AgriTech rail park no longer just wishful thinking

After some 30 years of wishful thinking by business leaders and several years of hard work by Great Falls Development Authority members, city officials and others, work on the Great Falls AgriTech Park is underway northeast of Great Falls.

In a recent flurry of action, the GFDA completed a tax increment financing plan with the city to pay for the project's infrastructure work; signed contracts with three Great Falls contractors for road paving, rail spur construction and extending of utilities; and sold lots to the first four developers.

Two weeks ago, project work started. Crews from United Materials beefed up the main street running through the project, laying down a two-inch asphalt overlay on 18th Avenue North from 52nd Street to 67th Street. Last week, Energy West crews were piecing together the casing that will protect their natural gas pipes underneath the rail spur to be built soon.

Two other local contractors soon will start building the rail spur and extending water and sewer lines to the quiet 113-acre first phase near Malmstrom Air Force Base and to the northeast of Steel Etc., the last project in the earlier North Park industrial park. The contractors expect to have most of the infrastructure completed by the end of the year, GFDA President Brett Doney said, except for a flasher rail warning signal being delayed by changes in federal regulations.

"After many years of planning, hard work and investment, a heavy industry, rail-served park is finally being developed, thanks to the cooperation of dozens of people," Doney said.

The timing is great, he said, with the national economy gaining steam after a slow recovery from the Great Recession.

"When completed, it will significantly improve our chances of recruiting heavy industrial customers that will spur more job creation," Doney said. "We see many opportunities to attract new business investment to Great Falls for business start-ups, expansions and relocations."

Some of the four first-phase AgriTech lot purchasers, two of which are headquartered locally and two of which are international companies, are expected to start construction this year.

When infrastructure work is completed, GFDA will have another "shovel-ready, rail served" lot available, and in fact, such a developer could buy and start development now on the lot, which Doney said could be divided into 20 or 31 acres.

It might well be an agricultural manufacturer or distributor that buys that lot, Doney said, noting that a GFDA consultant is completing case studies making the argument why the Great Falls area is the best place to locate manufacturing plants in several niche agricultural markets. Such agricultural processing plants could help area producers by giving them another option for their products, he said.

But despite the AgriTech park name, the GFDA would welcome other developers needing an industrial, rail-served site, he said, adding that Great Falls also has had success attracting energy support and steel fabrication plants.

Rail service benefits manufacturing and distribution companies that import a lot of bulky raw materials or export heavy finished goods more than 500 miles, Doney said. Such companies tend to provide good-paying jobs and to invest a lot in the community on professional services, construction and repairs and industrial supplies.

As the dust settles on the infrastructure and development of that first grouping of six lots (and five developed projects), and further interest develops, the GFDA will consider extending the infrastructure for four more lots totaling about 60 acres to the east along 67th Street North, Doney said.

"We expect that $8 million in the investment in the industrial park will lead to more than $65 million in facilities built by the private sector when the 10 lots are filled in," he said.

Here are details about the first four companies that purchased AgriTech lots:

•Pacific Steel and Recycling, a regional company with headquarters and two operating facilities in Great Falls, bought 57 acres at the industrial park and plans to relocate its local recycling and steel operations there, moving the steel plant from what has become a busy retail area on the Northwest Bypass.

•Montana Specialty Mills, which processes and markets oilseed and other grain-based products, bought 20 acres and plans to move from its current location to a larger facility in the industrial park. That will free up land on the west bank of the Missouri River for retail development.

•Helena Chemical, an international maker of fertilizer and other agricultural products based in Tennessee, has purchased two lots totaling 23 acres. It's expected to start work soon on a 50,500-square-foot wholesale distribution facility employing 14 people. The company could build a second, 30,000-square-foot facility within a couple of years to mix and blend agricultural products, employing another five workers, company officials say.

•Ruedebusch Development & Construction, a Madison, Wis., based contractor has purchased an 11.5-acre lot on which it will build a 60,000-square-foot distribution center. It will lease it to a global-based, non-agricultural corporation that has not yet been named.

