The lingering virus pandemic fallout is continuing to affect El Campo’s future development, manifesting this time with a requested rail park delay.

The long-planned development Southwest International Gateway Business Park still hasn’t started construction of rail or buildings, and now officials aren’t sure if they will be able to this year.

“COVID has presented a delay in beginning construction, and thus a delay in issuing debt to fund such construction (is needed), El Campo City Manager Courtney Sladek told the Leader-News.

Going before city council during its upcoming Monday session is a request to amend a development agreement between the creators of the rail-supported warehouse project and the city of El Campo, moving the finance date from Aug. 1 to Jan. 31, 2021.

“The financing date is the date by which the city approves a bond purchase agreement and the indenture authorizing the PID (Public Improvement District) bonds,” Sladek said. “Additionally, this amendment proposed increasing the allowable PID tax rate to $1.20 per $100.00 per taxable assessed valuation (this will only affect the properties within the PID – which are the properties on the rail spur site).” 

The 540-acre development at the intersection of CR 421 and U.S. 59 has been in the works for four years. Developers hope to capture shippers currently warehousing products in Laredo, off KCS lines.

Construction had been slated to start in April on a 125,000-square-foot distribution center for Vitro Chemicals, a subsidiary of Vitro, one of the world’s largest glass manufacturers, and a 200,000-square-foot speculative warehouse. That was delayed, however, as virtually all business in Texas shut down via the governor’s stay-at-home order issued April 1 in response to the coronavirus pandemic.

The city covered the $397,500 cost of designing water and sewer lines to the project. The City Development Corporation of El Campo and project developers worked to create a Public Improvement District and Municipal Management District to assist with the costs associated with water, sewer, rail linking to the Kansas City Southern line running through Wharton County and road construction.

The PID and MMD assist the development by allowing the park to charge a levy on tenants. That levy makes the payment on construction bonds which have yet to be issued. A $3.125 million bond should have been sold in March, but halted then when COVID started causing nation wide closures.

“It is in the developer’s best interest to proceed, as they own the land. I believe they are doing so with caution due to the current economic conditions caused by COVID,” CDC Executive Director Carolyn Gibson said. “The project is still viable and all parties are working together to make it happen. One thing that will help immensely is the signing of the Mexico Canada Trade Agreement.”

She added, “El Campo has been blessed to have weathered this COVID storm so well. I feel our excellent location, coupled with KC Southern Rail’s unwavering support of the project and the city and CDC’s commitment for infrastructure will be the catalyst for moving it forward.”

Park developers are Stonemont, Ridgeline Property Group, Watco Companies which will operate the short line railroad connecting the buildings to the KCS main line and NAI Partners.

Council will also address whether a city mask order should continue now that the governor has issued a statewide order.

The El Campo City Council meets at 6:30 p.m. Monday in chambers, 315 E. Jackson. The meeting is open to the public with time specifically designated for citizen comments.

Other items before Council include:

• Council appointments to the Grievance Board and City Development Corporation of El Campo board.

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