South Central Reporter

City of Litchfield Economic Development Commission met June 16.

Here are the minutes provided by the commission:

Class 1 Members Present: Chairman Lonnie Bathurst, Vice-Chairman Paul Osborne, Jen Compton, Dan Fleming, Meghan Hyam, Ken Elmore, Nancy Hyam

Class 1 Members Absent: Lindsay Garner, Tim Burenga, Earl Flack, Ron Norris, John Winans

Class 2 Members Present: Alderman Ray Kellenberger

Class 2 members Absent: Dr. Kelly McClain

Guests Present: Mike Fleming. Present via Teams were National Primers CEO Don Mildrum, CFO Mike Devereaux and legal counsel Robert “Bo” Devereaux

Other City Representatives Present: Mayor Jake Fleming, Alderman Bob Garcia, City Administrator Breann Vazquez, Tourism Coordinator Stacie Peecher, Public Works Coordinator Bill Grider, City Attorney Mike McGinley

New Business: Review of response to RFP-25-01 – Request for Proposals for Sale & Development of City Owned & Optioned Property.

Breann Vazquez said that the city has received a proposal for the industrial park from National Primers. The industrial park was put out for an RFP and this is the only proposal that was received. The proposal is for the sale and development of 200 of the 264 acre campus that the city owns and that has option agreements on.

Don Mildrum, CEO of National Primers, said the company is a manufacturer of ammunition primers, and that there is a large global demand for them. Once the company is fully operational, they expect to manufacture about 2 billion primers per year. He said there are a lot of capabilities for research and development, and opportunities for expansion into other areas and energetics.

Bo Devereaux, Attorney for National Primers, said they spent some time looking in the Metro East and St. Louis areas, and have determined that Litchfield is an attractive place for this plan – it has good access to the highway, and the area workforce will complement what they are trying to achieve.

Vazquez said the RFP response indicates that National Primers has submitted a proposal to build a state-of-the art primer manufacturing facility. They are committed to investing at least $57 million to build the site and it will create 85 full time jobs. The facility will be comprised of two buildings plus six outposts and will also include buffer zones. When they are fully functional, they will be the second largest primer manufacturing facility in the U. S. The facility will be the most technologically advanced to date.

There were several proposal questions that were answered. National Primers is a limited liability company (LLC). Agents for the LLC are Timothy O’Donnell and Dr. Joseph Gira. Key stakeholders are CEO Don Mildrum, CFO Mike Devereaux, Dr. Joseph Gira and Timothy O’Donnell. They also have additional private investors. They have been accepted into DCEO’s EDGE program.

In describing the project, Vazquez mentioned that the company was asked to provide conservative numbers because significant claw backs will be in place. She said that Phase I will be on about 100 acres with a 45,000 sq. ft. primer plant facility and three to six small structures for storage. A buffer zone of 321 feet will be in place and will increase if they go with the Department of Defense standards, which is not required, but is preferred. The city is working with their architects and engineers to make sure they can meet that, as well. The plant needs 72-75 employees to be operational, but they anticipate hiring 85 or more full time employees. They would like to start construction as soon as September of this year as the building plans are finished. Litchfield was originally the second choice of a location, but the first choice did not work out, so when they approached the city a couple of months ago, their building plans were already complete. They will be ready to break ground as soon as they can get all of the permit approvals. It will be about a two-year buildout and they plan to begin operations about a month after completing the facility.

Phase II will be either an expansion of the existing primer product line or a complementary line of business. It includes a 50,000-100,000 sq. ft. facility with the 321--foot buffer zone. The total capital investment is conservatively estimated at $70 million, but could be up to $130 million. The total number of employees is estimated from 75-150, but realistically could be 150-200. This is a five-year buildout plan. There are still uncertainties as to what type of product line will be produced, but is guaranteed within the proposal.

National Primers’ request from the city are first, enterprise zone designation – the area is within the Montgomery County Enterprise Zone and they would fall into the investment category as being eligible for years one through five (tax abatement at 100%), and then years six through 10 (50% abatement). The enterprise zone is set to expire during the length of this, so the city is agreeing to a development agreement to reimburse for any abatements that would have taken place if the enterprise zone is not renewed. Mike Plunkett of Montgomery County is confident that they will renew it. The city will waive local permit and tap fee waivers, but not any third-party plan reviews and inspections that we contract out.

