A $1 million request was brought to the Scottsbluff LB 840 Application Review Committee Friday, Feb. 21 by Crossroads Cooperative Association.
Crossroads Regional Manager Shain Shimic told the committee that Crossroads is prepared to invest $6-8 million in developing a new grain facility on property it owns south of U Street in Gering. Shimic said recent changes in the Union Pacific Railroad strategic operating plan and development of the Gering Industrial Park make this an ideal time for Crossroads to make changes to its facilities. An overall project estimated at $11.2 million would involve $2 million of equity from Crossroads and $5 million through financial institutions. Economic opportunity funds from the State of Nebraska will total $100,000 and Crossroads will also be applying for $1.6 million in Tax Increment Financing (TIF) funds.
The funds requested from Scottsbluff would be targeted to re-establishing rail service to the cooperative and extending a rail spur through the industrial park area. The City of Gering has committed $500,000 in LB 840 money targeted to job creation and public works and rail infrastructure development. Additionally, Gering will be spending $1 million toward public works infrastructures.
“Crossroads would like to partner with the cities of Gering and Scottsbluff in the development of the Gering Industrial Park and be the catalyst and the first of many future businesses to locate in the park,” Shimic said.
Gering City Planner Annie Folck said work on the industrial park has been going on for quite some time. Folck said the Gering and TIF funds would be used to extend existing water and sewer lines from Third Street to the east end of the Crossroads property. There will be a lift station required for the sewer lines to get to the nearby treatment facility. Folck said the rail work involved would be $2.8 million and an additional $2.2 million would be targeted to other infrastructure improvements that will serve the north end of the Industrial Park as a whole.
“We’ve really struggled with which comes first, the chicken or the egg,” Folck said. “Do you speculate on additional utilities in hopes that someone will come in and utilize those? Or, do you wait until you have a project on the line? ... As the City of Gering, we’re extremely excited for this opportunity, not just because this is a great project for Gering and a huge capital investment that’s going to be there for years to come, but because this really gets our whole industrial park up and running and off the ground and gets it to where it really needs to be so we can continue to site off property and continue to look for tenants.”
Committee member Dave Schaff questioned whether the application would qualify under LB 840 requirements considering the extent of which infrastructure improvements for the City of Gering are involved. One municipality cannot grant funds to another through the LB 840 program.
“To me, it seems like one of the reasons we couldn’t (help fund) the industrial park originally is because we couldn’t have Gering be the applicant for LB 840 funds,” Schaff said. “It had to be a qualifying industry. It seems like we’re kind of rerouting that a little bit to where we’re using Crossroads to be the applicant for Gering. I guess from a legal stance where they’re adding four employees for a $1 million LB 840 request, it seems like we’re just trying to skirt around the system a little bit. I think that’s something we need to look at from a legal stance.”
Adam Hoesing, attorney for the City of Scottsbluff, said with other issues surrounding the request, it may be up to the committee’s discretion, but there are questions that still to be asked.
The committee declined to take action on the request Friday, indicating that they will be presenting some of those questions and others and will continue to revisit the request.