To salvage deal generating 262 new jobs, Woodford board seeks gas line

The Woodford County Economic Development Authority took steps Friday toward bringing a natural gas line to the Midway industrial park so the county won’t lose a company expected to provide more than 200 jobs.

Without that line, the county was in danger of losing Lakeshore Learning Materials, a California company that had announced in August that it would bring a new distribution and storage center to Midway that would create 262 jobs.

John Soper, chairman of the economic development authority, said that Lakeshore first brought up the issue of a natural gas line after the company had already announced that it would locate in the Midway Station industrial park off Interstate 64 and north of downtown Midway.

“We had told them where we were in trying to work with Columbia Gas to get gas there, but they went ahead and made their decision,” Soper said. “I guess as they got into the building process, they realized it was very critical for them to have it. That’s what sped the situation up.”

Asked if the availability of natural gas was a deal breaker for Lakeshore, Soper said: “Yeah, I think natural gas turned into a deal or no deal. I think it’s safe to say.”

But Soper added: “The cash flow works. The payroll taxes will always exceed what the expenditures are to bring the gas in.”

Lakeshore hopes to close on the $2.09 million purchase of the Midway property on Tuesday, said Bill Moore, an attorney who represents the authority. The gas would be used for heating purposes and not for production.

Soper said bringing a gas line from the “Toyota line” to the industrial park would cost $2.8 million. Columbia Gas is committed to putting up $700,000. The $2.1 million balance would come from three entities: $300,000 from the economic development authority, $450,000 from the city of Midway and a $1.35 million economic development bond grant from the state of Kentucky.

“What I think is going to happen is Lakeshore will front the $2.1 million,” Soper said, and then the state and Midway would repay Lakeshore.

To recoup its $450,000, the city of Midway has asked for future profits from the potential sale of 22 acres of industrial land that the authority has under option from Dr. James and Marilyn Roach. The authority approved a pledge that will be drafted by Moore.

The Midway City Council will discuss the gas-line deal at its meeting on Monday.

The authority also voted to approve the release of $300,000 it holds in escrow for the purpose of bringing natural gas to the park, provided that the funds are deposited along with other resources provided by Lakeshore Learning, the city of Midway, Woodford Fiscal Court, the state of Kentucky and “any other contributing entities” that benefit from bringing the gas to the park.

Lakeshore plans to buy a 42-acre lot owned by the economic development authority plus a neighboring 18 acres owned by Homer Michael Freeny Jr. Lakeshore wants the 18-acre lot to be rezoned from agricultural to industrial.

Lakeshore plans “to immediately purchase the 18-acre tract as soon as it can be rezoned,” Moore said.

Lakeshore also wants an option to buy an additional 15-acre tract also owned by Freeny. The authority has a one-year option on the 15-acre tract, but the authority might purchase it from Freeney to make it available for purchase by Lakeshore for an additional two years, Soper said.

The authority also voted to seek a zone change and an expansion of the urban service boundary for the two tracts under option from Freeney.

Lakeshore is a leading distributor of educational materials, and the Midway site would be its second U.S. distribution center.

Natural gas in the industrial park would also be available to American Howa of Kentucky, a car parts factory that is under construction in the park.

Soper isn’t sure why natural gas had not been put in the park when it was developed in the 1990s.

“The only thing I can think of was that electricity was so cheap and gas was so high at that time, and they thought everybody would use electricity,” Soper said. “As we know, the pendulum changes, and who would have foreseen what natural gas prices have done in comparison to coal-fired electricity?”

This story was originally published October 14, 2016 at 2:22 PM with the headline "To salvage deal generating 262 new jobs, Woodford board seeks gas line."