By CYNTHIA AUKERMAN, Winchester News-Gazette reporter
The incentive package Randolph County put together for Cardinal Ethanol was developed when Cardinal had not made a decision about where to locate. There were some Cardinal board members who favored a site near Farmland; some favored sites near Portland or in Darke County.
Greg Beumer, director of Randolph County Economic Development, said, "This was a very competitive atmosphere."
The county originally agreed to back a $10 million bond, but the company raised enough private money that the bond guarantee was not needed.
However, the county has pledged $300,000 in Economic Development Income Tax money, and Union City, Ind. was asked to contribute $125,000. The public money being contributed to Cardinal has no strings attached, Beumer said. However, he said Cardinal officials want to use the city and county money to make improvements that would benefit citizens of Randolph County, such as upgrading County Road 600 E, which runs along the property where the ethanol plant will be built.
Beumer said Winchester was not asked to contribute money to the incentive package because the proposed location, near Harrisville, was much closer to Union City than Winchester. Also, Cardinal may use some of Union City's infrastructure, such as tapping into the town's water supply.
Beumer said the spinoffs from Cardinal's plant would benefit Union City in terms of workers hired and money they would spend in town.
The possibility of using Union City's water supply is still in the exploration stage. A city council member said the city would have to build a new water tower in order for the city to supply water to Cardinal, or perhaps the company would build its own water tower.
"There are a lot of unanswered questions (about water supply)," Beumer said. "The company is still in the process of doing due diligence."
A city council member has asked why the city has to contribute $125,000 to Cardinal Ethanol if the company has attracted enough private investors. Beumer said the company's prospectus included an announcement of support from local governments, and the plan couldn't be changed now without several expensive, time-consuming filings with the Securities and Exchange Commission.
He said the local financial support was included in Cardinal's prospectus because many potential investors were interested in seeing whether there was local support.
Beumer appeared before the Union City, Ind. City Council last year as the county was preparing its incentive package, but no specific amount for a contribution from the city was mentioned in public. Officials did not want to give the competition a chance to see what the Randolph County incentive package would be.
Union City, Ind. Mayor Roger Hoover wrote a non-binding letter indicating the city was please to participate in the incentive package and offering the $125,000. Council members were not aware that Hoover wrote that letter until last week's council meeting, a year after Hoover made the pledge.
Council members were careful to say they backed the Cardinal project and wanted to support it but were not happy with how the mayor had proceeded. In order to make the contribution, council members will have to take official action to amend the town's EDIT plan.
Beumer said, "Nobody is screaming for the money (from Union City)." He will appear before the Union City, Ind. Council Monday, March 12 to answer questions.