NASH ROAD PROJECT APPEARS DOOMED

A proposed $60 million Nash Road Redevelopment project that once involved an Arkansas steel company appears to have collapsed when the steel company found a better deal at home.

There are those in the know who believe the project was nothing more than a ploy by the company to get a richer package in Arkansas.

An individual familiar with the project, who asked not to be identified, said, "It looks like we were used. But that happens more often than people think. It's business."

The group proposing the development spent an estimated $4,000 to $5,000 for planning and developing the project.

The plan was to develop a 383-acre tract of land near the Cape Girardeau Regional Airport.

"We spent months on this thing," Cape Girardeau Chamber of Commerce President John Mehner said.

The Chamber of Commerce planned a Nov. 17 open meeting to raise interest and provide details of the proposed project. Mehner said there is a 99 percent chance that meeting will never come about.

The proposed plan involved redevelopment of land south of Nash Road, west of Interstate 55 at the southern boundary of Cape Girardeau County.

The property is owned by Phegley Farm Inc. and is used for agricultural purposes.

Because the property is relatively flat, near railroad tracks and an interstate highway, it is likely Cape Girardeau County can lure other prospective investors.

But Mehner said swinging deals like the one that appears to have gone sour aren't easy to put together.

"It's a good site for development, but there are a lot of cities offering all kinds of incentives to get companies to go with them," Mehner said.

Mehner referred questions about the name of the steel company to Cape Girardeau Industrial Recruitment Executive Director Mitch Robinson.

Repeated attempts to contact Robinson Thursday were unsuccessful.

Private redevelopment costs for the Nash Road Redevelopment project included building an industrial complex, purchasing or transferring equipment with a value in excess of $34 million and hiring about 200 full-time employees.

Land acquisition would have cost $1.3 million, site improvements $2.3 million and industrial building construction $22.4 million. The total redevelopment project, including public and private portions was estimated to be in excess of $60 million. This includes the purchase of the land, site improvements, buildings and equipment.

Several area agencies and schools would have benefited from the property tax money generated from the project.

Presiding Cape County Commissioner Gene Huckstep said the redevelopment project was to be financed in the same manner as the M & W Packaging Plant on Highway 177 north of Cape Girardeau.

"That was the first the county did like the one going on now," Huckstep said. "That project helped people near the company quite a bit. People from the Nell Holcomb School resisted the project at first, but now they're all for it."

Once Nell Holcomb officials realized there would be a financial windfall from the property tax M&W generated, there was a change of heart.

"Four years down the line they started to get 100 percent taxation and were very happy about that," Huckstep said.

Nell Holcomb was able to use the money to renovate its educational facility.

The proposed redevelopment site near Nash Road is part of the Regional Economic Growth Center and was specifically identified in the Overall Economic Development Plan completed in 1992.

That plan identified the development of an industrial park near the Cape Girardeau Regional Airport. An industrial area that already exists next to the airport would have complemented the new development project.

The proposed redevelopment area qualifies for tax increment financing because it is classified as a blighted area under Missouri's Tax Increment Allocation Redevelopment Act.

Because there is no street layout, water supply or sewers, the area is deemed blighted. The act provides for tax increment financing in areas considered blighted or ripe for economic development.

Through tax increment financing, money for the project would have been generated from tax revenue payments rather than real-estate taxes.

A tax increment note in the amount of $2.33 million was to be issued to finance the improvements.

The note would have been tax exempt and secured with revenues pledged from a special allocation fund. The note was expected to be retired within 10 years.

Depending on interest rates and the redevelopment agreement, the county could redeem the notes and issue bonds upon completion of the redevelopment project.

The theory of tax increment financing is to attract private developments with needed public improvements, such as water, sewer and streets, the value of the redevelopment area would increase. This would generate more than enough new tax revenues to retire debt from public improvements.

The tax increment note would carry interest in the range of 6 percent. The issuance date of the note was projected to be Dec. 5. No interest on the note would have been paid until Jan. 30, 1997. The first principal payment was scheduled for Jan. 30, 1997.