By Adam Hocking
MARSHFIELD —The Marshfield Common Council unanimously approved a development agreement Tuesday night that will see the construction of a new 49,000-square-foot manufacturing facility built on Marshfield’s south side in the Yellowstone Industrial Park.
That facility will serve a company called Silvercote, which makes custom laminated insulation for metal buildings, according to the company’s marketing manager, Jane VanBergen. Silvercote has corporate headquarters in Greenville, SC, and its current Marshfield facility is at 1601 Laemle Ave. The new facility will be built near the north east corner of Yellowstone Drive and Galvin Ave. in Marshfield.
VanBergen said that the new facility would double the space when compared to Silvercote’s current location in Marshfield.
“We need more capacity. Our customer requests have grown, and of course with that comes facility growth and also people growth,” she said noting that in the long term the move could also be a job creator in Marshfield. Silvercote employs seven people in its Marshfield facility, VanBergen said.
VanBergen said the target date for completion of the new facility is July 1 of 2016. She added that Silvercote wanted to stay in Marshfield because, “We have a really great team of skilled employees, and we don’t want to lose that talent and that experience.” She added that the city of Marshfield has been “very, very supportive” of Silvercote.
The development agreement the city has made is with Yellowstone Partners LLC, which will construct the facility and then lease it to Silvercote LLC.
“This is pretty common in the industrial business where you need a building and so you go to a real estate developer who builds you a building then leases it back to you,” Mayor Chris Meyer said of the arrangement between Silvercote LLC and Yellowstone Partners LLC.
According to the development agreement, the new facility is to have an assessed value of no less than $1,540,000. The city will reimburse Yellowstone Partners LLC to the tune of $410,000 for the cost of construction and land. The development agreement also mandates that the city must recoup $40,000 per year for ten years in property tax revenues from the facility once it is built.
If the facility does not generate $40,000 per year in property taxes, Yellowstone must account for the difference, which guarantees that regardless of the property tax revenues the facility eventually generates, the city will receive $400,000 over the first ten years of the facility’s life.
Meyer explained that for Yellowstone Partners LLC, “Basically you’re promising $40,000 (per year) in tax revenue and if your taxes are $35,000, you’re writing another check for $5,000 to us to make sure we can (make) debt payment.”
The development agreement also dictates that prior to May of 2034, if Yellowstone wishes to transfer the facility to an entity that would not pay property tax; the city would have to approve that transfer. If Yellowstone were to sell its facility to another taxable entity, the city would have to be informed of that decision but would not have the power to disapprove the action.
Silvercote’s parent company, Knauf Insulation, has also made a guarantee to the city that $200,000 would be paid to the city if the project is not able to “come together as desired,” Barg said.
“Every year … that ($200,000) will be written down by $20,000. … At the end of ten years, they’re no longer guaranteeing anything because at the end of ten years we should have $400,000 in tax payments anyway,” Barg said.
The agreement calls for the new facility to be completed by September of 2016, though at this point Barg said it was unlikely to be finished that soon.