England Airpark & Community

Story Courtesy of The Town Talk
Written by Billy Gunn

When Louisiana economic development chief Stephen Moret alerted Cenla industry hunters about Sundrop Fuels this past summer, local officials already were trying to reel in a big 3,000-job trophy.

No problem, Central Louisiana Economic Development Alliance head Jim Clinton said, and CLEDA and other agencies set their sights on landing both projects: Sundrop's renewable fuels plant and Continental Tire's proposed manufacturing facility.

CLEDA Vice President Rick Ranson and Cleco's Ben Russo worked on the Sundrop deal while Clinton and England Authority Director Jon Grafton concentrated on Continental Tire, though all had input on both projects.

Continental, with its thousands of direct and indirect jobs, ultimately chose a site in South Carolina to manufacture tires, where the bulk of its sales on the East Coast are.

But Colorado-based Sundrop chose a site in Cenla: 1,200 acres off Interstate 49 in Rapides Station, just north of Alexandria.

It's centrally located to the woody biomass -- waste from the region's wood industry -- needed to make car-ready "green" gasoline. And the site has a recently built, large-diameter natural gas pipeline nearby that will provide heat and feedstock to convert the biomass to gasoline. At full capacity the plant will produce 50 million gallons a year, employ 150 directly and as many as 1,100 indirectly.

Local officials said it was the untiring, unselfish, cohesive, responsive and -- importantly -- quiet efforts of a few individuals and organizations to bring Sundrop to Alexandria. Working with Louisiana Department of Economic Development were CLEDA, the England Authority and its board, and Cleco, which gets involved when a industry prospect shows interest in the area.

"All of them did a great job, no doubt about it," LED's Moret said.

Moret said the state identifying Sundrop and its project early on is LED's strategy of targeting industries that can thrive in Louisiana. In this case it was the state's energy know-how and willingness to accommodate that aligned with Sundrop's aim of making gasoline with renewable ingredients.

LED's job is to bring industry to Louisiana, but local shoulders bore the weight of getting Sundrop to locate here. And after the company narrowed the sites to two in Louisiana -- one in Pointe Coupee Parish near Baton Rouge and one here -- local officials thought they'd lost it.

"There was a point at which we pretty much thought it was going to Baton Rouge," Clinton said, "not that we stopped working it, because you never stop working it.

"Then it came back around," he said. "It's complicated. There are no simple deals."

Sundrop is just a few years old and still thought of as a startup, which generally means higher risk for those offering credit, or in the case of Louisiana, financial incentives and other agreements.

But Sundrop had already been vetted by industry. Chesapeake Energy this past summer paid $155 million to buy half of Sundrop, an investment that at the beginning at least is an effort to make a market. Chesapeake's natural gas from the Haynesville Shale in northwest Louisiana will fire the plant.

And well-known venture capital firms Oak Investment Partners and Kleiner Perkins Caufield & Byers have invested tens of millions of dollars in the company, which started as a firm using solar energy to run green gasoline-making technology but graduated to natural gas and the Chesapeake investment.

The investors enhanced Sundrop's stature and viability, Clinton said.

Two prospects

Grafton and the England Authority board of commissioners had offered Continental land at England Airpark.

Continental came through Alexandria with teams of people throughout the summer and fall, sometimes staying for days, sometimes for hours.

Sundrop, in contrast, flew in fewer times with fewer company representatives, who studied Central Louisiana sites that CLEDA had identified.

Continental ultimately chose South Carolina, citing proximity to its biggest customers. Moret said the company examined "outgoing" costs, such as shipping tires to the East Coast.

Moret said Louisiana tried to make the case that raw materials Continental needed -- steel from the West Coast, carbon black from plants in the South -- were closer to Louisiana than South Carolina, and that costs differences when figured this way were a wash.

But the labor pool here compared to South Carolina also played in tipping the scales, Moret said. South Carolina has an unemployment rate of almost 10 percent while Louisiana's is well below that. Continental believed there would be more people there to fill the 3,000 jobs, he said.

Grafton said he believes Central Louisiana workers -- and others migrating here from elsewhere -- could have filled the Continental jobs. Cenla, he said, gains 1,500 jobs a year, and staffing Continental would have been just twice that.

When Sundrop expressed greater interest in Cenla, Grafton quickly drew up, and England commissioners quickly approved, an agreement where the England Authority would create a special district at the Sundrop site.

The special district allows the England Authority to issue hundreds of millions of dollars in private activity bonds for the project, which Sundrop is responsible for repaying. The district also gives the company one entity, and not multiple bureaucracies, to answer to on land usage.

"Businesses are looking to do that because it reduces their risk," Grafton said. "If they have the ability to come to a location and they can flip a switch and be in business the next day, that's one end of the risk spectrum.

"If they're going to a community that doesn't have a site ready, and has got to run utilities and get all sorts of approvals, that's the other end of the spectrum that's high risk," he said.

Victory

Sundrop is the biggest economic coup in Central Louisiana since Union Tank Car decided to locate here in 2004.

Landing Sundrop also marks the first victory for the new CLEDA, which merged with Cenla Advantage Partnership officially in May 2011.

Clinton said CLEDA works on as many as 10 deals at a time, though just about no one outside the organization hears about them. Companies looking to locate here want ready information on sites, utilities, work-force numbers and other raw but important data.

Ranson, who is vice president with CLEDA, said the secret is to never give up.

"You work the deal, work the deal, work the deal, then work it some more," he said.

And when things reached a fever pitch, and more was needed such as England Authority's dexterity in quickly drawing up a special district and agreeing to sell bonds for the company, Clinton said everyone came through.

"Jon (Grafton) and the board (of commissioners) performed at a remarkable level," Clinton said, "to put something together that anybody looking at it from the outside would have said, 'You can't put something together in that time period.'"