Meeting 10/10/16 - Chillicothe City Council members
discussed but took no action on an ordinance authorizing a cooperative agreement with Sonoco Plastics, Inc., in
regard to upgrading the railway serving the plant and all acts necessary to carry out the terms of the agreement. The project is expected to result in the
addition of eight jobs at the plant. The city owns the railway that services Sonoco. Attempts to obtain Community
Development Block Grant funding for the project were made, but the city and Sonoco had encountered significant delays and such funding did not appear to be available on a timely basis. The cost of the project, including all soft costs and construction costs, is estimated at $471,000, with the city paying $70,000 as matching money on the project.
Although Sonoco would be providing the largest share of the
rail's construction cost, to expedite the project, Sonoco is willing to donate to the city an amount equal to the cost of the project less the $70,000 to be paid by the city. The project includes construction of a new product rail spur. The spur will allow the facility to stage three additional railcars on the site to hold raw materials for the business. No action was taken during the meeting as the contract is still being reviewed. It is expected to be presented again at the
council's next meeting.
Plans Rail Spur Expansion
By Catherine Stortz Ripley
June 20, 2016
CAPTION: Sonoco Plastics, located in the Chillicothe Industrial Park, is applying for a Community Development Block Grant to assist in construction of second rail spur to its facility.
Photo: Catherine Stortz Ripley
Sonoco Plastics of Chillicothe is applying for a $180,000 Community Development Block Grant to help fund an overall $2 million project that includes building a rail spur to its site in the Chillicothe Industrial Park. The company has asked the city to support the project by providing a $70,000 match for the grant. The
city's match could come in the form of cash, in-kind contributions, or a combination of both. The company notified the city about its expansion plan about 18 months ago and since that time has added nine jobs. An additional nine
jobs are expected to be added with the creation of a new rail spur.
The Chillicothe Sonoco plant has more than 130 employees at present.
The city recently conducted a public hearing about the
city's participation in the block grant. As part of the hearing process, citizens were asked to verbally assist in the completion of the needs assessment document. The document would show CDBG what the residents feel are the strengths and weaknesses of the community. The city sought as much local participation as possible in order to reflect the true desires of the community as a whole, as well as the comments relating the proposed project application. At least 51 percent of the funds must be used to benefit low-and-moderate income persons.
The project will include construction of a new product rail spur to be built at Sonoco Plastics, Inc., 451 Corporate Drive in southeast Chillicothe. The spur would allow the facility to stage three additional railcars on the site to hold raw materials for the business. The work also includes construction of a gravel road adjacent to the spur.
Construction would take place on the east side of the building. The estimated cost of the spur is $471,000. Terry Rumery, an economic developer contracted by the city of Chillicothe, spoke last week in support of the grant request and stated that the grant requires a local community match of 15 percent of the overall project cost. He suggested that the city consider providing in-kind contributions such as using existing rails it owns and the cost of easement. The city would need to identify the value of the rails and whatever else is used for in-kind. Any cash funds needed to fulfill the remaining 15 percent could come from the
city's railroad fund, Rumery suggested. Rumery stated that Sonoco Plastics is the fastest-growing plant in Chillicothe and has had two expansions since its initial building size of 50,000 square feet. The company, with its most recent expansion, now encompasses 225,000 square feet.
"They have made several millions of dollars in investment and they are making nearly $2 million investment in
this," Rumery said. City Administrator Ike Holland stated the company will realize a six-figure savings by implementing the second rail spur, rather than using tractor trailer trucks.
"They will recoup that $2 million, eventually, in cost savings by doing
this," Holland stated.
Chillicothe City Council members discussed the application last week and are expected to take action at their meeting next week.
"This council has been very supportive of our industry in the industrial
park... ensuring that jobs stay here in Chillicothe and that jobs
grow," Holland stated.
Plastics company adding jobs, building 75K square-foot expansion
March 15, 2012
Sonoco Plastics Director of Operations Milton Francis announced the
company's expansion project to the community on Thursday morning.
C-T Photo / Drew Van Dyke
Several prominent members of the local community gathered at the Chillicothe Country Club on Thursday morning (March 15), to play witnesses to the revelation of Sonoco
Plastics' expansion plans within the city's industrial park in the near future.
The plant (once known as APT, before being bought out in 2006 by multi-billion dollar global provider Sonoco
Plastics) announced that they will be expanding their current structure by 75,000 square-feet to the west of their current facility and that this expansion will add an additional 13-14 positions to the operation. Since August of 2011, said director of operations for Sonoco Plastics Milton Francis (who was in attendance on Tuesday morning), the company will have added 25 positions at the Chillicothe facility by completion.
"We started discussions in 2010. We plan to have this completed by the May/June 
timeframe." In 2003, APT stated need for another factory building in the industrial park. Chillicothe Development, Inc. (CDC) noted that gaining finances for the project was possible. The USDA was contacted, and the government entity provided several loans for the build purchase. Multiple local banks also agreed to give the city the loans they needed to pay for the 2003 building. This funding, however, came up close to $300,000 short of the needed fiscals, so the group went to the city of Chillicothe, requesting financial assistance. They agreed to help find funds for the effort.
Sonoco Plastics, along Corporate Drive in Chillicothe, announced on Thursday morning plans to add an additional 75,000 square-foot building to their locale by May or June of 2012. The project will add 13-14 jobs to the Chillicothe plant, and the building will cost $3.5 million to erect. A loan for $5.8 million was taken out with Bank Midwest for the project, as well as to pay off additional loans from a prior expansion.
C-T Photo / Drew Van Dyke 03 15 12