The Enid News and Eagle, Enid, OK

January 8, 2013

MAPC gives canola plant TIF unanimous nod

By James Neal, Staff Writer
Enid News & Eagle

ENID, Okla. — Metropolitan Area Planning Commission unanimously voted Tuesday to recommend Enid City Commission create a TIF district for a proposed Northstar Agri Industries canola processing plant.

During their special meeting, MAPC members also approved rezoning 80 acres on West Southgate for use by Longfellow Energy LP, an oilfield service company.



TIF proposal

MAPC commissioners approved a resolution recommending the city of Enid create a tax increment district. The district would generate $27 million worth of incentives over 25 years to bring a $200 million Northstar canola processing plant to the city.

Enid Regional Development Alliance associate director Lisa Powell told commissioners Tuesday ERDA has been working with Northstar for more than nine months to make sure Enid would be the final site selected for the new plant.

“We want to help uncover all the resources, facilities and support we can make available for them,” Powell said.

She said the jobs and revenue generated from the canola plant, and the positive impact it will have on agriculture producers, will stretch far beyond the Enid market.

“This is a new industry for Oklahoma, and the economic impact will be felt regionally,” Powell said, “and we’re very excited to be a part of that.”

Clarence Leschied, a business development consultant for Northstar, said the TIF arrangement was one of the key considerations that drove Enid to the top of a list of nine cities that were under consideration for the new plant.

“The TIF is one of the large pieces in the puzzle that has made it feasible for us to locate in Enid,” he said.

Northstar recently completed construction on and opened a $165 million canola processing plant in northwest Minnesota capable of processing 400,000 acres of canola per year.

Leschied said the Enid plant will be similar to the plant currently operating in Minnesota, with one major exception — the Enid plant will have about twice as much production capacity.

The Enid plant will be capable of processing canola harvested from 750,000 to one million acres in Oklahoma and surrounding areas.

Leschied said the plant would be able to process four to five times as much canola as currently is grown in the region, and Northstar is hoping regional growers will increase their canola planting to meet the capacity.

He said canola could be shipped in from North Dakota and Canada to supply the Enid plant, but Northstar’s anticipation is regional growers will increase their canola share in order to supply the plant.

The proposed canola plant would be situated on almost 400 acres between 66th and 78th, bounded by Willow to the north and the BNSF main line to the south, about one mile north of U.S. 412.

Leschied said the plant itself will have a “relatively small footprint,” and the majority of the 399-acre project site will be used to contain five miles of rail track that will bring trains from the BNSF main line into and out of the plant.

Leschied said the five miles of loop track would be privately maintained by Northstar, possibly through a contract with BNSF or Farmrail.

And, he said, other industry interested in building near the Northstar plant also could benefit from the loop rail system.

“The loop track builds a platform for other industry,” he said, “if they’re interested in locating in that part of the city.”

Estimates for the plant investment range from $150 million to $250 million, with TIF compensation ranging from $12 million to no more than $15 million.

Under the terms of the proposal, 90 percent of the increased ad valorem taxes from the TIF district would go toward Northstar’s investment compensation, compensating the city of Enid for infrastructure improvements and interest on both counts.

All tax-receiving entities would continue to receive ad valorem revenue from the current assessed value of the 399 acres on which the plant will be built, plus 10 percent of any increase in ad valorem revenue due to the plant’s development over the next 25 years.

Tax-receiving entities affected by the ad valorem tax drawn from the TIF district are: Pioneer-Pleasant Public Schools; Garfield County, through the county general fund and the county school levy; Garfield County Health Department; city of Enid sinking fund; and Autry Technology Center.

Once the TIF expires, the tax-receiving entities could see a combined net gain in their ad valorem revenues of up to $2.2 million per year, according to figures provided by The Public Finance Law Group.

Over the 25-year term, the TIF district is projected to generate $50 million in ad valorem revenue. Of that $50 million, $5 million would go to the tax-receiving entities over 25 years, and $45 million would pay for Northstar’s compensation up to $15 million, the city’s $12 million in infrastructure improvements and 25 years’ worth of interest on the obligations to both Northstar and the city — more than $23 million.

If the resolution is approved and the TIF district created, Northstar plans to have the canola plant fully operational by March 2015.

The TIF district proposal next will go before the Enid City Commission for final consideration.



Rezoning

MAPC commissioners also unanimously voted Tuesday to recommend rezoning 80 acres of land at 525 W. Southgate for use by an oil field service company.

The tract under consideration is situated south of Southgate in the section immediately east of Van Buren. The tract would be bounded on the west by the Union Pacific main line, which runs east of existing businesses at the intersection of Van Buren and Southgate.

Dallas-based Longfellow Energy LP requested the land be rezoned from A-1 general agriculture to I-2 light industrial, to be used as an oil field equipment storage yard and operation offices for the company.

According to a company statement filed with its request, Longfellow Energy intends to use the Enid yard as the company’s divisional headquarters for operations in the Mississippi Basin south and east of the city.

The Longfellow division headquarters would service “thousands of acres of leases” between Enid and Hennessey, and “would create little new heavy equipment traffic through Enid by virtue of the fact nearly all of their work would be south of Enid,” according to the company’s statement.

The acres under consideration for rezoning lie just outside of Enid city limits, which follow the west right of way of the Union Pacific tracks along that section, north to Rupe. Existing light industrial properties lie to the west and north of the tract under consideration.

Enid planning administrator Chris Bauer told MAPC commissioners Tuesday county commissioners have requested Southgate be upgraded to an industrial street to support the project. The upgrade would require increasing the street construction to eight-inch concrete with acceleration and deceleration lanes at least 200 feet from the BNSF main line.

An engineering site plan for the street improvements still is under development by Longfellow Energy.

Other considerations that will have to be addressed if the rezoning is approved include access to sewer and water services.

Bauer told MAPC commissioners an existing six-inch city of Enid water line, which currently ends near Van Buren and Southgate, could be extended east to service the Longfellow yard. An existing city sewer line also possibly could be extended to meet the yard’s demands, Bauer said.

MAPC commissioners voted to recommend Garfield County commissioners rezone the 80 acres. The matter now will go to the county commissioners for a final decision.