A tire recycling plant hopes to open its doors soon in Iola.
To aid the effort, City Council members agreed Monday to provide labor and equipment to improve electric service to the old LeHigh Cement plant on the south edge of town.
The request came from Shane Lamb of FMS North America, Inc. who needs increased electric capacity to accommodate the proposed site at 17 E. Portland St.
But with the approval, expected to cost the city approximately $9,500 in labor and equipment, Council members expressed a desire to draft a policy to follow for future requests.
Lamb was at Monday’s council meeting to discuss his request.
The old cement plant has been vacant for decades, and costs to retrofit the property, has risen above original projections, Lamb said. Demolition of several of the cement silos is also planned.
“We’re trying to save wherever we can,” Lamb said.
Once up and going, the FMS plant will have three divisions: one focusing on industrial tire and rubber recycling (thus requiring an industrial shredder to process and dismantle all tire and recyclable product); an industrial ag tire repair and retreading division, which would utilize an existing warehouse; and a tire recycling equipment manufacturing sales and leasing division.
Lamb said his original estimate, to have as many as 20 employees on staff, may be too low because of increased demand.
There are still several bureaucratic hurdles FMS must clear, including receiving a special use permit from the city. Lamb has filed the permit with the city’s Planning Committee and will address the committee in March. Final approval for the permit would come from the City Council. Special permits also must be obtained from the state, which will take several weeks as well, Lamb said. The city’s assistance with the electric upgrades is conditional upon the successful permit process.
The bulk of Monday’s discussion centered on whether electric incentives are economically beneficial for the city.
Councilman Carl Slaugh brought up the need for a policy for future requests, noting few cities offer electric incentives like Iola.
And without safeguards or cost-benefit analysis done beforehand, “we have no way of assessing to see if the amount we’re paying out is somehow equated to the number of jobs they add, or to the amount of electricity they use,” Slaugh said.
On top of the $9,500 for equipment in materials, the city also would provide transformers, free of charge, necessary to get the upgraded electric service to the property. The city traditionally has borne the cost of the transformers.
The FMS site would require two such transformers, including one priced at more than $18,000, Schinstock said. (The other would cost about $1,000.)
While Slaugh favors offering some incentives, “the goal is if we’re going to provide payment to them, it ought to be with the understanding the electric usage over time will be so we can recover our costs.