Two hundred acres will be purchased for $2,500 per acre. While this price is fairly low, that is normal in economic development situations. The developers had offers two other competitive communities that offered the land for Phase I at no cost, and it was assumed that Phase II would follow suit. In the Midwest, that is the competitive market for industrial park land.

Jake Fleming asked what would happen if the tariffs went away. Mildrum responded that they have been working on this business model for four years when the tariffs were what they had always been. With tariffs currently in place, and with most countries having an at least 10% tariff raise, it has accelerated demand. Two companies that have been importing into the U.S. have said that, going forward, they are not going to because they can sell their products in the European and Asian markets instead of paying the tariffs. If the tariffs go away, those products can potentially come back into the U.S. and it would have no real effect on their business model.

Vazquez asked Mildrum to discuss about how much has been pre-sold to certified government contractors, the primer shortage and what they’ll be able to produce. Mildrum said the U.S. consumes about 12 billion primers annually and about 5.5 billion primers are imported into the U.S. Two manufacturers are bringing about 4 million primers, so domestically the U.S. does not have enough just to meet its needs. Globally, the demand is between 12-14 billion, which is a conservative figure. National Primers will be able to produce over 2 billion primers each year and that won’t even put a dent in the market. The size of this plant could be doubled and there would still be demand. That is one of the considerations about Litchfield as the city had enough land that, if need be, the company could expand. They will have in their design the ability to add two more production lines inside this facility without having to add on to the building. That will also create the need to increase the buffer zone. That’s what makes Litchfield a good fit, because there’s enough acreage to get the buffer zone correct.

Ken Elmore asked if there are any environmental issues about which the city should be concerned, and how many trucks does the company anticipate to be on the roads, weekly or monthly. Mildrum responded that there will be little environmental impact. With the wastewater treatment system in place, the water that will come out of the facility will actually be cleaner than what goes in. Regarding trucks, they expect about a couple of truck shipments going out each day. Materials will come in monthly. Vazquez elaborated that there are no concerns about airborne environmental issues.

Elmore also asked as far as marketability is concerned, how the plant affect the surrounding area. Vazquez responded that it should make the west side more marketable. She said that most developers do not want to be the first business on one side of an interstate. As far as safety concerns, there is no risk to other developers and other primer plants in the U.S. are within compounds that are required to have buffer zones.

Mildrum explained that the consulting firm’s records, that have been kept since about 1960, tracks every accident, both small and large, that have been investigated. Most happen in other countries that do not have OSHA or safety protocols in place. This will be the fifth facility in the U.S., and it will have Class I explosive, which is the lowest explosive designation. Vazquez said she has spoken extensively with the fire chief, who is up to date on this project, and he is not particularly concerned and does not think the fire department will need any special equipment.

Jen Compton asked if it is all or nothing for Phases I and II. Vazquez responded that the city pushed for both Phases I and II, if we are giving land at this price, so we’re being guaranteed the capital investment for both.

Jake Fleming asked what their commitment was to the human element, in terms of jobs. Mildrum responded that they are using robotics in the mixing room for safety reasons. He does not see AI having an impact on the production side of the operation. They do plan to use AI eventually in research and development, but that is more software. In regard to employees, they want to be a destination company. Turnover is expensive and it’s better to invest in robust benefits instead of looking for new people.

Ray Kellenberger asked if the company is guaranteeing the 80-150 employee hires. Vazquez said that the guarantees in place are for 85 full time positions for Phase I and 75 for Phase II.

Paul Osborne asked what is the breakdown of the $57,000,000 investment. Vazquez said most of it is equipment and building material. Mike Devereaux said that the building will be about $15-16 million, $25 million in equipment, plus consulting fees and land improvements.

There were no further questions for the company, and Mildrum, Mike Devereaux and Bo Devereaux exited the Teams connection.

