The Colusa City Council last week voted 5-0 to purchase the site of the former Pirelli Cable plant for $3.1 million.
The facility was in operation from 1966 to 2002 and employed hundreds of people. City officials now hope to turn the plant back into gold as a multi-tenant biomaterial facility, but that means taking some financial risks with local taxpayer funds.
“In order for us to move forward with anchor tenants, we have to show true intent of purchasing,” said Colusa Mayor Josh Hill, at the council’s April 20 meeting.
City Manager Jess Cain said the city has applied for state/federal grants to cover the purchase price of the shuttered facility, although current city coffers will put up the non-refundable $50,000 down payment to start escrow.
The facility was appraised between $2.9 and $4.7 million, and this is the first time in nearly two decades the Italy-based Prysmian (Pirelli) has come to the negotiating table to talk about offloading the property, officials said.
The city has leased the property for the past year for $5,000 per month to move forward with funding applications, but granting agencies need to see the city means business and has tenants ready to commit to the project, Cain said.
“The city can back out of it at any given time,” Cain said. “And if we don’t get the grants to purchase the facility, Prysium and the City of Colusa, in the purchase agreement, will come back and we will renegotiate.”
The 200,000 square foot facility was once one of the largest manufacturing sites in Northern California, and is particularly valuable because it is already equipped with services such as gas, electric, water, and sewer, said Colusa Economic Development Director Kristy Levings, who started the project as a consultant in 2019.
“In order to get anything of this capacity, size and services (built from scratch), it would take several years just waiting for PG&E to come to the site, not to mention the tens of millions of dollars,” Levings said.
While officials said there is some risk that the sought-after bioinnovation-hub won’t come to fruition, the risk is worth taking, given the value of the property to the city.
“From 1966 until today, the city has not had control of its destiny, especially at that site,” Levings said.
Levings said converting the former cable plant into an agriculture-related manufacturing site will not only bring jobs to Colusa but will keep the site from further blight.
While the former manufacturing plant needs a great deal of rehabilitation, the city has the capability of doing some of the work with current capabilities and staff, she said.
Tenants will also have some responsibility to develop their sites, she said, and Prysiam has already started the required environmental clean-up.
While the city hopes to cover most of the purchase price and rehab improvements with state and federal grants, the city could also opt to borrow from its own enterprise funds and pay it back over time with little or no interest.
“That is something that could make sense further down the road,” Levings said.
City officials are also banking on more federal funds becoming available under the Biden Administration’s $2 trillion infrastructure spending plan.
“There is going to be a ton of different grants available for economic development that’s coming to the tune of $600 billion,” Cain said. “There is going to be a lot more opportunities out there. But we are just focused on this for right now and this particular path.” §