Kings County Places $20 M Bet on Michelin Expansion

At a price of $1.9 million, 60 of 94-acres that are part of the Kings County Municipal Airport will be rezoned M2 and owned by Michelin by October, 2015, or no later than April 1, 2016.

July 28 2014 Frank
Magazine depiction
indicating County's
eagerness for Michelin deal

The agreement was signed, sealed and delivered by Warden Brothers and her Deputy Hirtle on September 22, immediately following a split vote of council.

With that portion gone the smaller parcel remaining becomes unusable as a municipal airport.

Councillors Atwater, Bishop, Winsor and I voted against executing the agreement. Councillor VanRooyen, out of the country on FCM business when the Special Council meeting was called, was also opposed. Why did the familiar 6 to 5 split in opinion so common in council chambers occur this time?

Yesterday, it was a matter of how much a councillor wanted to gamble with a $20 M asset.

Throughout the debate, the question remained of who would compensate the taxpayers of Kings County for loss of large capital investments at the airport if in the end there's no Michelin expansion to offset this loss.

Those opposed to the agreement promoted by both the CAO and Warden Brothers wanted simple conditions to the sale. These conditions would ensure the land, once sold, would be used for the intended purpose---an expansion of the tire manufacturing line---resulting in hundreds of needed jobs. With such conditions all councillors could have happily endorsed the agreement. If a guarantee of expansion could not be confirmed within a defined yet flexible timeframe, we wanted the land and airport to remain as a key asset of Kings County taxpayers.

The Final Report of CBCL's Waterville Airport Relocation Study (May 2013) shows 19 full time equivalent jobs at the airport and over a million spent annually on labour, goods and services. In addition it highlights annual owner operator draws close to $600 thousand (2012).

There may be a big Michelin bird in the bush but yesterday Kings County Council squandered an opportunity to keep a firm hold on a profitable and valuable airport until the bigger opportunity was in hand.

Warden Brothers and Deputy Hirtle were supported in their endorsement of Michelin's agreement by Councillors Best, Ennis, Lloyd and MacQuarrie. Supported by the CAO, the six put hope, faith and belief in the tire giant's stated intent, if not guarantee, to expand. That was a bold move. Perhaps it's a move these six would not have made if their personal assets had been on the line.

Each and every Kings County councillor is united in a desire to see Michelin expand. If that happens, the shortfalls of the agreement signed with Michelin will not matter. In the meantime I am greatly concerned.

If at the point of the sale's completion Kings County ends up with a 1.9 million dollar parking lot instead of the 20 million dollar asset the airport currently represents the good news spin placed by the Warden on the sale will no longer apply. Conditions tying the sale to a confirmed expansion and/or compensation for the lost of the airport in the absence of an expansion was simply good business that did not come to pass.

True, governments are keen to have big employers like Michelin in their neighbourhood. An example of balance however can be seen in Lexington, South Carolina, if not in Kings County. There government spent $47M to adjusting a highway system to facilitate expansion. However, a condition of repayment was part of that deal. When after 10-years expansion had not yet occurred repayment was brought into play and a plant was built.

What is known here is it's to Michelin's advantage to have land available.

Michelin's Grant Ferguson has succeeded in positioning his Waterville Plant to compete for the investment funds needed for any expansion. That's the silver, if precarious, lining here.

With fingers and toes crossed I hope for his success. Meanwhile, my opinion is Kings County business needs to be conducted on more solid ground than a wing and a prayer.