Greater Paducah Economic Development seeks local backing for $2 million KPDI grant for spec industrial building

Bruce Wilcox, CEO of the Greater Paducah Economic Development Council and representative of the Paducah-McCracken County Industrial Development Authority, presented a proposal on Feb. 11 seeking local partner commitments to fund a speculative industrial building in Industrial Park West should the community receive a $2 million Kentucky Product Development Initiative (KPDI) award.

Wilcox said KPDI is a statewide program administered by the Kentucky Cabinet for Economic Development that provides competitive funding for site and infrastructure projects. He said Paducah’s maximum county-level award is $2 million and the IDA has submitted an application. The IDA requested a letter or evidence of local willingness to cover the remaining cost if the state award is made.

Wilcox discussed preliminary cost estimates prepared with a commercial builder, Agracell: total construction estimates range from about $6.2 million to $7.6 million, with a midpoint near $6.9 million. If granted, the $2 million KPDI award would leave an estimated local funding gap between roughly $4.2 million and $5.6 million depending on final costs. Wilcox explained several funding options the IDA is exploring: Rural Utilities Service (RUS) “bridal lehi” loan programs through local electric providers (Big Rivers Electric and Jackson Purchase Energy) with up to $1 million each at below-market rates; conventional bank financing carried by the IDA with pledged local debt-service commitments; a local bond issuance; or a blended funding approach.

Wilcox said the proposed site is a cleared, publicly owned parcel in Industrial Park West adjacent to rail, utilities and the airport, with recent utility investments (Big Rivers’ $13 million substation upgrade) and prior preparatory work at the Triple Rail site. He described a 100,000-square-foot building as a “sweet spot” for site selectors and noted GPED has fielded requests for building sizes as small as 60,000 square feet and larger expansion possibilities.

Wilcox asked the commission for a letter showing local commitment to funding any grant differential if KPDI funds are awarded and requested the city consider participation in the funding plan; he said the IDA anticipates similar consideration from McCracken County. Wilcox said the application already was submitted and that the site-selection consultant asked for evidence local funding would be available to cover the differential.

Commissioners asked about possible private investors and whether the city’s funds would be recovered if the building were sold; staff and Wilcox said the IDA would design financing to permit recoupment of public funds when feasible and that sale or lease outcomes are standard practice in spec-building projects. Mayor Bridal and commissioners asked staff to prepare written scenarios (debt-service estimates, blended-rate options and payment schedules) for review at the commission’s March meeting so the city could consider a formal letter of support and possible funding commitments.

Wilcox said the speculative building is intended to increase competitiveness for jobs that pay above local averages and that a $2 million KPDI award would make the project financially feasible with additional local support.