The city of Marion is proposing two deals totaling up to $26.5 million in economic development revenue bonds for baked goods supplier Café Valleyand redevelopment at the former Thomson plant.
A public informational meeting is scheduled for 7 p.m. Tuesday where city officials will present the plans to the Marion City Council.
Café Valley plans to start building a new facility at the former Thomson site, 3301 S. Adams St., and initially hire 100 workers in 2014.
Local officials have been mum about economic development incentives for the project and remained so even after legal notices for Feb. 5 public hearings were published Friday in the Chronicle-Tribune that outlined many of the details.
Mayor Wayne Seybold said he could not comment until the information is presented officially.
“Not until we get to the meetings,” he said.
City Development Director Darren Reese also declined to discuss details before the presentation in front of the city council. However, he said the legal notice shows the overall plan is divided into two sections — “Series A” and “Series B.”
He said Series A outlines how the city funds a transaction that would have the Grant County Economic Growth Council acquire the entire Thomson property at 3301 S. Adams St.
As outlined in the legal notice, the city would issue up to $14.5 million in taxable economic development revenue bonds and lend all or a portion for the Growth Council to do six different tasks:
- Refinance prior bonds of the city
- Relocate AMVETS Post 5, 841 E. 38th St.
- Pay for the cost of issuing the bonds
- Help pay for Café Valley’s new bakery manufacturing facility on 20 acres, or one-third of the former Thomson plant’s site.
Café Valley’s plan calls for demolition of part of the former Thomson plant. Mayor Seybold said Thursday their planned facility overlaps with the AMVETS location and the city was looking to help the club relocate.
Reese said Café Valley would get access to the land as soon as the deal was authorized. He declined to discuss how much money the company would be putting forward and property owner Lester Lee’s involvement.
“We’ll lay it out in much more clear terms on Tuesday,” he said.
Reese also declined to discuss the terms of repayment for the loan.
As outlined in the legal notice, the loan may be repaid by “certain rental revenues,” a pledge of tax increment revenues, the city’s “distributive share of county economic development income taxes,” and a “special benefits tax” by the Marion Redevelopment Commission “under a certain lease” of the project.
Series B would be a “straightforward” tax increment financing (TIF) deal for Café Valley, Reese said.
TIF captures property tax revenue generated by new investment and cycles it back toward the development. The city would issue up to $12 million in taxable economic development revenue bonds to allow Café Valley to capture the TIF.
Tim Eckerle, executive director of the Grant County Economic Growth Council, declined to discuss details Thursday, but said the meeting would also include an update on Café Valley’s effort to receive a federal New Markets Tax Credits allocation.
Company and city officials have said securing financing for the project is dependent on those credits.