A vote is expected on General Manager Tom Wheeler’s proposal during Tuesday’s called session of the Cleveland Board of Public Utilities. The board convenes at noon in the CU Training Center.
Early last week, Wheeler outlined the idea in an email to board members which found its way to the inboxes of Cleveland City Council members. The subject surfaced at the municipal governing body’s bi-weekly session last Monday when Councilman Bill Estes said he was encouraged by the CU general manager’s recommendation.
Until Wheeler’s proposal, negotiations for a joint purchase of the property — known as the Spring Branch Industrial Park south of town — between the City Council and Bradley County Commission had stalled. The Council had offered to put up $3 million for the acquisition if county commissioners would match the amount; however, county financial leaders since have struggled to devise a strategy for coming up with their share.
In order to jumpstart inter-governmental talks, Wheeler is suggesting that Cleveland Utilities enter as a third partner by contributing $2 million, thereby reducing the commitment to city and county governments by $1 million. Under Wheeler’s proposal, all three entities would ante up $2 million.
County commissioners are scheduled to consider the offer in an upcoming session.
Still, to make Wheeler’s proposal official, it must be sanctioned by the Cleveland Utilities board whose members scheduled Tuesday’s called session. Last week, Wheeler confirmed he will present the proposal to the board while expressing confidence that it will get a favorable review.
“I feel like it will be received favorably,” Wheeler told the Banner. “I see this as a very positive thing ... a win-win situation for everybody.”
CU board members include chairman Aubrey Ector, Eddie Cartwright, Mitchell Lyle, Chari Buckner and Cleveland Mayor Tom Rowland.
Wheeler’s primary interest in proposing the three-way funding split is his concern that the new industrial park opportunity might be slipping away because of financial restrictions faced by local governments. The CU general manager wears two hats — one as the longtime utility leader, but also as chairman of the Cleveland/Bradley Economic Development Council.
“I have been increasingly concerned that this opportunity to create a new [industrial] park is slipping by us,” Wheeler said in the board email. “With the recent successes we have experienced in Bradley County, our inventory of publicly held industrial property has been reduced to a very low number. We are almost out of the business of being able to show publicly held property to prospective industry.”
A community the size of Cleveland should have 400 to 500 acres of property available for industrial recruitment, Wheeler said. Over the past couple years, the local economic development surge has almost dried up land availability for future growth, he added.
Wheeler acknowledged some might be content to slow down future economic development efforts because of the recent successes; however, he pointed to Bradley County’s jobless rates which are still hovering near 10 percent.
“... It is not the time to stop the process of trying to add more good-paying jobs to our community,” he said.
In the big picture, CU stands to benefit from the three-way partnership. In exchange for the utility’s willingness to throw in $2 million, CU would receive in exchange 25 acres of the property for the future development of an Electric Division Operations Center that would be used for the storage of materials, poles and trucks. Wheeler said the center’s construction is still 10 to 15 years down the road.
Another component to the deal is that local government would gradually reimburse CU’s investment as land parcels are sold.
Another benefit to CU, and to local utility customers who pay electric and water rates, is that Spring Branch already has access to CU’s full infrastructure — electric, water and sewer. If another plot of land is purchased, it might not have the same access and would require CU to spend “several million” to fully develop the needed infrastructure, Wheeler explained.
“There is certainly enough justification from our utility standpoint to make the contribution cost justifiable ... the main justification being that our infrastructure is already in place [to service Spring Branch],” he said.
Yet another factor, Wheeler offered, is that CU has no more room to expand at its current 13-acre site on Guthrie Drive, and neighboring property is priced at $200,000 per acre compared to $15,000 per acre at Spring Branch.
The annual interest on CU’s $2 million annual debt would be about $30,000 per year if the money is borrowed now from the Tennessee Bond Fund, Wheeler acknowledged.
“I think it makes perfect sense for CU to participate in this park,” he said.