Anatomy of a $70 million Deal
By Ron Arnold: Executive Director
Daviess County Economic Development Corporation
When a team hits a winning streak, people often ask, “How did you do that?” Daviess County and Washington Indiana have recently enjoyed a number of consecutive expansions and outright wins, attracting this inevitable question.
The region clearly benefits from the opening of I-69 through the county, but the real cause for success can be summed up in one four-letter word: team.
One recent team win in particular – the $70 million expansion of the Grain Process Corporation (GPC) facility in Washington – comes to mind. Several individuals and organizations came together to make this happen and score a major win up against some well-funded and intense varsity players in economic development.
GPC currently processes upwards of 100,000 bushels of corn a day. Because of GPC, corn-rich Daviess County actually has become a corn-importer from surrounding counties and farms. Daviess County first won the GPC expansion project in a multi-state shootout in 1998, which laid the foundation for possible future growth.
A subsidiary of the Kent Corporation, the Washington-based $500 million wet mill holds a high reputation for its corn-based products, which include maltodextrins, corn syrup solids and starches, corn oil, ethyl alcohol and animal feeds. The local Indiana operation already employs 150 people and makes a solid positive economic and community partner impact on the region.
So when the GPC board of directors let it be known that it was considering a major expansion, it was time for a full court press.
Job one in this process was to build a team. Joe Wellman, the Mayor of Washington, and the county commissioners (with Tony Wichman serving as president of the Commissioners) already have a team rhythm in place to work together to land economic development deals. So we had a lineup advantage there already.
GPC milling processes require a ready supply of energy. So we were fortunate to tap Ken Frye, general manager of Daviess-Martin REMC, and Chuck Martindale and Harold Gutzwiller of Hoosier Energy, to put together an attractive discounted rate to provide up to five additional megawatts of power. As Ken noted, the possibility of federal agency-driven energy price increases could have been a deal-killer. The temporary energy discounts sweetened the deal.
Washington is fortunate to have a long history of transportation and logistics driven initially by railroads. The east-west rail line through Washington still represents a major advantage, and GPC will be able to use new siding and a cross-deck loading facility when the expansion comes online. That, together with the north-south freight access of I-69, was another deal sweetener. By aggressively maintaining rail service, Daviess County had an edge.
Back to the team, we had the benefit of strong and critical support from the Radius Indiana regional economic development group, led by former Lt. Governor Becky Skillman (who holds a long record of economic development success) and development manager Jeremy Sowders. This was augmented and strengthened by solid leadership and resources of the Indiana Economic Development Corporation (IEDC), provided by Susan Vaughn and Pam Fisher.
All of the elements of this team added investment initiatives, negotiated conditional tax credits, performance-based tax abatements and other deal-makers.
All of the team’s efforts were greatly furthered when Gov. Mike Pence personally took part, making a personal visit to Kent and GPC executives in Iowa. The considerable strategic impact of having a state governor weigh in cannot be understated. As Gage Kent, the chairman and CEO of the Kent Corporation later said, “The business friendly leadership of Indiana Governor Mike Pence and his economic development team showed us that they were committed to helping GPC grow. We were also impressed with the local economic development team and the community members.”
Our out-of-state competition put together an impressive offense, but in the end our team was able to put enough critical shots on goal to win. Take one or elements out of our team, and there could have been a much different outcome. Each part played a critical role, and the sum of effective collaboration – from top to bottom – produced a win – a win for Washington and Daviess County, and a major win for Indiana.