The Denison Development Alliance board of directors approved the sale of 50 acres out of its Foundation Business Park on State Highway 91 during a special meeting Wednesday afternoon. The land sale is a part of an economic incentive package with R&A Inc. for the development of new shell buildings for future industrial tenants. The incentive package was also approved Wednesday.
This comes as Denison and the region experiences a shortage of available industrial facilities for new tenants and prospective manufacturers looking to relocate or expand in Texoma.
“When you don’t have properties like this to market, it can be quite difficult for growth,” DDA President Tony Kaai said following the meeting.
Kaai said the developer plans to build a series of industrial facilities that can be adapted for a variety of light-industrial uses. Kaai said about 80 to 90 percent of its industrial prospects are looking for existing facilities.
“This approach they are using is for smaller buildings, with smaller tenants,” he said. “If you get five tenants in five 20,000-square-foot buildings, it creates more diversity than just one large building.”
Kaai said under the terms of the agreement the DDA agreed to sell a 50-acre plot of land at its business park for $500,000 which could be rebated as a part of an economic development incentive. For the construction of the first 20,000-square-foot building, the developers will be eligible for $200,000 in rebates for the price of the land purchase.
For each subsequent building of at least 20,000 square feet, the DDA will rebate $100,000 of the cost for the land, up to the $500,000 price tag. Kaai noted that if a building is 40,000 square feet it would be eligible for $200,000 in rebates.
The increased value for the first building is due to infrastructure incentives that are needed for development of the site, Kaai said. Based on the current market, Kaai valued each 20,000-square-foot building at about $1.2 million.
Under the terms of the agreement, the developers may be eligible for an additional $100,000 if 100,000 square feet of industrial space is completed within 48 months. Kaai noted that the agreement hinges on the purchase of the land, which will follow a 60-day due diligence period.
Gary Schragin, a broker and property manager for R&A, said many of the existing facilities in Denison do not meet modern standards for industrial demands. In particular, he said, ceiling height is an issue with local buildings. Schragin said these buildings would likely be attractive to moderately-developed companies that are looking to move up from smaller 5,000- and 10,000-square-foot facilities.
Beyond industrial uses, Schragin said similar developments have seen nonindustrial uses in the past. As an example, he said similar facilities have been used elsewhere as indoor sports facilities. As such, the buildings will be designed to be able to house a number of variable uses, he said.
“We don’t know what we will get but we don’t want to exclude anyone during development,” Schragin said.
With this development, and 14 acres of land that is currently being negotiated on, Kaai said there are only about eight acres of land left in the DDA’s industrial park. Once this area is filled, Kaai said the DDA will change its focus to marketing its 159 acres of industrial land along U.S. Highway 75 and FM 84.