Property that has sat undeveloped for years could see some activity soon.
Tuesday evening, July 6, members of the Gainesville City Council unanimously approved an agreement between the Gainesville Economic Development Corporation and Strategic Rail Industrial LLC to purchase and develop Gateway Industrial Park for $5 million.
According to information provided by the GEDC, the agreement for the 144-acre park in northwest Gainesville includes paying a non-refundable option payment of $25,000 for a six-month option period that will apply to the sale price.
GEDC Executive Director Audrey Schroyer said the six-month period, with a six-month extension available if desired, gives the Philadelphia-based company time for things such as geographical and environmental studies and engineering reviews.
“If for any reason the company decides that they do not want to proceed with the project, the contract allows for them to make that decision within the allotted time frame,” Schroyer said. Each of the two six-month periods does require a $25,000 payment, she said.
“We expect to close on the deal before the end of July, but the company has until June 30 of 2022 to close,” Schroyer said via an email interview Thursday, July 8.
Schroyer mentioned she was only available for email interviews this week.
Strategic Rail can have its due diligence period once the contract is signed. The monies will apply to the sale price with $2.5 million to be paid at closing and the remaining balance to be placed into an economic development promissory note with the GEDC.
Strategic Rail can earn forgiveness toward the note balance through capital investment and job creation over seven years, according to a news release issued this week by the GEDC.
The debt forgiveness occurs at 25 cents per dollar invested in common-area infrastructure, Schroyer said.
“For every full-time equivalent primary job at Gateway Industrial Park, debt forgiveness would be calculated at the rate of $4,000 per job that has a minimum annual wage rate of $20.00 and has been maintained for at least 12 months,” she said. “These direct investments and/or job creations would be reported on an annual basis to the GEDC and the city.”
Strategic Rail reportedly plans to finance and construct the railroad services at the industrial park, including a rail switch from the BNSF Railway mainline that runs parallel to the park.
According to the release, the company plans to build speculative industrial buildings, build-to-suit facilities and a truck transfer facility that Gainesville businesses can utilize.
Austin-based Impact DataSourc conducted an economic impact study, Schroyer said. Their analysis concluded that the project could generate 2,360 direct and indirect jobs over the first 20 years. It could also generate an estimated addition of $274.2 million to local tax rolls, officials said.
“This company will be investing in the community in a number of ways especially when it comes to the impact on tax revenues for the city and other taxing entities,” Schroyer said. “They will be investing much, much more than $2.5 million when this project is completed. This creative financing is assurance and good faith that the company will invest what is needed from an infrastructure perspective and also create jobs.”
The park will have an estimated 1.79 million square feet of new occupied space for manufacturing, warehouse/distribution and logistics businesses built over five years.
Completed in 2014, Gateway Industrial Park has been a recruiting asset in the GEDC’s efforts to locate industrial projects to Gainesville, officials said. According to the release, its location near I-35 and U.S. 82 is attractive for logistics, and the area workforce suits industrial development.
However, despite the prime proximity to the BNSF main line, the park's lack of a rail switch has been a deciding factor for many companies, officials said. The park was designated a BNSF certified site in November 2020.
BNSF certification ensures a site is ready for rapid acquisition and development through a comprehensive evaluation of existing and projected infrastructure, environmental and geotechnical standards, utility evaluation and site availability, according to information provided on BNSF’s website.
Gainesville would often be a finalist for projects and then be eliminated because of the non-existent rail, Schroyer was quoted as saying in the release.
Strategic Rail’s plans to construct and operate a switch, which will allow for multiple tracks within the park, now makes Gainesville a true competitor for large-scale projects, officials said.
“Strategic Rail appreciates this opportunity to work with the city of Gainesville, the GEDC and BNSF to develop this modern, rail-served industrial park,” Jonathan Gilbert, chief commercial officer of Strategic Rail Industrial was quoted as saying in the release. “Strong growth in the area surrounding the Dallas-Fort Worth Metroplex makes this site an excellent choice for businesses building in Texas. We view this strategic project as a way to provide needed area employment, tax revenue and other opportunities for Gainesville and greater Cooke County.”
The GEDC, which began discussions with Strategic Rail on the project last October, will continue to act as a recruitment and marketing extension for locating projects suited for the development by partnering with Strategic Rail and affiliates.
“The trickle-down effect of this project with its impact to tax rolls, direct and indirect job creation, and diversifying the economic makeup of this region is a game-changer,” she said. “I couldn’t be more proud of Gainesville’s leadership from the GEDC board and the city council for laying the groundwork for what got us to this project and I’m privileged to have played a small role on a team that made this happen, especially coming out of the Coronavirus pandemic. Strategic Rail was immediately impressed with Gainesville not just because of the location and real estate, but because of everything Gainesville has to offer as a community.”
Strategic Rail expects to begin track construction and site development immediately following the closing of the sale.