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According to a recent economic impact study, government investors in Mallard Fox Creek Industrial Park are enjoying an annual return of 67 percent. The governmental entities financed the $9.8 million Mallard Fox bond through Tennessee Valley Authority in-lieu-of-tax income. According to a county official, all of the entities transferred their final TVA payments toward the bond. Decatur, which holds the bond, will use that money to pay off the bond indebtedness in December.
67% return at Mallard Fox
Morgan Economic Development Association president pushing to build second park
By Eric Fleischauer
In the corporate world, an annual return on investment of 10 percent gets smiles; 20 percent gets cheers. The government investors in Mallard Fox Creek Industrial Park, according to a recent economic impact study, are enjoying an annual return of 67 percent.
That’s according to an economic impact study by the Morgan County Economic Development Association that looked at the cumulative costs and tax income in 2006 to Morgan County, Decatur, Hartselle, Priceville, Somerville, Trinity, Eva and Falkville.
The study was timed to coincide with an EDA effort to pitch a new industrial park for near Thompson Road and Interstate 65 at Hartselle. The project would require governmental entities to replace the bond that they will retire this year with another one.
EDA President Jeremy Nails would not specify the amount of bond money he would request for the I-65 project. He said the industrial park EDA hopes to create would require the purchase of 1,800 acres.
The governmental entities financed the $9.8 million Mallard Fox bond through Tennessee Valley Authority in-lieu-of-tax income. According to a county official, all of the entities transferred their final TVA payments toward the bond.
Decatur, which holds the bond, will use that money to pay off the bond indebtedness in December.
According to the economic impact study, prepared by The University of Alabama in Huntsville, total tax receipts to the governmental entities exceeded the annual $845,000 bond payment by $5.8 million in 2006.
Incorporate the amount of abatements given to companies locating at the industrial park and the governmental entities still cleared a combined $2.7 million in 2006.
The study did not delineate the rate of return for the entities separately.
Not only is the bond about to be paid off, but some of the 10-year abatements granted to tenants are ending. While they can obtain additional abatements on expansions, they cannot renew the abatements on original projects.
Tenants at the park include Bailey PVS Oxides; Feralloy; Hexcel; Independence Tube Co., Inc; Mi-Tech Steel; Monarch Steel; Neo Industries; Nucor Steel Decatur; OCI Chemicals; United Launch Alliance and Worthington Steel. Friedman Industries and Nucor Steel’s galvanizing line are under construction.
The central location of the I-65 site within Morgan County could make it an easier political sell. Mallard Fox is in the northwest corner of the county, close to Decatur and Trinity but distant from the other contributing governmental entities.
“To have all the communities agree to work together to get the funding (for Mallard Fox Creek) was a very unique idea, but the mayors, councilmen and commissioners made it happen,” said Lynn Fowler, chairman of EDA. “It has raised the quality of life in Morgan County and has had a significant impact on our schools.”
The political question Nails faces is whether he can coordinate that political cooperation again.
Nails said he hopes to seek authorization for a bond issue “very soon.”
“We’re moving forward assuming it’s going to happen,” Nails said. “We’re working hard to get a consensus. The project is a big undertaking.”
The economic impact study did not incorporate expenses other than the bond payments. It looked at sales and property taxes generated by the tenants and their employees, and indirect employment attributable to the Mallard Fox Creek tenants. It assumed that half of the people employed there own a home, and the average value of that home was $94,000.
According to the report, the park contributed $4.7 million in educational taxes to the affected school districts during 2006.
At the end of 2006, according to the study, there were 1,630 direct and 2,240 indirect employees of Mallard Fox tenants. The study estimated about 60 percent of those employees reside in the Decatur Metropolitan Statistical Area, which encompasses Morgan and Lawrence counties.
The average annual salary of direct employees, according to the study, is $68,256.
Nails said the proposed industrial park he is pitching to local governments would be dramatically different from Mallard Fox, mainly because it would lack barge access. He said he does not know whether it will have rail access. The current park has both.
“It’s going to be an entirely different concept,” Nails said. “I see it as a first-class park, though. We want this to be a jewel for Morgan County, just like Mallard Fox Creek is.”
He expected tenants to be light industrial. He said he hopes to attract automotive suppliers and manufacturers of products developed at Huntsville’s Hudson Alpha Institute for Biotechnology, scheduled to open this year.
“Those products have to be built somewhere,” Nails said. “A tenant like that would really benefit this area.”
The park, he said, would be built in phases. According to Hartselle Mayor Dwight Tankersley, the first phase would be northwest of the intersection of Thompson Road and I-65.
Ownership of the park remains a question. The Decatur-Morgan County Port Authority purchased the Mallard Fox land when it was formed in 1987, but under state law port authorities only have jurisdiction within three miles of the river. The proposed I-65 park would fall beyond that limit.
Alabama 67 intersects I-65 about three miles from the Tennessee River.
State Sen. Arthur Orr, R-Decatur, and Rep. Ronald Grantland, D-Hartselle, introduced legislation last week that would eliminate the three-mile limit, giving port authorities jurisdiction throughout their home counties.
Mallard Fox is a major driver for economic expansion in Morgan County, but not the only one. Nails said over $560 million was invested in 2006, creating a total of 432 jobs.
Expanding industries saw the bulk of growth. Twenty-eight industries announced expansions totaling $560 million in investment. Among those announcing expansions in 2006: Toray Carbon Fibers America, Nucor Steel, 3M Co., Wayne Farms, Solutia, Micor Industries, Summit Tree Stands, The Boeing Co. (now United Launch Alliance), Lakeland Industries, JIT Industries and J&M Signs.
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