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Pa. business park needs new wastewater treatment plant

April 08, 2008|By DON AINES

CHAMBERSBURG, Pa. -- The Cumberland Valley Business Park needs a new wastewater treatment plant and other improvements that could cost more than $10 million in the next decade, but its cash flow and financial position are solid, according to a consultant who addressed the Letterkenny Industrial Development Authority Board of Directors on Monday.

Replacing the 50-year-old plant and related improvements will cost an estimated $6.4 million, said Sean Neill of HR&A, a New York consulting firm. Much of the revenue the development authority has made from the sale and lease of land at the park, and utility revenues paid to the Franklin County General Authority since 1998 -- more than $19 million -- has been spent on sewer, water, railroad and road improvements, he said.

LIDA's financial position and cash flow from utilities should allow it to make the needed improvements by borrowing only about $2 million, Neill said. That kind of money could be obtained through a commercial loan, rather than a more complicated bond issue, he said.

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"This is a step in a different direction. In the past, LIDA operated on a cash basis," Authority Executive Director John Van Horn said.

The authority's circumstances have changed in recent years, however, with LIDA having sold or leased most of its buildings, leaving it largely in the business of selling raw land to companies looking to move into the park.

"There's a significant challenge in trying to sell land instead of buildings," Neill said.

The reduction of the economic development conveyance from the U.S. Department of Defense reduced the amount of land LIDA can market by more than 200 acres with a potential value of $8 million, Neill said.

However, having that land available to Letterkenny Army Depot for its development is a potentially greater benefit over the long term, said David Sciamanna, president of the Chambersburg Area Development Corp.

"If we didn't get that back, there would be no MRAP work," Depot Commander Col. Steven Shapiro said, referring to armored vehicles that are soon to be produced at the depot and in the business park in a partnership with a British defense company.

"A number of tenants in the park are military tenants," Sciamanna said.

The viability of the depot is important to the economic health of the business park and county, he said. The depot also is a big purchaser of utility services from the general authority set up to run the sewer and water service for the depot and business park.

"What happens when the war ends?" County Commissioner Bob Ziobrowski asked.

"I'm not sure how you define this war's end," Shapiro said. "The kinetic phase is clearly going to slow down."

Shapiro said the depot is probably looking at three to five years of "hard blue collar work," but he would not make predictions of what might happen beyond that point. The depot has worked to develop partnerships with companies that will produce future generations of military hardware to diversify its mission, Shapiro said.

"After the last four wars, there has always been a demand for a peace dividend," board member Julio Lecuona said.

The possibility of a slowdown at the depot does not justify not planning for the future, Franklin County Area Development Corp. President L. Michael Ross said.

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