 This addition would benefit the grain company in that they would be
exempt from the state's natural gas tax, as well as from sales tax
on materials to expand their facility.According to Ludwig,
Elkhart Grain owns four elevators in Logan County: Elkhart,
Broadwell, Mount Pulaski and Lake Fork. They employ approximately 16
full-time workers, and during farming season they hire an additional
16 to 23 temporary employees.
Last year the company paid out $66 million to local farmers for
their harvested products.
The expansion would apply to the Elkhart facility only and would
be in two stages. The first stage would begin immediately and would
include building one new 550,000-bushel grain storage bin. Another
similar-sized bin would be added at a later date.
Ludwig said that making these improvements to the Elkhart site
would not increase their employee base.
Hamilton presented a handout with the ordinance his company has
written for the city and a map showing the current enterprise zone
and proposed additions to the zone from within the city limits of
Lincoln.
Alderwoman Marty Neitzel immediately questioned the additions in
the city. She wanted to know why he was adding areas on North State
Street and Sixth Street.
Mayor Keith Snyder expanded on this, asking if the parcel marked
as site B on North State Street included the apartment buildings and
trailer park in that area.
Hamilton said that site B was an area kitty-corner from Hardee's,
and Neitzel said that would be the old Clark Station, which is now
abandoned.
The mayor said that, looking at the map, site B started at Riggs
Drive and was actually north of the gas station and included an
all-residential area.
City attorney Bill Bates confirmed that the mayor was correct in
the location according to the legal description.
The mayor said he was concerned and curious as to why Hamilton
had added an all-residential area to the enterprise zone.
When asked about the area designated as site C, Hamilton said it
was property behind the Casey General Store on Fifth Street, and the
mayor once again noted that this was a residential area, not zoned
for commercial use.
As Alderman Jeff Hoinacki examined the map, he noted to the
council that site C also included Postville Courthouse, and again
Bates verified that was correct.
The mayor said he was still concerned about the choice of
residential areas for the zone and wondered if the residents of
those areas had asked to be included. He was told no.
The bottom line is that in order for an area to be added to the
enterprise zone, it has to meet certain criteria, including that the
geographical area has an unemployment rate exceeding 120 percent of
the state average.
In the vicinity of Elkhart Grain, the unemployment rate did not
meet that criterion. Therefore, areas of the city were selected
specifically because of their unemployment rate and added to the
zone so that Elkhart would qualify.
The mayor said it appeared to him that the city was burning up
enterprise zone availability on areas that were more than likely not
ever going to be developed as commercial properties.
Bates said the biggest problem here is that when Hamilton and
Phil Mahler appeared two weeks ago, all they discussed with the
council was Elkhart Grain; they didn't say anything about adding two
sites in the city of Lincoln, and they should have.
Hamilton said it was submitted to the planning commission, and a
council representative should have been included in that commission
and therefore aware of the assignments of the parcels.
Neitzel wanted to know if the city was losing enterprise zone
space permanently by doing this.
Hamilton said that it can always be taken out and placed
somewhere else. He had also noted earlier that even though these are
now residential areas, if someone wanted to develop them as
commercial in the future, they would already be in the enterprise
zone.
Busby said that anyone wanting to develop commercially in a
residential area would have to go through the rezoning process,
basically jumping through a lot of hoops to get the job done. He
wondered why anyone would do that when there are areas available in
the city that are already properly zoned.
Bates asked about the other enterprise zone additions from the
past -- Had they also included parcels out of the city of Lincoln?
-- and Hamilton assured him that they had.
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Hamilton said that if the city has parcels they want added to the zone, they
should let him know. He explained that for him it is a scenario of throwing
darts at a map to decide where to add parcels. If the city can offer him
suggestions of areas to target, it would certainly make his job easier. Bates
said that it seemed logical that Hamilton and Mahler would have come
to the city and asked before they started all this.
The mayor asked that Mahler keep the council updated and informed
early on in the process when areas are added to the zone.
Hamilton said that the procedure has always been to take it to
the planning commission first, then present to the county and city,
but that he understood this was a new council and if they want to
change the process, then so be it.
Neitzel turned the conversation back toward Elkhart Grain
specifically, asking why the city would want to use their zone space
for Elkhart Grain, as the elevator will not be adding any new hires
for the project and no added revenues to the city.
Hamilton said they were a local employer in the county.
But Neitzel interjected: "We're not talking about the county.
This is the city of Lincoln. We're talking about the city."
Hamilton said that the $66 million paid out to area farmers is
being spent in this area.
Bates said he agreed with that, that many of these farmers spend
their money in Lincoln, as do the employees of the elevators.
Neitzel said she knows the elevator is beneficial to the
community, but the bottom line is that the city is doing them a
favor adding them, as there won't be any real growth for the city as
a result. She added that she didn't want to do anything to hurt or
hinder Elkhart Grain, but just wanted it understood that the city
will not benefit from this amendment to the zone.
Busby said he was not comfortable voting on the ordinance as it
was written. He would like to see site B taken out and an area added
that could actually be developed commercially. He suggested that
Hamilton and Mahler get together and look at an area of North
Kickapoo that could be developed.
Hamilton said that if they changed the ordinance, it would have
to be taken back to the planning commission, go through the public
hearing process and then go to the county board as well as the city
council for approval again. He explained that Elkhart Grain's
request was time-sensitive, and this would cost a great deal of
time.
He added that site B could be taken out when he and Mahler have
their next opportunity to amend the enterprise zone, and then they
could add the area Busby is referring to, if it keeps the
unemployment figures where they need to be.
Bates said that he knew it was common practice to take areas out
of the zone, as they have done it in the past. He said he doesn't
know what the state really thinks about it, though.
He commented: "If you add a parcel to qualify Elkhart, then at
the next amendment take it out, aren't they going to catch on to
that pretty quick? I think the process that has been followed here
by Andy and Phil has left the council in the lurch with these
qualifying parcels when there could have been a much better way to
do this."
Alderman David Wilmert said he didn't think the city should
penalize Elkhart Grain for the problems with the process, so he
supported moving forward with the ordinance as written but wanted to
change the notification process for the city before the next
amendment.
Wilmert added, "If we have areas we want put in, then we need to
help them out on that."
Hamilton agreed, saying it would make his job much simpler.
The council finally consented to go with the ordinance as it was
written so as not to hold up or hurt Elkhart Grain, but in the
future the approval process will include notifying the city well
ahead of time before any city parcels are added to a zone in order
to meet state criteria.
The matter can come to a vote next week.
[By NILA SMITH]
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