LAWRENCE COUNTY – During the Lawrence County Redevelopment Commission meeting Thursday, Commission President Jeff Quyle shared an update on the proposed shell building project in the Mitchell Industrial Park.
Quyle and Attorney David Smith have been in talks with ICE Miller and Baker Tilly on various options for bonds. Some of the projects will have to use taxable bonds such as the proposed shell building in the Industrial Park.
The RDC and City of Mitchell are still in talks about a Memorandum of Understanding (MOU) between the two groups and who will ultimately own the building, funding, and other agreements that will need to be worked out.
In addition to their discussions, Gary Martz with GM Development presented the Lawrence County RDC members with a Build – Operate – Transfer (BOT) Management option in constructing and operating the shell building proposed in Mitchell.
The Indiana Code 5-23 statute enacted in 1997 establishes the framework for BOT agreements. The statute helps small communities such as Mitchell and local governments to enter into P3 contracts for infrastructure and economic development projects.
A BOT has become a growing trend for procurement projects in the State of Indiana which allows a public entity to negotiate directly with the developer of a project. The agreement can be a long or short-term lease anywhere from three to ten years depending on an agreement between both parties.
Martz told RDC members that they should make sure any agreement puts the RDC in charge of the term and conditions of any sale or lease, and not the developer, giving them more flexibility to help determine shared profits from an agreement that RDC enters into.
The BOT model allows flexibility in funding and project costs. Some public entities may elect the traditional funding sources such as bond proceeds, or cash on hand to pay the project costs a BOT agreement may involve an alternate structure.