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Janesville official points to jobs in touting $3.3 million Seneca Foods plan

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Marcia Nelesen
June 20, 2013

— Acting City Manager Jay Winzenz recalled the challenge thrown to him by Paul Palmby, Seneca Foods chief operating officer in Janesville.

Palmby wanted Seneca to build a new food processing and packaging line here rather than at a competing location.

“He said, ‘Jay, I want you to tell me the best you can do,” Winzenz recalled Palmby saying. “Wastewater is a big issue to us.”

“He was pretty upfront about that,” Winzenz said.

The city’s solution is to propose building a $3.3 million anaerobic pretreatment lagoon to slash the food processing company’s wastewater costs.

The agreement with Seneca, 418 E. Conde St., will be presented to the Janesville City Council on Monday.

The new line is part of a Seneca plan to package some of its fruits and vegetables in pouches rather than cans. The new packaging pouches are touted as a green alternative, Winzenz said.

Seneca’s monthly wastewater costs were estimated at $24,000 to $60,000 for adding a single processing line and $70,000 to $118,000 for adding five lines. The pretreatment facility would cut those costs about 60 percent.

One line produces 250,000 to 300,00 gallons of wastewater a day.

Seneca will buy methane produced by the treatment facility and blend it with natural gas to burn in Seneca’s boilers.

City staff estimate additional wastewater revenue and proceeds from methane gas sales will pay for the $3.3 million facility after about a dozen years.

An added benefit: The lagoon—essentially a small wastewater treatment plant—could be used by other food service businesses.

“Our development team has crafted a creative, environmentally sensitive program that meets the needs of a valued industry and the city,” Winzenz said in a memo. “The program uses the wastewater from Seneca to create a renewable resource—methane—which will reduce Seneca’s reliance on the finite resource—natural gas.”

If approved, the line would be built by spring.

Now, Seneca uses its wastewater to irrigate surrounding farm fields when the ground is not frozen. Wastewater goes to the city’s treatment facility the remaining months.

Under the TIF agreement, the city would:

-- Provide about $303,275 in a forgivable loan over the next 10 years.

-- Build a covered, $3.3 million anaerobic lagoon on 6.7 acres the city owns across the street from Seneca. Bacteria inside the facility would eat the plant material in the water and produce methane.

Water would cycle through the lagoon in about 10 days. Food products in the water would be reduced by 80 percent and solids by 50 percent. The city estimates sales of $150,000 a year in methane with one new packaging line and $185,000 with all five lines.

-- Sell 230,000 to 600,000 more gallons of water per year, offsetting lagging water sales in recent years.

Seneca would:

-- Build an 80,000-square-foot addition to what is now a 1.1 million-square-foot facility. The addition could accommodate five lines. Each production line costs about $10 million.

-- Guarantee annual property tax payments of $30,327 a year.

-- Guarantee 25 new jobs for 10 years. If all five lines are built, 78 jobs would be added.

-- Buy city-produced methane gas at market rates.

The state is:

-- Working on an agreement to grant Seneca Development Opportunity Zone tax credits based on job creation and capital investment, said Tom Thieding, communications manager for the Wisconsin Development Economic Corp.

Winzenz said city officials first met with Seneca in March and were told a Seneca plant in Peyette, Idaho, was competing for the new line.

Peyette can accommodate one line but no additional lines without an addition, but Peyette’s water treatment costs were lower, Winzenz said.

Seneca produces what is termed high-strength wastewater, and the wastewater from a new line would put the city’s treatment plant at capacity for high-strength wastewater, Winzenz said.

An additional aeration basin would cost about $4.2 million but would be needed only five months of the year when Seneca cannot put wastewater on fields.

Winzenz researched pretreatment alternatives with a waste energy component. Beaver Dam built such a facility in cooperation with Kraft Foods to handle whey from a dairy facility.

Janesville hired a consultant to draw plans.

This would not be a standard TIF deal, Winzenz said.

The city was on a tight timetable, and staff took a creative approach at a time when the city did not have an economic development director, he added.

“We were pushing on our engineers pretty hard.

“We wouldn’t have come close if we had not found a way to deal with this wastewater,” Winzenz said.

“It took thinking outside the box a little bit. I’m excited about it, and I’m proud of it.”

A pretreatment facility also is a new venture for Seneca, which was great to work with, Winzenz said.

The facility also could be used to lure other food processors, a huge plus, Winzenz said. Land is available in the area.

“We can use this to market because, really, a food processor coming in now has an opportunity,” Winzenz said.

Some might consider the city’s efforts a lot of hoops and a lot of money for 25 jobs.

Winzenz pointed out Seneca’s 420 employees and the potential for more lines.

“They’re a huge national corporation,” Winzenz said. “They have close to 20 facilities across the country.”

The expansion allows the company to change from a seasonal to a year-round operation, further cementing the city’s commitment to Janesville, Winzenz said.

The addition would create local contracting jobs and support local growers.

“Janesville, Rock County, is an agricultural area,” Winzenz said. “It all kind of fits together with the potential of a food processing cluster in that particular area.

“Without the wastewater lagoon, it would not be happening.”


 

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