Everybody likes a bargain — even industrial recruiters.
And the announcement Tuesday of an expansion of Keystone Foods and its location along with Southern Cold Storage to a site at Steele Station and Airport roads could be considered a “two-for-one” deal, Mike McCain, executive director of the Gadsden-Etowah Industrial Development Authority, said.
In addition to adding about 200 jobs and retaining 520 jobs with a pay back to the city of Gadsden in revenues in about two years, McCain said the project, which had been given the name “Project Freeze,” gives the city something else — more than 500 acres of land ready to market to industry.
As part of the inducement to get Keystone Foods, which has a facility in East Gadsden, to locate a new 185,000-square-foot fully cooked and further processing facility at the intersection of Steele Station Road and Airport Road, incentives given by the city included discounted land.
McCain said the city sold the 98 acres to Keystone for about half what the city paid for the property, or about $5,000 an acre, because other cities the company was considering were offering land for that price. “We had to do that to maintain parity with competing sites,” McCain said.
The project’s allocated portion of the projected cost of four-laning Airport Road to Steele Station Road, installing traffic signals and extending water and sewer lines to the site give it a price tag of about $1.7 million, city officials said.
The city will pay for the infrastructure improvements with state funds and will seek additional grants as well, Mayor Sherman Guyton said. The city also will use existing revenues to fund the improvements. It has a line of credit that can be used.
Utility work will be bid in 60 to 90 days. The city will pay some of the cost of the sewer and water extension along with the Gadsden Water Works and Sewer Board. Road work will be bid in 90 to 120 days and should be completed by next summer.
Keystone officials said construction of the plant should be completed by next fall.
McCain said during a three-year period, the project will generate about $2.3 million for the city in occupational licenses fees — a 2 percent tax on wages — sales taxes and other taxes related to the project. He said the project will pay for itself after two years, based on revenue projections. “It’s a good pay back period,” he said.
McCain said in recruiting industry a project needs to recoup its investment in three years. He said the revenue projections are conservative and do not include “multiplier” effects or tax revenues the IDA cannot calculate. McCain said the financial return the IDA is projecting does not include what will happen to the existing Keystone plant. Keystone officials said if they decide not to operate the old plant, they will assist the IDA in selling it.
Guyton and Frankie Davis, director of governmental affairs and economic development for Gadsden, said the jobs at the two facilities would pay average salaries of more than $31,000 a year plus benefits, which they said would help improve the city’s and the county’s per capita income.
McCain said the lowest salary at Keystone is $9.75 an hour plus benefits. Keystone is adding 150 jobs, and Southern Cold Storage, which will be adjacent to Keystone, will create 40 jobs. Keystone is investing $118 million, and Southern Cold Storage is building a $9 million facility. “These are not minimum-wage jobs,” McCain said.
In making the announcement, Guyton said it was a “new day” for Gadsden. “We now have some industrial property to develop. We have a big plant going out there, and four-laning that road (Airport Road), that’s going to attract other things,” Guyton said.
McCain said he already started marketing property along Airport Road to potential industries. While he has been able to “promise” improvements, industry prospects now will be able to see the work being done or completed. “That has a whole lot more credibility than a promise,” McCain said.
The biggest cost involved in the project is the four-laning of Airport Road and extending water and sewer to the site, which is projected to cost about $6 million. The company wanted the road four-laned because there will be a lot of truck traffic. “We saw it as an opportunity for us to four-lane it to help develop the other property,” Davis said.
He said Keystone wanting to locate there and having new and retained jobs enabled the city to apply to the state for industrial access funds since it would open up additional land for development.
Guyton said state Sen. Larry Means, D-Gadsden, was instrumental in the city getting $2 million from the state toward the cost of the infrastructure improvements. Only $11 million in funding was available statewide, Davis said.
Guyton said if the city had not gotten the funding, the project would have been difficult to afford. Davis said the project was the “catalyst” for the city getting the road four-laned and water and sewer extended to that area. “It would have been very hard to justify the expense to extend that infrastructure without the grant assistance, and this project provided that opportunity,” McCain said.
By Andy Powell, Times Staff Writer