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Ottawa commission may OK Coopersville dairy bonds Tuesday
The Ottawa County Commission may vote tomorrow on a recommendation by county staff that all of the county's $31.1 million worth of ARRA-supported construction bonds be earmarked for a new milk processing plant in the former Delphi auto parts factory in Coopersville.
Meanwhile, supporters of a proposed hotel and conference center in Grand Haven are still hoping their project may get a chance to use ARRA construction bonds that are part of the federal stimulus package passed last year to create jobs.
"We hope if there's another allocation" of ARRA Recovery Zone Facility Bonds for Ottawa County, "perhaps they'll look kindly" on the Grand Landing LLC proposal to build a hotel and conference center in Grand Haven, said City Manager Pat McGinnis.
The Ottawa County Planning and Performance Improvement Department has recommended that the entire allotment of ARRA Recovery Zone Facility Bonds/Private Investment for Ottawa County be made available to Continental Dairy, which is planning to build a $100 million milk processing plant in Coopersville that would create an estimated 70 new jobs.
The staff has recommended that the allocation be contingent upon several conditions being met by Continental Dairy, including "securing all sources of financing" and issuing the bond within 120 days.
The ARRA bonds do not represent federal funds given to counties to disburse; rather, the ARRA act is funding reimbursement of 35 to 45 percent of the bond interest, which theoretically should make financial institutions more willing to float the bonds in the first place.
However, despite the advantages of the ARRA bonds, all four applicants for the Ottawa County ARRA bonds have had trouble proving they have firm commitments from financial institutions to provide financing under a bond issue.
The staff report concludes that the dairy plant project "is the closest to being shovel-ready although it still must secure other sources of financing."
Two of the three other projects that applied for the ARRA bonds are Alden Place in Spring Lake and Beechtree Development in Grand Haven, both of which "will require substantially more work before they are shovel-ready and able to pursue bond funding," according to the report. The third proposed project, formally designated the Hilton Garden Inn and Conference Center, "has the potential to create many jobs. However, it has many substantial hurdles to overcome before it is ready to issue bonds," the report states.
The Grand Landing development on a once-blighted industrial site just off U.S. 31 near the Grand River began a couple of years ago and would represent an investment of more than $70 million in condos, retail space and the hotel/conference center. The recession apparently stalled the project after it was about one-third completed, and there has been no progress on the proposed hotel. It would have more than 100 rooms and an attached 20,000-square-foot conference center.
"The financial markets out there are not responding with available capital for a project like this, is the last I've heard," said McGinnis.
"We had hoped by now there would be more construction completed. That was our original plan and our original agreement with the developer. However, we're lagging behind a bit, and we're being patient," said McGinnis, noting that development projects all over Michigan are being hindered by the weak economy.
City officials in Grand Haven have been firm supporters of the Grand Landing project and were "disappointed" by the Ottawa County staff's recommendation.
"We had hoped to see the county award some part of the $31 million allocation … to this part of the county," said McGinnis.
He noted that Ottawa County may be able to obtain ARRA bond allocations to other Michigan counties that go unused. If that happens, the Grand Landing project might have another shot at ARRA bond financing.
McGinnis said the evaluation criteria established by the county for determining use of the bonds "seemed to set up the dairy project in Coopersville as a clear recipient." The city of Grand Haven did not have input on setting the criteria, he said.
Under the Ottawa County criteria, the highest ranked product or service is technology and research, followed in descending order by food processing/manufacturing, alternative energy manufacturing, general manufacturing and service/tourism/hospitality.
"We did provide a resolution (to the county commission) saying we clearly support this project," said McGinnis. "We certainly don't agree here in Grand Haven that (the county) staff is making the right recommendation. However, we recognize it is their job to make that recommendation, and they did a great job summing up their argument and presenting it to the county commission."
Craig Adams, president of Grand Landing LLC, told the Business Journal last week that he believes "our project is a lot more shovel-ready than any other ones, including the dairy."
Adams noted that for the past 18 months, "banks really have not been lending, and particularly, any lending they have done has certainly not been targeted to hotel and conference type facilities."
The ARRA bonds for private business are "an opportunity for projects like ours, that are totally ready to go but for the financing," said Adams.
"We've been approved at all levels," he said. "We have the permits in place; we have guaranteed maximum pricing from contractors; all the site plans and design work has been final-approved by the city of Grand Haven; we have the DEQ funds; we've got cash in the bank to build the (public) infrastructure — we just need to finance the construction of the building itself."
Adams said the hotel/conference center would create 106 jobs, and other jobs might be created by new restaurants built to serve the hotel guests.
Adams said Grand Landing LLC is still working with and being supported by its bank —Comerica — but, he said, "Their hands are tied by (banking industry) regulators."
"We hold some level of hope that this bond authority that Ottawa has given to this dairy may come back, and we may have a second crack at it," said Adams.
Mark Knudsen, director of Ottawa County Planning and Grants, said his staff is requesting use of ARRA bonds not being used in other Michigan counties. He also said he expects other private investment projects to come forward in the remainder of this year to request use of ARRA bonds, if more are allocated to Ottawa County.