s administration hopes will stave off the closure, which General Mills announced Jan. 8 could happen within 18 months.
Other votes will be needed, and the exact terms of the financing package haven’t been set, but essentially the city would foot a $7 million bond to be used for the purchase of new capital equipment for New Albany’s fifth largest employer.
General Mills must keep what is commonly known locally as the Pillsbury plant open for a minimum of five years after the bond is issued, according to the resolution the council will cast a ballot on during a special meeting at 7:30 p.m. Tuesday.
“We have assembled a business retention and factory-modernization package for our friends at General Mills to consider,” Gahan stated in a news release issued Friday afternoon.
“Our goal is to keep the New Albany facility in continuous operation for as long as possible.”
The council voted last week to form a joint committee with the administration to consider ways to keep the plant open. Gahan said the city was informed by General Mills the closure was due to “excess capacity” in the General Mills supply chain.
The plant — which opened off Grant Line Road in 1959 — employs about 400 people, and paid $661,000 in local property taxes last year.
According to the administration, General Mills has paid $7 million in local property taxes over the last decade, and also pays New Albany about $340,000 annually for wastewater services.
Councilmen Scott Blair and Bob Caesar were appointed to the joint committee, and they stated their support for the resolution in the administration-issued release.
“Losing these good jobs would genuinely be a huge loss for the families of the employees and the community, one that we want to prevent,” Caesar said. “It will be difficult to replace the value of these jobs in our community.”
The agreement also includes a pledge the city will provide tax abatements on any new construction and modernization for the plant.
“What we’re offering we feel like we can afford,” Blair said.
As with any bond issue, the redevelopment commission and city council would have to vote on the financial terms of the agreement. The resolution to be considered Tuesday gives the administration the OK to compile a financial study and finalize the terms of the deal.
The bond would most likely be paid back primarily with tax-increment financing funds, said David Duggins, director of economic development and redevelopment for the city.
Some Economic Development Income Tax funds could also be used to payoff the bond issue, he added.
“It’s that important to the city of New Albany to put our best foot forward and offer what we’re offering to save those jobs,” said Duggins when asked if it was feasible to offer $7 million to keep one company.
General Mills was contacted by the News and Tribune today for comment, but the business has yet to provide a statement.