Home News Local News Locals react to possible Ergon land purchase

Locals react to possible Ergon land purchase

Ergon Asphalt and Emulsions Inc. would plant trees and do other landscaping around the Roswell Air Center property under a sales agreement being considered by the Roswell City Council. (Lisa Dunlap Photo)

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A couple of Roswell businessmen spoke against the idea of selling Roswell Air Center property to a private company at a Thursday public meeting, an idea favored by City Manager Joe Neeb and other city staff.

“I would like to recommend that the sale of this property be rejected and that the city instead approach Ergon (Asphalt and Emulsions Inc.) with appropriate terms that would provide them with the security they need, as well as clawbacks that would help protect the city over the long-term from any changes,” said Kyle Armstrong during the Thursday meeting of the Roswell City Council Legal Committee.

The sale of about 13.4 acres of Air Center land to Ergon Asphalt and Emulsions Inc. has been discussed at several city commission and committee meetings since April and was under negotiations for more than three years before being made public.

The ordinance regarding the sale, as well as a related rail spur maintenance agreement, are due to be considered during an Oct. 8 Roswell City Council meeting.

Drew Brooks, Ergon senior vice president for business development, has stated in a letter to the city that the sale is necessary for the company’s future expansion plans here.

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Those plans involve an investment of more than $2.5 million to three lots, which have a site address of 49 E. Martin St. The company also expects to hire one to two more employees to add to its current workforce of six.

Property improvements are part of the reason Neeb has given for supporting the sale. Another is that the parcels would go onto property tax rolls once privately owned.

The deal isn’t as popular among some local business people who have been involved with development efforts at the Roswell Air Center. They are saying the sale is putting short-term gain ahead of the long-term benefits of owning that parcel.

Kyle Armstrong is the president of Armstrong Energy Corp. of Roswell. He was a member of the former Roswell Industrial Air Center Task Force, which in 2017 looked into ways to increase job growth and economic development at the Air Center and later spearheaded successful efforts to pass state legislation that would allow the Air Center to be managed by a regional airport authority. Discussions about how or whether that authority might be formed are still underway.

Armstrong said the city has not done the strategic planning or the asset and property management evaluations needed to determine if the sale makes sense for the long term, especially given that portions of two city-owned rail spurs run through the property.

Armstrong also said the task force members spoke with three different airport governance bodies in Louisiana in 2017 and asked them about whether they would consider selling parcels of their airport property, with all giving an “emphatic, no.”

“You are talking about selling taxpayer property without having the idea whether or not that’s going to be the best use for the city, not knowing what any future needs might be, not knowing if you will be able to address structures that will be placed on there that could hinder the city doing things down the line,” Armstrong said.

Mortgage company manager Kurt Gass also expressed his opposition. He said that he considers the first and the lower of two appraisals “not valid” because it did not take into account the rail spurs.

“We have been told by multiple experts, do not sell an asset that you already have. You have lost economic control,” Gass said. “And so I am asking you to reject this and keep the control of this asset and keep the possibility of great economic benefit to the city of Roswell and Chaves County by holding onto this. It is a really important piece of land with rail spurs into it.”

City councilors and Legal Committee members Judy Stubbs and George Peterson also said they have questions or concerns about the proposed agreements, including the purchase price, the effects on neighbors and what might happen to the use of the property in the future if privately owned.

Given that the City Council already decided to hold the public hearing, the group voted 3-1 to forward the sale and rail spur maintenance agreements to the entire City Council. But the sale agreement will move forward without a committee recommendation. Peterson voted against both items.

Under the terms of the rail spur agreement, Ergon would agree to reimburse the city up to $20,000 a year for work on the rail lines. The agreement would be for one year, with up to four years of renewals.

Under the current lease, which would expire in 2028, the company pays $5,000 a year for rail line maintenance. Mayor Dennis Kintigh noted, however, that the company has sometimes paid more than $5,000 for maintenance.

Under the land sale agreement, Ergon would pay $340,000 for property, which is the value given by the first appraisal but $90,000 below the second appraisal. Its current lease is for $1,030 a month.

As justification for offering a price lower than the second appraisal, Brooks wrote that the company will add a new storage tank and do improvements to the site at a cost of $2.5 million. That expansion, Brooks wrote, would be expected to increase sales taxes and equipment taxes that the company now pays, which are about $100,000 to $120,000 a year.

Ergon also would build a new road to provide access to Earl Cummings Loop so that the portion of Airport Road that crosses the rail spurs on their parcels could be closed, a project estimated to cost $150,000. In addition, the company would add trees or do other landscaping around the property to provide a buffer between the site and nearby homes at an estimated cost of $60,000.

Neeb also mentioned Thursday that the city is asking for the right of first refusal to purchase the site should Ergon ever decide to sell the land so that the property could not be used in a way that the city did not want.

Brooks of Ergon said he considers the transaction a “great value for the city” and will reserve further comments until the public hearing.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.