One development project in Emporia is officially dead, but another one that has been up in the air still could move forward.
Both projects have been in the works for several years, but while the incentive compliance agreement for the Emporia Plaza project that was to be anchored by a Lowe’s home improvement store officially expired last Saturday, the Renewable Energy Group’s Emporia biodiesel plant could see a future in town.
One indication of the biodiesel company’s interest in Emporia was the announcement Thursday of its initial public offering of 7.2 million shares of stock at $10 per share.
“They think they’re going to raise about $86.5 million,” said Kent Heermann, president of the Regional Development Association of East Central Kansas. “Twelve million of that is to acquire a facility, ... and they are going to use the remainder for working capital and capital expenditures. I’m curious to know if those capital expenditures include Emporia or not.”
Another indicator of REG’s interest is that the company has abided by its obligations to the city set forth by the incentive compliance agreement.
“The original incentive compliance agreement expired a year or so ago, and they got an extension,” Heermann said. “The second extension will expire on July 1, 2013. There’s a bit of a lag time from once you design a plant and let bids to build it, so between now and summer is the window of opportunity to start getting something going.”
The REG project first came to Emporia in April 2007 when the RDA announced it had reached a deal with the company to build a $65 million plant in Emporia. The plant, when completed, should be able to produce 60 million gallons of biodiesel fuel per year, using soybean oil supplied by Bunge. According to earlier accounts published in The Gazette, the plant should employ about 30 people with an estimated payroll of $1.3 million.
Construction on the plant officially began with a groundbreaking ceremony in June 2007. Originally, the plant was intended to be up and running by September or October of 2008.
Tightening credit markets, difficulty in funding biofuel projects and rising commodity prices led to the plant being put on hold in March 2008, after the company had invested $18 million in the project. Estimated completion time was pushed back to 2009. After the original compliance agreement expired that year at the end of August, the company reached an agreement with the city for an extension. The weak economy continued to hold back a continuation of the project. Provisions in the new agreement included extending the deadline for completion and adding a special assessment against the property to allow the city to recoup costs for infrastructure improvements.
Since then, REG has kept up its end of the bargain, and the company still expresses interest in opening a plant in Emporia.
“REG Emporia is about 25 percent complete, and it is still an important location for the company,” said Alicia Clancy, manager of corporate affairs for REG. “I do not have a timeline for construction or completion. ... We’ve appreciated working with the city of Emporia and the economic development group, and the facility continues to be an important part of our strategy.”
She added that the plant has been included in all of the briefings the company gave in preparation for its IPO and continues to be a showcase of REG’s strategic project list.
Heerman said he has made calls to Daniel Oh, REG’s chief operating officer, but has not yet heard back.
“We’re optimistic that this is good news,” he said. “We’ll see, but at least it’s news.”
The plan to bring a Lowe’s home improvement store to Emporia, however, has failed. That plan was announced in the summer of 2008 as the Emporia Plaza, a development that would use Lowe’s as an anchor and would include a smaller anchor, a strip mall and other businesses such as restaurants and the possibility of housing developments. The Planned Unit Development agreement for the Emporia Plaza, including provisions for a Tax Increment Funding district and a Transportation Development District, took effect in 2008 and lasted until February 2009. In that time initial construction on the project — located on property at the north end of Industrial Road — was to have started. The weak economy led to Lowe’s putting the project on hold, and a one-time extension on the project was granted by the city.
That extension expired on Jan. 14, so the project is officially dead.
“The only way that can be revived is if they reapply to go through the planning and zoning process again,” Heermann said. He was not aware of any plans to do so.
booker5m (anonymous) says...
Lowes never was a good idea!
January 20, 2012 at 2:51 p.m. ( permalink | suggest removal )
neighbor (anonymous) says...
I never believed Lowes was fully involved in the proposed project, all speculation, name dropping if you will by the developer to get what he wanted changed and be able to develop in a residential area rather than in areas where access and roadways wouldn't have been such an issue.
January 20, 2012 at 3:17 p.m. ( permalink | suggest removal )
slimbolen99 (anonymous) says...
I guess the big shots over in the NW part of town got tired of driving 50+ miles to the nearest lowes, so they decided to try and bring one here? Don't they know they have several great hardware/lumber stores here in town? Sutherlands, Mark II, Bluestem, Ace Hardware...I'm sure there are others.
January 20, 2012 at 3:44 p.m. ( permalink | suggest removal )
JustWondering (anonymous) says...
If the company has already spent $18 million on this plant and it is 25% complete, how do they plan to finish the other 75% for $12 million?
Plus they are holding $74.5 million for working capital and capital improvement? What capital improvements should you need to make in a new facility?
Just Wondering?
January 20, 2012 at 5:40 p.m. ( permalink | suggest removal )
booker5m (anonymous) says...
I feel and maybe wrong that plant is blowing smoke.
January 20, 2012 at 8:50 p.m. ( permalink | suggest removal )
solong (anonymous) says...
I am curious too Heermann, well, just a little.
January 22, 2012 at 5:44 p.m. ( permalink | suggest removal )
scarlett01_98 (anonymous) says...
umm am i reading this wrong? there is going to be a biodesiel plant built in a area full of homes and shopping and restaurants? ummm why not build out by bunge??
January 22, 2012 at 6:28 p.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
I think the work done on that plant so far was the most expensive part of the cobstruction costs. I heard from the construction guys,(when they were here), that those two tanks inside the bldg were over 3 million dollars.
Also this company has several plants and the money being raised is for company wide ops.
It sure would be nice to see construction resume though.
Maybe they could change it into a switch grass operation. We certainly have the land area for that crop. And that stuff can be harvested several times a year with little or no fertilizer.
January 22, 2012 at 6:36 p.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
just wondering,
I think the 12 million was for a different plant.
January 22, 2012 at 6:44 p.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
Although the company is having problems for sure.this is an older article about new orleans.
http://www.nola.com/news/index.ssf/20...
January 22, 2012 at 7:19 p.m. ( permalink | suggest removal )