Vazquez said the city requested make an agreement now for both Phase I and II. It will ultimately save the company to have both phases on the same campus. The claw backs are in place, if they don’t deliver. We put in everything they submitted into their timeline -- their capital investment, the number of employees, those were the big ones. If they, for some reason, do not satisfy any of those terms, the city has a cure period which is for the city and the company to work out a reasonable solution. If there is a significant breach of contract, and the city believes it is not in its best interest to pursue this, then there are claw backs in place. The company is required to follow these metrics for five years after Phase II is operational. Phase II is going to follow about five years after Phase I. We would take back the land with their improvements on it, or we would get an appraisal of the property and the company would pay that amount in liquidated damages. Mike McGinley added that it is fairly straightforward. The goal is to give the city maximum flexibility to be able to do what is its best interest.

In regard to the city’s next steps, Vazquez said the development agreement would have to be passed at the next council meeting, the city needs to exercise its options for the 124 acres of land and then pass a sales contract to sell the 200 acres. That would leave the city with about 40 acres. About 80 acres are developed, but with the removal of the road rights of way and retention pond, it will leave about 60 acres of developed land. The city would retain about 40 acres for an additional user, such as a truck stop or something of that nature.

Vazquez continued and said that the city received a notification from the Federal Emergency Management Agency (FEMA), and the entire area of the industrial park is now slated to be in two flood zones at the time of the next map update. The city has disclosed this information to the developers. These are draft delineations. The maps won’t go into effect until about four years. They spoke with the FEMA contact and were told to send in any comments and they should respond within a few months. They’ve worked with the FEMA engineer and he agreed that this would be a Category X, which is between a 100 and 500-year flood zone. It is not technically a flood plain—it is a warning area, so by law, the company would not be required to carry flood insurance, however lenders of any large industrial user will likely require them to have flood insurance. We were able to get in writing that they would confine the Category X to the channel that runs through the area and a little bit up to the northeast. The city did share that with the company and that seems to have satisfied their lenders. Part of the reason it works for them is because of their buffer zone space needs. If the city instead tries to get several smaller tenants in here, it may run into the issue of some of them needing to build in the area Category X.

Elmore asked if the claw backs are dischargeable in case of bankruptcy. McGinley responded that if the company takes bankruptcy, it would change the area of law that would address the situation. Elmore asked if the city was going to record a memorandum in real estate record that would give the city the second position. McGinley said that the city could look into getting a lien against the property. Vazquez said any significant contractual breach will probably go to court. The city has the development agreement with specific terms laid out. McGinley agreed that it would be subject to contract law.

Lonnie Bathurst talked about the original vision for the use of the land for many manufacturers and said the city needs to ask itself if it is a good use of the land for one manufacturer and 75 jobs. Vazquez responded that there are now 60 developed acres on which a couple of tenants, likely not more than three, could build. Smaller warehouses bring in about 25 employees, depending on the industry. The city also owns a 40-acre parcel and a 12-acre parcel. One parcel has a channel that runs through it making it inaccessible with the other parcel. Bill Grider noted that, if someone needed to access it, a culvert would have to be constructed and we’ve had an estimate of $200,000-$300,000 to construct that. This probably shouldn’t be considered developable acreage as it’s a strange configuration and would be hard to sell. But, if the intent was to get a more diverse selection of warehouses, we can go in that direction.

Bill Grider said he agrees and said the lots are small. Most industries need at least 40 acres for their facilities. 132 acres own to date. Vazquez said part of the reason the city is seriously considering this is because the land cost. Due to the option agreement that was negotiated, the city will have to pay $33,250 per acres for the 124 acres that we have optioned. With National Primers, there is a loss on the land, but the infrastructure is on them, so the only thing the city is required to do is, if the Enterprise Zone was to expire, would be to take on the 50% tax abatement and then waive any local building permits and tap fees. So, the city is more comfortable with losing a little bit more on the land instead of being responsible for building out the infrastructure for other tenants.

With regard to the idea of a truck stop, the city has discussed a secondary entrance with IDOT for a truck stop, but was told that there cannot be any entrances east of Commerce Street, but a right-turn-only area has been identified. The city does have two soft inquiries from truck stops. Jake Fleming asked if it would need to be rezoned for a truck stop. Vazquez responded that it would have to be industrial or commercial.

