The McGinness Innovation Park: How much will it cost?

At Tuesday's meeting, Columbia Borough Council voted to close on a $5.4 million loan aimed at developing the McGinness Innovation Park. The loan is paired with a $3.35 million grant. Both amounts, which total $8.75 million, are funded through a Business in Our Sites (BIOS) program administered by the Commonwealth Financing Authority, which provides funds to municipalities and other entities to prepare sites for development. In order to receive the grant, the borough was required to close on the loan.

Columbia Borough purchased the 58-acre McGinness property for $1.5 million on August 20, 2021.

Following is a breakdown of costs associated with the project:

The estimate to develop the tract as of summer 2022 was $12 million, according to BizNewsPA (7/20/22). Columbia initially paid $1.5 million to purchase the property. The total of those two figures is $13.5 million.

Along the way, the borough received a $1 million Department of Community and Economic Development (DCED) grant from the state. Deduct that from the $13.5 million above to get $12.5 million.

As mentioned above, the borough was approved for a $3.35 million BIOS grant. So, deduct that from the $12.5 million to get $9.15 million. That's the total amount the borough will owe. The amount includes the $5.4 million loan that was approved, since it must be paid back, most likely with interest (see below).

These figures could vary somewhat, but unless the borough somehow secures yet another grant, $9.15 million is a good "ballpark" figure. Officials hope that leasing or selling parcels (or possibly the whole property) will generate revenue. If that can be done, the $9.15 million figure would certainly be mitigated - or, ideally, eliminated.

Over the past few years, the borough has already spent about half a million on testing and maintenance of the property, asbestos abatement and demolition of the former McGinness home, the purchase and demolition of 700 Franklin Street and other buildings, as well as the purchase of an additional tract along Plane Street- just to get the project started.

Regarding the $5.4 million loan, the borough has 5 years to pay it back. Columbia will need to reimburse the state about $158,000 for every acre sold (LNP 3/5/22). After five years, the state will amortize the loan over 15 years and charge 3% interest.

In sum, this project could be costly for a long time.