KENTLAND — Extending the economic development agreement with Select Milk Producers (Fair Oaks Farms) for two years was approved by one of the four boards needed to ratify extension.
The Newton County Board of Commissioners voted 3-0 Nov. 2 to approve the two extension with Select. The extensions still needs to be approved by the county council, the redevelopment commission and the Regional Water and Sewer District.
A joint meeting for all the boards had been planned for Friday, Nov. 13 to act on the extension, but the commissioners went ahead and voted early in hopes of getting the Indiana Office of Community and Rural Affairs (OCRA) to reconsider pulling its $2 million grant for the project.
“Select was not able to meet the deadlines for the current agreement and did not meet the employment numbers for the OCRA grant,” said County Attorney Pat Ryan.
Ryan added that if the commissioners extend the agreement it would allow Select time to pursue economic development in the county by possibly attracting some agribusiness to the TIF district.
Commissioner Tim Drenth made a motion to approve the 2-year extension and authorize President Kyle Conrad to sign a letter of support for the project to OCRA in hopes they would delay the employment requirements for the grant two years as well. The motion was approved unanimously by the board.
No clauses to the extension were discussed by the commissioners, but those may come up at the Nov. 13 joint meeting.
Select is seeking a 2-year extension on the economic development agreement with the county which called for the county to do $29 million worth of infrastructure improvements (a new water and sewer plant) to the Fair Oaks corridor, while Select Milk Producers would build a hotel and a cheese plant along with possible other attractions at the farm.
The hotel has been built but the cheese plant part of the deal has been pushed back several times already, and currently it looks like that part will not come as Select has switched gears from talking about building the cheese plant to instead attracting other agribusinesses to its industrial park, which resides in the county’s TIF district.
The infrastructure work for the agreement was paid by the county selling of $23 million of bonds and then an additional $6 million in grants. The lender for the project was the State’s Revolving Fund (SRF), however, that loan came with milestones that had to be made, which included a completion date of the cheese plant by April 2021.
Select could not reach that milestone so more than a year ago the county boards (commissioners, council, redevelopment commission and water and sewer district), agreed to push it back two years to have the new completion date for Select Milk Producers’ proposed cheese and whey manufacturing plant be at the end of 2022.
Now that goal seems impossible and Select Milk is asking the county to push back the agreement another two years.
Select is still holding up its deal for the bond payments, paying more than $200,000 a month which covers the pant’s operational costs as well as the payments for the “A” bonds, even though Select is only using about $15,000 a month in water and sewer.
The concern from several county officials is that if at any point Select goes bankrupt, then the county’s tipping fees would be the backup for paying off the bonds. If tipping fees are not available or not enough, then the bonds will be paid off by a property tax rate that would go into effect.