City, Spire, AZZ close to deal on $8.5m gas line | Local News

They acknowledge that all of the parties involved in bringing the company to Washington were unaware the existing plastic gas line to the industrial park was not robust enough to meet AZZ’s manufacturing requirements.

Under the terms of the new incentive agreement with the manufacturer, Spire will assume the majority of the costs of constructing the new gas line, but the city and AZZ will also contribute $500,000 each. The terms of the original property tax abatements that were part of the incentive package the city offered to lure the company here will also have to be revised, and $1.4 million may have to be covered by payments over the next three years that were originally intended to go to local taxing entities such as Washington’s school, fire and ambulance districts.

City officials acknowledge it took “many tough conversations” to bring the various parties to the negotiation table to get the revised deal worked out.

Last November, the Washington City Council inked a deal to make AZZ the first tenant at Oldenburg Industrial Park with the construction of a new state-of-the art metal coil coating and processing facility on 23 acres. Just a little over six months later, after breaking ground, the city learned of a multi-million-dollar complication with the project.

In May, Spire Inc. informed city officials that the existing gas line to the AZZ site was insufficient to meet the power requirements for the planned facility and that it would cost $8.5 million to build a new gas line to the industrial park.

City Administrator Darren Lamb said that typically when companies are considering building a new facility in town, they submit a request for information, or RFI, with an extensive list of questions for the city, to determine whether a local site would meet their needs.

When AZZ approached the city, however, there was no RFI, according to Community & Economic Development Director Sal Maniaci.

“They just said ‘Hey, give us a real estate brochure and a utility map,’ and that’s what we gave them,” he said.

How that map came to reflect inaccurate information about the gas utility lines to that area of town is a long story that involves different utility companies, according to city officials.

Around 2010, Lamb said, the Missouri Department of Economic Development was heavily promoting its Missouri Certified Sites program. “They really pushed communities that had what they felt were ‘shovel-ready sites’ to go ahead and do this program,” he said.

In an effort to get involved, Washington city officials began gathering information about available commercial real estate sites in town that could be presented to prospective buyers.

In attempting to document utility capacity at what is today Oldenburg Industrial Park, the city contacted Missouri Natural Gas, whose operations have since been acquired by Spire.

“And Missouri Natural Gas basically gave us the information that there was a six-inch line, 20 PSI, with — they put a second sentence in there because we had it in the report — with a maximum of 15,000 CFH, which is cubic feet per hour,” said Lamb.

Although the specification of 15,000 CFH was included in a report for the city, that information was left off of a utility map that was also created as part of the certified site packet, Maniaci explained.

“It just said six-inch gas line, 20 PSI,” Maniaci said. “That was all the information that was on the map.”

Fast forward more than a decade later, Missouri Natural Gas no longer exists to be held to account for its omission of the CFH rating from the utility map — or its other mistakes in documenting utility capacity at the Oldenburg Industrial Park site. Maniaci said he was informed in June by Spire that the 20 PSI was also inaccurate, and the plastic gas line to the industrial park would have never supported it.

City officials are quick to point out that the five miles of high-pressure, steel pipeline now planned to be installed to serve AZZ Precoat will also provide greater gas capacity to other future facilities at the industrial park. Lamb noted, however, that AZZ Precoat’s gas needs are well beyond those…