The Colusa City Council on March 23 agreed to borrow $1.7 million from the city’s Utilities Department to complete the purchase of the former Pirelli Cable Company building and property, located on Will S. Green Road.
The loan will allow the city to move forward with plans that have been in the works since 2020 to convert the facility into a hub for the manufacturing of various products, including those made from agricultural byproducts.
The city has leased the property from Prysmian Cable since Sept. 1, 2022, with an option to buy, officials said.
City manager Jesse Cain said half of the $3 million purchase price has come from a grant.
An additional $200,000 will be borrowed to update the sprinkler system in order to house tenants.
The city currently has one tennant and is working on a lease agreement with another for 37,000 sq.ft. of the 200,000 sq.ft. structure, which could create 100 new jobs in the next three years.
“The company is currently operating in Memphis, Tennessee,” Cain said.
City officials said it is not unusual for a government agency to borrow money from other agency funds.
The loan will be paid back over 40 years with the state minimum interest rate, Cain said.
While the council initially hoped to receive a USDA grant for the entire purchase price, having the city’s own money in the project could help the council secure a construction grant to rehabilitate the building and 40-acre property.
“This is not the route I wanted to take initially but given some future grant opportunities, and given the interest (in the property) here lately, I think this is a solid investment for the city,” Cain said.
Repayment of the loan is expected to be about $42,000 annually from the general fund, but Cain anticipates that leasing the property will exceed the loan payment, and possibly allow the city to pay the note off early without penalty.
Mayor Greg Ponciano said the City Council knew going in that to make this project happen, multiple financing options would have to line up just right.
Officials estimate the property to be worth about $10 million. ■