$1.5 million land buy OK'd
At a special meeting Thursday, the city council voted 5-1 to spend just more than $1.5 million to buy an 84-acre parcel on Highway 51 south of the city.
The city's option on the land expires Dec. 31.
The council earlier this month authorized the purchase if there was a signed development agreement between the city and SHINE Medical Technologies.
If the two sides reach an agreement, it's unlikely to happen before the end of the year. Thursday's action allows the city to buy the land without any conditions, meaning that if a deal with SHINE falls through, the city will own the property.
A startup company now based in Middleton, SHINE plans to produce molybdenum-99, an isotope needed for detecting heart disease and staging cancer. Mo-99, as it is called, decays to produce technetium-99m, which is used in approximately 50,000 nuclear medicine procedures each day in the United States. The U.S. now depends on other countries for its supply of Mo-99.
In Rock County, SHINE could join another medical isotope maker, NorthStar Medical Radioisotopes, which plans to build a $194 million plant in Beloit and create more than 150 jobs by 2016.
SHINE and Northstar are two of just four U.S. companies supported by the National Nuclear Security Administration as it pushes for a more reliable and diverse supply of Mo-99.
While SHINE and Northstar are start-up companies, the other two are not. Both Babcock & Wilcox Co. and GE Hitachi Nuclear Energy are well-established companies that are major players in the world of nuclear reactors and services.
SHINE CEO Greg Piefer said his company is particularly interested in the 84-acre lot the city will buy because it is across Highway 51 from the Southern Wisconsin Regional Airport. Piefer said the airport would be used for up to 10 air shipments a week of Mo-99.
He said the company also likes the parcel's proximity to Blackhawk Technical College, from which he expects to get many of the production workers who would earn $50,000 to $60,000 per year.
The 84-acre parcel also would make SHINE or some other company eligible for a U.S. Department of Agriculture loan guarantee. Piefer said that is critical for his start-up company, which hopes to go into production in late 2014 or early 2015. That option doesn't exist in the city's neighboring 224-acre site.
SHINE also is considering Stevens Point and Chippewa Falls for its $80 million production facility. Janesville, he said, has an edge because it is nearer to Madison and the intellectual property generated on the UW-Madison campus.
"I'm obviously super happy with the council's decision," Piefer said Thursday. "It's all I can hope for at this point, and I think that by doing this, the council believes we can get the deal done.
"We're most of the way through the development agreement, and I think this is an endorsement that means we can get it done."
City Manager Eric Levitt said the city would continue to work with SHINE on the agreement, which is expected to include tax increment financing and other incentives tied to company benchmarks.
Levitt said the city would close on the land in February. He and other city officials have said that if the SHINE deal falls through, the 84-acre parcel would be a prime location for other businesses.
Economic Development Director Vic Grassman said $18,000 per acre is not out of line with other recent sales of agriculture land developed for other uses. In fact, he said, the going rate near urban corridors appears to be about $25,000 per acre.
Before the vote, resident K. Andreah Briarmoon told council members that the price was too high. She said that if the council really has $1.5 million to spend, it would be better targeted to the general welfare of a community that has suffered economically.
Levitt noted that the money to buy the land will come from TIF accounts and not the city's general fund and that companies locating in the TIF district pay development costs back through property taxes.
In the case of SHINE, the property taxes would be significant, as the $25 million facility would—according to a state Supreme Court ruling—be taxed at its construction cost because there are no comparable facilities in the area.
For SHINE, annual property taxes of more than $600,000 would be used over a period of time, typically 10 years, to pay the city back for it land acquisition and development costs.
Councilman Tom McDonald cast the lone dissenting vote on the land acquisition. He did so because of two concerns.
One is financial, he said, but because the development agreement with SHINE is still under negotiation, he can't discuss it publicly.
The other, he said, is adding to the city's extensive inventory of land for economic development while depleting valuable agricultural land.
"Economic development is important, but so is farmland and natural resources," he said after the meeting. "The question becomes economic development at what costs to the future?"
Representing the public-private Rock County 5.0 economic development initiative, Mary Willmer-Sheedy cheered the city decision's to buy the land.
"SHINE is a priority right now for the city," she said. "There are multiple businesses that Rock County 5.0 is working with.
"If the SHINE deal for some reason or another does not go through, it still gives us an incredible piece of land we can use for other projects."
Last updated: 7:02 pm Thursday, December 13, 2012