Bathurst ask that in using this second 100 acres, how much is left that could be developed. Vazquez said 40-45 acres on which you could put a truck stop or a light manufacturer, but it all hinges on access. A truck stop would need about 10 acres, and maybe a small manufacturer for the remaining 30 acres, depending on access.

Vazquez went on to say that the city believes it is a decent proposal, especially with the floodplain issues and the potential infrastructure buildout issues, and feels that it is a strong proposal that would kickoff the westside. But, if this is not the intent of this development, since the city is not completely in at this point, now is the time to ask if we need to reconsider what our goals. Every proposal is going to come with a significant risk. Ten years ago, when this development was started, is when we committed to taking these risks. There is always going to be risks involved with economic development. Megan Hyam commented that she thought this proposal seems to be the lowest risk option. Vazquez noted that since Litchfield was the second pick location, it means our feet are to the fire. National Primers, after five years, has so much into this that it is just as much of a risk to them to not execute.

Paul Osborne asked if Vazquez is still working on the claw backs, and she responded that they have been finalized and sent to them, and that their attorney should be sending them a redline copy back this afternoon.

Elmore said the city should make sure the infrastructure is attainable for the Ross property and get a commitment from Ross that he will work let another potential developer in the future. Vazquez said they want to be sure they have farming access to the north by the County Line Road, so there would have to be some type of easement. The city doesn’t have option agreements, but have started to take a look at it. Bathurst commented that that option might be there to have more land in the future, and asked Vazquez if she has had any calls from Ross. Kellenberger said that he has spoke with Ross and said his concerns was that the original idea was for multiple jobs out there, and Ross asked why not wait to see what else the city could do.

Kellenberger asked if anyone who has approached the city been notified that now we have all the infrastructure we need. Vazquez responded that the only offers of which she’s been made aware is one local company that was interested. She did meet with the company and the State of Illinois, and she said the company acted interested during the meeting, but despite repeated attempts to reach out, she has not heard back from them. An industrial developer was interested in paying $7,500 per acre and have something in there that if he didn’t find a tenant within two years, he would build out a spec building. He had preferred to design the infrastructure himself, but he ended up taking on a larger project and is no longer interested. So, as of right now there is no one else who is interested. It doesn’t mean that we don’t try to market this, but if we do turn this down, we should quickly define a scope of our goal and what marketing approach to use.

Megan Hyam asked that, when this was initially laid out specifically for a bunch of smaller ones, why are we not willing to consider one larger one. Vazquez responded that she thinks, when this was laid out, they were laid out far too small. Representatives from Ameren Illinois and our engineers have made the same comments. This layout is not feasible. Lots will have to be combined. From her understanding, the intent was likely to have some medium-sized lots geared more toward warehousing and such, which is an option, but she doesn’t know if it’s the better option. Hyam asked, why would we say no to this only to hold out for something that hasn’t happened yet. Grider said the lower lots closer to the highway were designed small for retail businesses and restaurants. Farther north, they went more for industry. Vazquez said the vision has since shifted because once she came on staff a couple years ago, this fully developed area was going to be all industrial and the only commercial being considered was a truck stop or something light commercial on the Schmidt parcel. If there’s a strong reason as to why we want to pursue smaller industrial users, she would consider that approach, she just wants to understand the why behind it, so that we know to which direction we are shifting.

Elmore asked if there had been any clarification on the real estate taxes. Vazquez said she hasn’t received anything from the county, but has spoken with the finance consultant and she said, if they are able to tell us about how much they are investing in the building and site plan, then she might be able to do some mockups, but anything we have at this point without the accessor’s office giving us anything, is going to very rough.

Elmore asked about personal property replacement tax and Vazquez said she hasn’t been able to check into that yet.

Kellenberger noted that if this isn’t done, it will continue to cost the city money. If Ross will work with us on the other part of that grounds, we could put in more businesses. This one is guaranteed. But, there’s more than just the ground that we have to look at – we have to look at jobs, housing, etc.

