Because of a difference of a few thousand dollars for a lot price, Midlands Farm Services, Inc., the agent for Scully Estates, is relocating to Hillsboro.
In Tuesday night’s Hillsboro City Council meeting, the city approved the sale of a lot for $7,000, based on $10,000 per acre, to the company in Hillsboro Heights. According to Midlands Farm Services Agent Doug Sharp, the City of Marion turned down his offer of $3,000 for a lot that was listed at more than $10,000 in the industrial park.
City of Marion officials said Monday they tried, but it didn’t work out for Midlands Farm Services Inc. to relocate to the city’s industrial park or anywhere else in town.
The company began looking for a location for a new building four or five months ago when the Scully family considered developing land that the Scullys own in Hillsboro.
The business, owned by the Scully family, began in Marion County in 1870. The company decided it wanted to update its headquarters, currently at 114 S. Freeborn St., Marion, with a new building.
“The Scullys feelings were they liked the looks of Hillsboro,” Sharp said.
But Sharp and his employee, Sharon Andes, wanted to give Marion a chance.
“We said ‘Wait a minute. Let’s reconsider’,” Sharp said. “We absolutely went to bat for this town.”
They contacted Economic Development Director Doug Kjellin to see what was feasible.
“Kjellin suggested we go in the city’s business park,” Sharp said, “but we weren’t interested in that.”
What Sharp and the business owners were interested in was the lot east of the city’s speculative building in the industrial park. It was Sharp’s understanding that other businesses that had built in the industrial park paid little or no money for their lots.
With that in mind, Sharp offered $3,000 for the lot. Kjellin agreed to take the offer to the city council.
Sharp said he was contacted by Kjellin who told him that the city council was not willing to sell it for that price.
More than a week passed with no correspondence between the city and Midlands Farm Services.
On Friday, Sharp signed a contract with the City of Hillsboro for a lot in Hillsboro Heights.
“This wasn’t Hillsboro slipping in here,” Sharp said. “We went to them.”
Previously, the city council had adopted a policy regarding incentives at the park.
The city offers incentives including reduced or free lots, free or reduced utility hookups, and other perks.
Prospective developers are graded through a point system on various aspects of their projects such as the number of jobs created, contribution to city sales tax, and other factors.
The total points from the evaluation then are used to determine the amount of incentive the city can provide.
When Midlands Farm Services was evaluated, Sharp was disappointed with the outcome, Economic Development Director Kjellin said.
“When I contacted Doug, he implied that he had made a commitment toward a lot in Hillsboro,” Kjellin said.
Kjellin said he contacted Sharp again Monday morning, encouraging his attendance at a city council meeting that evening to further negotiate the issue and was told that Sharp was not going to attend.
“I’m not sure if we can negotiate with the other party not here,” Kjellin said. “Feelings were hurt and he wasn’t interested in coming back (to negotiate).”
“It should be noted that at no time was Doug Sharp told he could not go into the industrial park,” Councilman Gene Winkler said. “People think Doug was told he could not go in that park and that is false.”
“I’m surprised he didn’t want to come before the council for consideration,” Councilman Bill Holdeman said.
“I hate to see a business that’s been here for 130 years leave,” Councilman Stacey Collett said. “I don’t know if we can negotiate anymore.”
Kjellin offered to renegotiate with Sharp. He said he knows there’s a contract pending between Midlands Farm Services and the owner of land in Hillsboro but didn’t know if it was signed.
Don Noller of Marion said he has had discussions on both sides of the issue.
“I can’t speak for Doug (Sharp) but his (Sharp’s) take on this is the other community rolled out the red carpet for him,” Noller said. “There’s a price going around that was substantially reduced in the other community.”
“Doug (Sharp) should have come back to us,” Holdeman said.
“I think he (Sharp) thought it was a done deal,” Noller said. “The other community came to him and he didn’t have to go to them (like he would Marion City Council).
“I’m disheartened that a 130-year-old company is leaving.”
Noller continued that even though both Midlands Farm Services employees live out-of-town, they support this community.
In 10 years or so, Sharp might retire, Noller said. The new agent may bring a family with school-aged children to the community.
“There’s a big picture we’re missing here,” Noller said. “My thought is the council thought his (Sharp’s) offer was low. There’s nobody breaking down the door. If we can concede a little bit on price, it might be better.”
“Do you think we’re asking too much out there or what?” Olson asked.
“Based on what we have now, you had to make the decision. This whole thing came down to price. Our neighbors came in lower,” Noller said.
Kjellin said he didn’t know who actually owned the parcel Sharp is considering — the City of Hillsboro or Hillsboro Development Corporation.
What about those who received certain incentives and are now located in the park?
“When we started the industrial park, we had prices on the lots,” Winkler said. “With incentives, we offered a reduced price. What do you think those who met the incentives would think if we give it to someone who didn’t meet the criteria for incentives?
“I hate to see him leave, too. There are farmers who come to town to see him and shop while they’re here.”
“Doug (Kjellin) worked hard with Scully Estates to find other locations,” Todd Heitschmidt of Marion said. “If other business folks want to give more money and help not-for-profit groups buy the ground and give it to developers, then that’s what we need to do.
“In my mind, I don’t think it was the right location or price.”
“There was a cash offer, right?” Mickey Lundy of Marion asked. “Was there a counter offer from the city?”
“There was an attempt,” Kjellin said.
“How many deals are not negotiated?” Lundy asked.
Kjellin explained that the lots at the industrial and business parks are owned by the city, therefore the sale of those lots have to be discussed in public meetings.
“Every time something happens, there should be a lesson learned,” Kjellin said.