Building permit expiring at Elk Run development - Finance ...

Posted: 3:53 pm Mon, February 13, 2012
By Chris?Newmarker
Tags: Abraham Algadi, biobusiness, Elk Run, jobs, John Pierce, Minnesota Department of Transportation, MnDOT, Pine Island, Recombinetics, Scott Fahrenkrug

The construction of a building base at Elk Run in late 2010 was the last major activity at the site. (File photo: Bill Klotz)

Lone prospective tenant says it needs aid to move in

Recombinetics, a Minneapolis-based startup planning to produce genetically engineered pigs, says it needs economic development aid if it?s going to move into the much-delayed Elk Run biobusiness park in Pine Island.

Scott Fahrenkrug, the company?s chief executive officer, said Monday that a recent lease rate proposal from Elk Run?s developer, Woodland, Calif.-based Tower Investments, was 25 percent higher than anticipated.

?We?re still looking at it. But the important point for us at this point is if we?re going to be spending that much in addition, there has to be a reason to be there,? Fahrenkrug said. He said there are prospective locations elsewhere in Minnesota and surrounding states for the pig production facility if Elk Run doesn?t work out.

The situation means that the only publicly disclosed prospective tenant for Elk Run remains far from a done deal. Meanwhile, the building permit is set to expire Wednesday for the first structure that Tower Investments planned at Elk Run, which would include a 200-acre biobusiness park as part of a 2,000-acre development.

Tower?s senior vice president, John Pierce, could not be reached Monday.

Pine Island city administrator Abraham Algadi on Monday described the permit expiration as ?insignificant.? Tower ? which previously planned a 50,700-square-foot office building on a base laid in November 2010 ? now plans something different as it works with Recombinetics and other prospective tenants, Algadi said. He added that he expects Tower to apply for a permit for a different type of building in the coming months.

In his search for the financial aid that Recombinetics needs to move to Elk Run, Fahrenkrug has approached or plans to approach electricity utility Great River Energy, the city of Pine Island, Rochester Area Economic Development and the Southern Minnesota Initiative Foundation, among others.

?It?s going to have to be someone with an interest in regional development to make this happen. It?s not going to be a bank,? Fahrenkrug said.

Recombinetics is a four-year-old startup that has proprietary technology for genetically engineering pigs and other types of livestock. If constructed, a Recombinetics building would house up to 200 pigs. Fahrenkrug plans to produce pigs that have diabetes or heart disease in the same way humans do; researchers would then purchase the pigs.

Pine Island is also working to meet another deadline: a requirement by the state to have 20 biobusiness jobs at Elk Run by the end of the year. Pine Island could be on the hook for $3.65 million if 182 biobusiness jobs aren?t created at Elk Run by the end of 2019; the jobs goals with the state are part of an agreement around the creation of a Highway 52 interchange at the site.

Tower in November gave Pine Island officials extra assurances by saying the city can keep 50 to 60 acres next to the interchange until Elk Run reaches 20 biobusiness jobs. Pine Island and the Minnesota Department of Transportation had previously agreed to turn over 50 to 60 acres left over from the 270 acres Tower donated for the road project.

The land is next to the interchange and would likely fetch Pine Island a premium price of $20,000 to $40,000 per acre if the city had to sell it to recoup losses, Algadi said. At that rate, Pine Island could make $1 million to $2.4 million.

MnDOT plans to mostly finish the $45 million interchange project this year, with Shafer Contracting building a frontage road to the Elk Run site.

This entry was posted on Monday, February 13th, 2012 at 3:53 pm and is filed under Business & Economy, Construction & Development, Technology, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2012/02/building-permit-expiring-at-elk-run-development/

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