Don't cut off options

Published:

Revisiting a previously discarded option for expansion of its facilities, the Frankfort Plant Board has again reacted with a collective yawn.

Fred Burch, who owns the old Genesco shoe factory building on Myrtle Avenue, pitched it to the board as a bargain, at $5 million to $6 million, compared to constructing a new headquarters on 30 acres off the East-West Connector which the municipal utility “bought” from city government for a nominal $1.

Even though the Plant Board got the city’s Carpenter Farm land virtually free, Burch exhorted members to consider the advantages of buying his East Frankfort property rather than building new at a cost he estimated at $20 million to $30 million.

But chairwoman Sheila Burton indicated the board’s mind is made up. “We have vetted the Carpenter Farm and have purchased it and are satisfied that that’s the place we should concentrate on,” she said.

In pondering which direction to take, the municipal utility had the benefit of real-estate shopping in the midst of a market glut resulting from a burst housing bubble and the subsequent recession. Plant Board managers ultimately narrowed their field of choices to five properties, including the Carpenter Farm, Genesco, RJ Industries, the old Sears store in Eastwood shopping center and the old Home Depot store in West Frankfort.

The city offered a steal on the Carpenter Farm site because it was eager to keep Plant Board operations inside the corporate limits, where workers would pay the 1.75 percent occupational tax, now scheduled to rise to 1.95.

RJ Industries, a closed factory, was initially the top pick but the Carpenter Farm moved to the top of the list after the city increased the space to the 30-acre minimum the utility demanded. Genesco, Home Depot and Sears all lost out partly because of managers’ fears that moving Plant Board operations into one of those buildings might have an adverse impact on neighboring residential and business uses. (Since then, it’s been announced that the state Administrative Office of the Courts would take over the Home Depot building.)

The Plant Board took its time weighing the free land offer but eventually agreed, late last year, to accept it on a 5-0 vote. It still isn’t known how much it would cost to build new facilities there. A consulting engineer proposed a 60,000-square-foot administrative office building and a 90,000-square-foot warehouse, plus ample parking for the utility’s extensive fleet of vehicles. Chairwoman Sheila Burton, interviewed afterwards, said acceptance of the land made sense only if the board was serious about building there. Other members suggested the city could take the acreage back if the utility has second thoughts about the plan.

The board later terminated General Manager Jim Smith, a staunch advocate of the Carpenter Farm site, who said the facility consolidation would pay “huge dividends” in the long run. Perhaps it will, but the Plant Board needs to keep its options open until it can more accurately determine the cost of the new buildings. Burch may be right about the advantages of property reuse, even though the board apparently is not interested in his offer.

Utility directors especially need to weigh the potential impact of a major construction project on their long-term expenses and rate structure. Electric, water and cable customers may be less than enthusiastic about the idea if it means their bills go up even more as a result.

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