Vazquez said the city has invested just under $16 million in the project. It will have a little over $2 million in bond interest, so if the grants and the reimbursement that we will receive from Ameren Illinois are taken out, the city will have a balance of about $13 million. As far as the land concern, selling for $2,500 an acre, that absolutely is a small amount, but we know that we have $13 million invested and we know that we sold the ground for $25,000 an acre, which is what we purchased it for, then we’d be at $10 million rather than $13 million, but we don’t know what capital investment that’s going to bring in, we don’t know if it’s going to bring in any jobs. That’s why I put the land costs to the side.

Bathurst said it’s an investment. All of us sat here for years and we never thought we would get anything back for it. When NAFTA came along and took the jobs out of this country, anyone in the industry could say that they will put their factory here, if we give them all what they want. Why should we be naïve that think they’re going to give us more than someone else would? It’s just what you do, if you want jobs.

Vazquez said the local company that was looking was interested in a very reduced rate for land cost. The industrial developer was softly offering maybe $7,500 an acre for what we owned and he did not have a tenant in hand. We will be spending $4.1 million to executive these options, but I don’t think you’re going to facilitate this deal or any others with the finite amount of land that we have currently.

Nancy Hyam said that as far as commercial, looks what’s still out there—Thunderbird Circle, Corvette Drive—there are a lot of options for those types of businesses. Realistically, someone is not going to put a restaurant or a retail business on the westside. And, $25,000 an acre for ground, that was a mistake many years ago. I think it was a poor decision on the city at that point.

Compton wanted to clarify that Phase II was not a separate contract and that everything that is in the outline is being executed. Vazquez said that one of the terms of the contract is that, for the duration of the contract, National Primers cannot sell any of the 200 acres.

Megan Hyam asked if the floodplain is only in the northeast corner. Vazquez said it is the whole industrial park, and said that the city did get a confirmation in writing that it will go down to a Category X, that it will be confined to the channels, but the fact is, these are draft delineations and it will take four to five years to get any result and the city is required to disclose.

Mike Fleming asked where does National Primers now operate and Vazquez responded that it is a start-up company. The CEO is based in Colorado, but he will be moving here. They have been in the works for five years and they have employees who work remotely. They do have a loan commitment and significant private investment. Fleming added that he would recommend the committee meet in executive session to get the best financial picture. He said his concern is, while he thinks it is a great project, he wants to make sure the city and taxpayers get the best deal possible for now and for the future.

Fleming also said that he recognizes a few of the names involved with the project—a couple of the principles are involved in city projects now—and he asked what is the status of those projects. Vazquez responded that

Tim O’Donnell is the only one who is involved with this as well as the WGO project downtown. They did just purchase their third property, Next Network’s building. Currently, they are in compliance with their city agreements. They were given 24-month period and the city extended it to match the Next Network’s timeframe. They have had a tuck pointer working to secure the back of the building within the past month, and they’ve been in touch with Gary Baker. Unfortunately, that is one of their smaller projects and they have been more focused on this project. O’Donnell is the only overlap with any city project.

Bathurst asked if there were any more questions and, if not, said he would like to bring the issue to a vote.

Paul Osborne made a motion to enter a developer agreement with National Primers, LLC pursuant to terms as disclosed. The motion was seconded by Nancy Hyam.

Dan Fleming – Bathurst confirmed Fleming’s absentee vote for yes

Jen Compton – yes

Ken Elmore – yes

Megan Hyam – yes

Paul Osborne – yes

Nancy Hyam – yes

Lonnie Bathurst – yes

None were opposed.

Bathhurst declared the motion carried.

Chairman’s Comments: None.

Approval of Minutes: Compton made a motion to approve the minutes from the April 28, 2025 meeting. Osborne seconded the motion.

Mayor’s Report:

Jake Fleming mentioned that he was happy to be here and looked forward to working with the committee. Old Business: None.

City Administrator’s Report: None.

Comments by Commissioners or Guests: Elmore asked, in reference to residential TIFs, is there any way the city can have some type of incentives for those who want to build on empty lots. Vazquez responded that the city can look into that.

Adjournment: Bathurst made a motion, seconded by Osborne, to adjourn at 1:30 p.m.

https://www.cityoflitchfieldil.com/AgendaCenter/ViewFile/Minutes/_06162025-407