Council agrees to proceed with Solo Cup bond issue

After hearing from several parties about the benefits of attracting tenants and jobs to the former Solo Cup plant, City Council voted unanimously last night to approve a resolution of intent allowing the issue of up to $65 million in bonds for real and personal property improvements.

The bonds would be issued in phases to the developers of 1.35 million square feet in and around the nearly 1 million-square-foot Solo Cup plant owned by Warren Davis Properties, according to Economic Development Director Mary Lilly Smith.

Only one member of the public, Steven Reed, objected to the plans. He said that dividing the property could prevent the city from securing a single tenant to fill the space. He also objected to a first reading bill connected to the resolution that would allow outside legal counsel to draft the incentives package. City staff, however, said Warren Davis Properties would be responsible for those legal fees.

Patrick Harrington, the listing agent for Warren Davis Properties, said the former plant, which ceased operations in March, would need to be split up and renovated to attract multiple tenants.

He said the average prospect for filling the Solo Cup plant needs between 75,000 and 250,000 square feet. Renovating the roughly 60-year-old facility could help bring long-term jobs to the area.

“There's 1,200 parking spaces there, and I would like to see those fill up,” Harrington said.

Smith said the issue of limited liability bonds would put all of the liability on the developers, who want to take advantage of the real and personal property tax abatements. The resolution states that the tax abatement on real property would be 100 percent for a 10-year period and 50 percent for the following 15 years. A 50 percent personal property tax abatement on equipment purchases also would be available for 10 years.

Smith said the city of Springfield collaborated with several organizations, including the Springfield Area Chamber of Commerce, to put together the incentives package to attract investment in the city.

“We have an opportunity here to fill a big, empty building,” Smith said, adding that a default on bonds by developers wouldn't hurt the city’s credit rating.

Rob Dixon, manager of business development for the chamber, said the incentives were needed to remove any obstacles or concerns those considering the property might have.

“There is no other community in the state that we know of that has a vacant building of this size,” Dixon said. “This is a unique situation that requires a unique response.”

Mayor Jim O’Neal said offering such incentives is exactly the kind of thing the city should be doing to bring jobs and investment to the area.

“With this, there is very little to risk and a lot to gain,” O’Neal said.

Under state statutes, Industrial Development Revenue Bonds can be issued by local governments to finance industrial development projects. Upon issuance of the bonds, the owner transfers ownership to the issuing body. Bond proceeds are then used to fund project improvements. After the bonds have been repaid, the title is then transferred back to the original owner.

At its peak, the Solo Cup facility employed 1,200 workers, according to an explanation to City Council that came with the resolution. In June 2010, the company announced its plans to cease operations.

For more city beat coverage, look to the Dec. 19 print edition of Springfield Business Journal.[[In-content Ad]]