September 5, 2018 10:56:29 AM
Slim Smith - [email protected]
A $10 million expansion to a building owned by Lowndes County will cost it just $200,000 after the board of supervisors approved a resolution amending the property's lease-purchase agreement Tuesday.
Golden Triangle Development LINK CEO Joe Max Higgins presented supervisors the plan, which requested the county reduce the purchase price of its spec building near PACCAR by $200,000 should Agricel -- the company that holds the lease -- exercise its purchase option.
"It's probably one of the more convoluted arrangements we've ever had," said Justyn Dixon, director of development for Agricel.
Agricel is an industrial development company that specializes in capitalizing and developing industrial spaces, which it then leases.
"We're paying rent and collecting rent on the same property," Dixon said.
The building in question was initially owned by Agricel, which sold it to the county in 2010 to be used a spec building for industrial recruitment. Agricel leased the 100,000 square-foot building from the county in 2016 after the county's tenant at the property, Cal-Star, filed bankruptcy.
Agricel then sub-let the building to Competitive Logistics Inc., which uses the facility to manage warehouse operations for PACCAR.
"Because of PACCAR's growth, that 100,000 square feet is not enough," Higgins told the supervisors Tuesday. "They need another 150,000 square feet. Agricel is committed and willing to do that. That would bring the building to 250,000 square feet. That's not insignificant. PACCAR itself is only about 500,000 square feet."
The county purchased the building in 2010 for $5 million. Agricel pays $30,000 in monthly rent, which it then collects from CLI. Agricel's lease runs through 2026.
Agricel doesn't have any current plans to purchase the facility but has the option during any point of the lease agreement. If the company exercises the option, it will simply pay the county $200,000 less than the appraised value at the time.
Higgins said he discussed two options with Agricel officials.
"In order to do this, we looked at the county participating in this up front. (The LINK) and Agricel sat down and agreed we could ask the county to do one of two things, ask the county to add some cash up front or we could make an amendment to the lease agreement and reduce the purchase price. They have a purchase option. Agricel is amenable to that and it means you won't have to come up with money up front."
Work on the expansion will begin soon and should be completed by late summer 2019, Dixon said.
Benita Nowak, director of real estate for CLI, declined comment on the expansion, but Higgins said the expansion is expected to create an additional 10 jobs.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]