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Connersville to borrow $3.5 million to clean up Visteon site

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The city of Connersville will borrow as much as $3.5 million to clean up the former Visteon site where a startup company wants to build police cars.

Connersville Mayor Leonard Urban said Tuesday that the city will borrow the money from the Indiana Finance Authority's revolving fund. The loan, plus $500,000 from an environmental trust fund, is expected to cover the estimated $4 million cleanup cost. The cost estimate includes a 45 percent contingency fund, Urban said.

Urban said he expects bankrupt auto-parts maker Visteon to turn over the 1.8 million-square-foot factory on Dec. 28. Visteon had contracted with a Michigan firm to clean up industrial solvents over the past eight years, Urban said. Connersville will continue to use the firm GeoTrans and has agreed to finish the cleanup by 2020, he said.

The city's taking control of the site paves the way for Atlanta-based Carbon Motors to launch its operations in Connersville. Carbon Motors would occupy the plant during the ongoing clean up. The company has received a $16 million, 10-year package of tax incentives from the Indiana Economic Development Corp., spokeswoman Blair West said. Carbon Motors told the IEDC that it will create 1,550 full-time jobs by 2017 and invest $130 million within nine years.

The package is worth about $10,300 per job. That's higher than the IEDC's 2009 average of $8,741 in tax breaks per job.

But Carbon Motors can't do anything until it lines up financing. The company has applied for a $310 million loan from the U.S. Department of Energy, and Urban said he and other east-central Indiana mayors are joining the Indiana Congressional delegation in lobbying on behalf of Carbon Motors.

Connersville will give Carbon Motors the 180-acre Visteon site if the company lands the Energy Department loan, or equivalent financing, once city officials agree that the company is ready to go into production. Urban refused to disclose further terms of the contract with Carbon Motors. "There's safeguards in there," he said. "We're not going to take any chances with the taxpayers' money—any more than we already have."

Urban admitted that borrowing $3.5 million is a large step for the city. The loan is for 20 years at 2 percent interest.

Also Tuesday, the city announced that it will use $500,000 from a trust that was designated for cleaning up hazardous waste at its landfill. Under the agreement negotiated by Attorney General Greg Zoeller, the Indiana Department of Environmental Management will release $862,000 that remained in the trust for long-term maintenance of the landfill and the Visteon site.

Connersville had paid $600,000 into the trust as part of a legal settlement with IDEM. The agency used the trust funds to cap the landfill, prevent erosion and monitor groundwater.

According to the recent agreement, IDEM officials believe the landfill site has  "stabilized."

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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