Cummins will now have complete control of its plans and up to five years to bring an information technology and digital hub to Greenwood, after the city and company terminated a more-than-year-old project agreement.
Columbus-based Cummins will buy 31 acres of land located at the southeast corner of Interstate 65 and County Line Road for $4.5 million from the City of Greenwood, part of a new agreement between the city and company.
The Greenwood Redevelopment Commission unanimously approved that agreement, including the sale of the 31 acres to Cummins, during a special meeting Thursday morning.
This land is intended to be used for a 100,000-square-foot information technology and digital hub that Cummins announced it would build in May 2019.
Initially, Cummins and Greenwood entered into a project agreement in which the city offered to pay taxpayer-funded incentives totaling more than $10 million.
Greenwood had already purchased the 85-acre property southeast of the highway for $7.7 million, and intended to sell 31 acres to Cummins for a mere $10, essentially giving it to them. The land the company intends to build on is valued at $5 million, according to city documents.
Per the now-terminated project agreement, Cummins was expected to start construction by June this year, but the pandemic changed the project’s course, and it was put on hold for months.
The company had taken several financial hits as a result of the ongoing pandemic. In July, Cummins reported second quarter results that included the largest drop in sales in a decade and the largest quarterly revenue decline in the company’s 101-year history — 38% — due to industry-wide company shutdowns and weak economic activity related to the pandemic, according to The Republic. Third-quarter revenue increased compared to the previous one, but was still down 11% from the same time last year.
Considering the challenges related to the pandemic, Cummins asked to be released from its original project agreement with the city, giving it more time and greater flexibility to determine the best future use for the property, according to a City of Greenwood news release.
The $4.5 million purchase gives Cummins that flexibility, while also compensating Greenwood for expenses related to property acquisition, improvements and professional fees.
The land will now be under the title of Cummins, so the company can decide its own plans and timeline for construction. However, if within the next five years, Cummins decides to not use the land, wants to sell it to a third party or develop it in a way that was not in the original agreement, the City of Greenwood can buy back the land, according to the termination agreement.
Cummins is still obligated to build the information technology and digital hub it promised in the original project agreement, and cannot use the land for other purposes.
The city can also buy back the land if Cummins has not begun “substantial project construction” with an investment of at least $1 million in five years, the termination agreement says.
It remains unclear how much Cummins will invest in the project now though. The original project agreement required the company to invest at least $35 million, and bring in 500 new jobs, paying about $100,000 each, with benefits.
Greenwood will not provide any of the other incentives promised until Cummins starts construction, Greenwood Mayor Mark Myers said Thursday. As part of the $10 million in incentives, the city planned to spend up to $3 million on road improvements and utilities, reimburse the company for construction of a parking lot valued at about $1.8 million and donate $1 million to the Central Nine Career Center in Greenwood.
None of that money has been paid out, and it won’t be until Cummins is physically in Greenwood, Myers said.
Overall though, Myers sees the new agreement with Cummins as a win for both parties. It show the company’s commitment to the city, he said.
“It’s very exciting for me to know that they do own property in the City of Greenwood,” Myers said. “That gives us even more excitement, knowing they own that land, so eventually they will develop out on it.”
Read more of this story in Friday’s Daily Journal.Â
