Engineering firm on board to help drive local economic development
Wed, 12/28/2016 - 8:10am caleb
Dan Sanderson | Staff Writer
A utility authority, created by a pair of townships located south of the City of Grayling, received approval to enter into a contract with an engineering firm to plan and develop infrastructure projects that will bring hundreds of high-paying jobs to the community and will spur economic development.
The Grayling Charter Township Board of Trustees, at its regular monthly meeting held on Wednesday, Dec. 21, gave the Beaver Creek-Grayling Townships Utility Authority approval to enter into a contract with C2EA, Inc., a Gaylord-based engineering firm.
The firm will complete the engineering services and design and construction plans for a water and wastewater treatment facilities that will serve properties located along Four Mile Road district.
The main user for the utilities is Arauco North America, which is building a $325 million particleboard plant off of Four Mile Road that will create 250 jobs.
Other users who have agreed to enter into a special assessment district to receive water and wastewater treatment utilities include Kirtland Community College, Charlie’s Country Corner, the Super 8 Motel, Georgia Pacific, and property developer Carroll Knight.
A $3.2 million grant from the United States Department of Commerce’s Economic Development Administration, as well as a $4.1 million United States Department of Agriculture’s Rural Utilities Service low-interest loan, has been approved for the projects.
Arauco North America has agreed to pay 95 percent of the loan back over a 40-year period in order to obtain utilities to build the huge particleboard plant.
Before money is issued to the utility authority from the federal government, bids have to be solicited and a construction contract has to be signed. The bonds for the grant cannot be issued until a final price tag for the infrastructure is determined.
Larry Fox, the vice president for C2EA, Inc., said plans will be completed for the water and wastewater treatment systems, and the construction bids would be solicited in the summer.
The estimated total engineering cost for the project is $970,000.
“There is a gap between when they’re going to give you the money and when you need to spend money and that’s where we’re at right now,” Fox said.
Fox said it would cost $450,000 to get the project to the point where it can go out for construction bids.
“We know that between the two townships, you don’t have $450,000 in cash lying around,” Fox said.
Fox said that his firm could incur about half of the initial engineering costs, and would bill the townships on a monthly basis to cover the remaining costs.
“It will only be incurred as we spend it, but by the time we get to where you can get reimbursed and the special assessment process goes through, there should be about $450,000 out there,” Fox said.
Grayling Charter Township Board Trustee Dennis Long said he was comfortable going with a payment plan since there was little chance that Arauco North America would drop its project at this point.
“There is a slim to none chance that is going to happen,” Long said.
State of Michigan, Crawford County and Grayling Charter Township officials have been working with the wood manufacturing company over the last two years to bring the new plant and jobs to the community.
As part of the negotiations, there has been some discussions with Arauco North America to provide interim financing to help cover some of the engineering costs for the infrastructure as part of company’s special assessment.
“There is nothing to say they can’t pay some of that up front,” said Grayling Charter Township Supervisor Rick Harland. “They need water and sewer.”
In related action, the township approved an application that will be submitted to the Michigan Department of Natural Resources (DNR) for property where the wastewater treatment plant will be located.
In 2000, the DNR agreed to release 1,850 acres of land located north of Four Mile Road and east of I-75 to Grayling Charter Township for industrial development.
“They’re going to transfer it free of charge, but they want your board’s approval before they do it,” Fox said.
The township board also passed a motion to allow a wastewater treatment facility to be built in the industrial development district.