Both Helena Chemical and Ruedebusch expect to break ground on their buildings this fall and be operations by late 2016, Doney said, adding that neither Montana Specialty Mills nor Pacific Steel have set groundbreaking dates.

Jeff Millhollin, president and CEO of Pacific Steel and Recycling, said his company was the first buyer of an AgriTech lot and also is investing $2.2 million toward the rail spur construction, for which it will be repaid as the industrial park develops.

"We stepped up to make that rail investment because we've seen industrial parks in other communities in which we operate get off to a slow start until rail is laid, and then they take off like crazy," Millhollin said.

"This will be a terrific project for Great Falls," he added. "Rail-served industrial lots are rare, and having an industrial park with available lots served by rail, other transportation and utilities will be a great draw for the community in attracting new industry."

Millhollin said Pacific won't start construction on its new facilities this year but could do so next spring, depending on when it sells its facility on the Northwest Bypass and whether scrap metal prices rise.

Doney said he was pleased to award the infrastructure construction contracts to three Great Falls-based companies that are corporate supporters of the GFDA, but which received no local bidding preference.

"They're great local contractors who happened to submit the lowest bids," he said. "It's a bonus to be able to award them contracts, because these companies have helped our economic development projects happen."

The GFDA awarded the infrastructure construction projects to:

•United Materials of Great Falls, a $305,577 contract, to pave 18th Avenue North from 52nd to 67th streets. The work involved placing a 2-inch overlay on an existing city road to beef it up to handle heavy vehicles.

•Shumaker Trucking and Excavating Contractors, a $2,086,000 contract, to build a rail spur extending a current BNSF Railway line into the industrial park.

•Falls Construction Co., a $663,000 contract, to extend water and sewer lines.

"We're pleased to get a little bite out of this industrial park project, which will help the community grow," United Materials President Lonnie Anderson said.

He said United Materials tries to keep its paving work within a 60-mile radius of Great Falls, to keep expenses down and allow employees to sleep at home on nights.

"We support the GFDA, which is attracting business and better paying jobs to Great Falls," Anderson said. "The AgriTech Park will set the stage for industrial development in that empty field by Malmstrom."

Falls Construction President Harley Huestis said his company supports the GFDA because "they're out there trying to increase business and industrial opportunity, which will grow the population and increase jobs. After all, a rising tide raises all ships.

"The AgriTech park will help round out the community's business landscape, providing a setting for heavy industry that needs rail," he added.

Huestis said Falls Construction was able to submit a competitive bid because of the Great Falls location and good timing.

"We were just finishing work at Malmstrom and wanted to keep our workforce intact and local, without having to go out of town looking for work," he said.

Rail park long time coming

Business officials started seeing a need for a rail-served industrial park in the 1980s, as the existing North Park industrial park began to fill, Doney said. Rail service is essential to certain manufacturers and distributors, he said, and more affordable if done as part of a big project that spreads the infrastructure costs.

Doney said he was amazed when he took the top GFDA post in 2006 that Great Falls, with its rich industrial and agricultural history, had no available heavy industry, rail-served building sites.

A strategic plan developed by the GFDA in 2009 with financing provided by the Defense Department after one of Malmstrom's four missile wings was closed, placed more emphasis on the need for a new industrial development park.

"We knew we needed to diversify and to develop higher wage, private sector jobs, and that manufacturing had to be a big part of that," Doney said.

The GFDA put 1,100 acres in northeastern Great Falls under option to buy with the Loy Family Trust in 2010, but is focusing initially on 192 acres divided into 10 lots, Doney said.

The long-term option gave the GFDA time to plan, raise money and negotiate a tax increment financing plan with the city of Great Falls to finance the project, he said.

Under the tax increment agreement, up to $6.7 million in property taxes generated by private development in the AgriTech park essentially will be funneled back into the park to pay back money spent on such public improvement projects as roads, rail and utilities for up to 13 years.

After that span, local government taxing jurisdictions will benefit from increased property tax base as well as the new jobs created by the industrial park, Doney said.

The city faces no financial risk from the tax increment financing plan; Pacific Steel and Recycling should earn a 4 percent return on its investment and the GFDA simply expects to break even, Doney said.