POCATELLO — The Pocatello Development Authority is making new investments in both the redevelopment of the former Hoku Materials site and in a planned 280,000-square-foot cold storage facility.
On June 2, the PDA board — responsible for administering the community’s tax increment financing districts — approved $420,000 toward power, gas and fiber-optic infrastructure to make an industrial business park at the Hoku site.
A pair of local businessmen operating as Portneuf Capital LLC have bought the 68-acre former Hoku site off of Kraft Road from PDA for $1.25 million, mentioning a data farm, a brewery and a company that builds ATVs as potential business tenants for the industrial park.
During its Wednesday meeting, the PDA board will also consider approving an owner participation agreement with Portneuf Capital, outlining the terms under which PDA will reimburse the developers for the approved investments.
Portneuf Capital initially asked PDA on March 18 for reimbursement of up to $1.728 million in costs.
The developers predict the project will result in $62 million in new investments in the local economy.
One of the partners, Darren Miller, offered a general statement on the progress: “It’s steady. I think it’s going good.”
Hoku Materials broke ground on a $700 million polysilicon plant in 2007. The plant, which never opened and has been idle ever since, has become a regional symbol of missed economic opportunity.
“I’m excited to see something happening on that site that has been sitting there vacant for a while,” said Heidi Adamson, who represents the Pocatello City Council on the PDA board.
John Regetz, president and CEO of Bannock Development Corp., said the business park should bring “primary employers” into the community and generate high-tech jobs.
“For the North Portneuf area, that is a redevelopment project that gives us opportunities to bring in industry with some diversity, but also that is a key to our core existing economy,” Regetz said.
PDA’s attorney, Meghan Sullivan Conrad, of Elam & Burke in Boise, initially advised the board against approving the funding request, concerned it was not in compliance with the current TIF plan created for the Hoku project. Conrad later agreed the requests for funding for power, natural gas and fiber-optic infrastructure complied with the plan and could go forward. She also recommended the plan should be amended in the future to reflect the base values and utility needs of the Portneuf Capital project.
During Wednesday’s meeting, the board will also consider approving more than $180,000 in funding toward engineering of the proposed Frigitek project. On April 15, PDA ratified an owner participation agreement with Frigitek, authorizing about $4.5 million in payments to support the project. The board has already approved $115,000 toward surveying and construction management for Frigitek, authorized during a May 20 meeting.
Regetz said Frigitek will likely locate in an industrial park at the Pocatello Regional Airport.
“The development for cold storage is going to be supportive for agriculture and food processing companies, as well as for farmers themselves,” Regetz said. “That’s going to help the economy by supporting those industrial sectors and agricultural sectors.”
Regetz said the project should break ground this summer. The project is being planned by Lionchase North America, a private equity firm in Washington, D.C. It will include refrigerated, dry and freezer warehouse space and pre-cooling and packing facilities to serve food processors, food shippers, freight handlers and agricultural producers.
Tax increment financing is an economic development tool that allows communities to divert tax revenue generated from new growth from distribution to general taxing entities. Instead, those funds, called an increment, can be used to support public infrastructure that benefits projects within a designated urban renewal area, thereby enticing development.