Agenda - 02-12-2008-2 - Laserfiche WebLink

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Section Five -Site Review I. Characteristics of Successful Sites The researcher was charged with leading an effort to identify the most feasible site for development of a shared-use food and agricultural facility in the four-county area. Several key factors were used to evaluate if certain sites might be suitable for the project, based upon characteristics of successful examples elsewhere in the country. Characteristics of successful sites include form of site ownership, affordability (including acquisition costs and renovation costs), access to utilities, suitability and size of floor plan, location in proximity to users and ease of access, and proximity to service providers and others who could provide project support. Site Ownership All of the successful shared use food processing centers the researcher is aware of are owned by local governments, state governments, or nonprofit agencies. There are many good reasons for this. First of all, benefits from these projects are designed to accrue primarily to the clients who access the facility for services, and not to the owner of the project or site. Regional shared use facilities struggle to break even from user fees, even when the clients themselves are able to make profits, expand their businesses, and create jobs and income. There is an inherent tension between the project's need to charge reasonable use fees and its clients who desire to minimize costs and increase business profits. The tension is further exacerbated if a landlord desirous of profitable rents also is introduced to the mix. Additionally, projects that will rely on grants from foundations and governments are at a disadvantage when the physical infrastructure is owned by afor-profit entity: Most grant funds are eligible only to 501-c-3 nonprofit corporations or governmental entities. Very few grant making organizations would be willing to invest in fixed infrastructure improvements at a site owned by a private entity. Furthermore, a project will likely need to secure along-term (ca. 10-year or more) lease or other legal agreement to entice grant makers to invest in any project, whether or not the site is owned by a nonprofit or governmental agency. On a balance sheet, securing a site on a nominal long-term lease is very favorable from the perspective of grant makers. In this case, the existing physical infrastructure can be considered a committed asset of the project, and in certain cases the valuation of the building and land can be counted as a match toward grants. In a traditional private lease agreement, the value of the rent cost is a liability rather than an asset to the project, and funds would be necessary to secure rent before income from use fees .begin. Cost Two important site costs must be considered before securing the project location: acquisition costs and physical infrastructure improvement costs. In most existing cases, initial acquisition costs for shared use food processing centers have been either nominal (such as a $1/year lease), or far below market rates. Project 36