County moves forward with KIP improvements

Published: Tuesday, March 15, 2011 5:05 PM CDT

LA PORTE ­— County officials Monday approved a $6 million dollar loan to replace more than a mile of railroad track leading to Kingsbury Industrial Park, the first step toward the park’s transition into a regional logistics hub.

“I believe this vote is the most important one the County Council has cast in several years,” said Councilman Scott Ford, before the council unanimously approved the loan at a special meeting. “La Porte County’s future is directly linked to logistics, distribution and transportation. This new inland port will lead to new jobs and give La Porte County a much needed boost in this recession.”

Even though no businesses currently have commitments to locate at Kingsbury, Tim Gropp, executive director of the Greater La Porte Economic Development Corporation, said several prospects want to see the project done before they make plans.

“Companies won’t come unless the rail is there and ready to go,” Gropp said. “We have 45 days to finalize the documents, but even that may be too long for some of our prospects to get started. They all have timelines of their own...It’s time to move from concept to reality because people want to see progress.”

This “performance mortgage,” combined with $3 million CSX Transportation has pledged to create a rail interchange for its trains to access the site, will make the industrial park more attractive to potential customers, Gropp said. County officials have worked with the state Department of Agriculture on marketing Kingsbury Industrial Park as a food logistics hub. With everything in place, the park would become the only site statewide with the ability to quickly import produce from as far away as Central America, as well as export Indiana beef and dairy products.

The $6 million will be paid out of the county’s Major Moves Construction Fund, according to the council’s resolution to finance the project with Halfwassen Group LLC of Milwaukee, Wis. The loan will be repaid over 15 years using property tax income generated by the increase in assessed property value, otherwise known as Tax Increment Financing. The money will be deposited into an escrow fund, to be disbursed as work is completed. Halfwassen will be responsible for constructing the rail line into the park and making any improvements required by federal and state law, and all payments on that work will be approved by the county.

The county will hold control over the 203 acres of land owned by Halfwassen Group along Stillwell Road leading north to the industrial park from the CSX rail line until the loan is repaid.

“This project wouldn’t happen without Major Moves funding. The council has been very clear that they want accountability with this money,” Gropp said. “If (Halfwassen Group) can’t generate $6 million in assessed property value, they would either have to write the county a check, or the county could take the land. We hope neither will be necessary and that this logistics project will be successful.”

The county no longer has a $3 million commitment for improvements on Hupp Road it garnered from the state when ICS Logistics originally committed to building a $50 million refrigerated warehouse and distribution center at the industrial park, Gropp said, only because there needs to be a plan to increase jobs before they pledge support. ICS, a Jacksonville, Fla., company that provides transportation, warehousing and maritime services to national and international customers, is still considering the site, however.

“When we have another commitment, we will be able to go back with another proposal,” Gropp said.

Councilman Ford, who has worked in the logistics industry for 25 years, said the county’s five-and-a-half year journey toward creating an intermodal logistics facility should soon pay off.

“We need to support CSX and the Halfwassen Group with every advantage our area can provide, because large-scale logistics start-ups are very challenging,” he said. “A successful start-up goes a long way in telling the logistics industry that we are the best site for new development in the Midwest.”

http://heraldargus.com/articles/2011/03/17/news/local/doc4d7ee13d11474540582828.txt