By By JOHN EBY / Niles Daily Star
DOWAGIAC - Dowagiac Monday night sold property designated for a peak power plant to a St. Joseph family for development of a $1.5 million recycling facility that will employ 20 people.
City Council approved the sale of 22.21 acres in the industrial park for $27,262.50, or $1,250 per acre.
Lydia Demski and her son, Mike Demski, operators of Scope Services, intend to build a new industrial plant of approximately 20,000 square feet in their first phase.
The project involves a facility to refine and manufacture petroleum-based products and recycle tires and glass.
City Economic Development Director Sandra Gower said the Demskis are particularly interested in lots A and B because of their rail access. Their plans include developing a rail spur.
City Manager William H. Nelson Jr. said the developers anticipate future phases which will create both more jobs and more investment in real and personal property.
Under terms of the agreement for sale of real estate, a building permit must be secured and construction started within one year of the closing date.
Any construction must comply with the industrial park's restrictive covenants.
Nelson said the project has the benefit of not only creating new investment and jobs in Dowagiac, but also providing a $10,000 credit per job for a total of $200,000 toward forgiving a state loan which developed the industrial park's infrastructure.
The property being purchased by the Demskis was previously approved for development of a peak power plant by IEP Chieftain under a lease arrangement with the city.
With the time frame for the power project remaining "uncertain, given the economy and given what's happened with the power industry more specifically," Nelson advised council members, "We have a prospect that's live and ready to roll tomorrow. If interest in the power plant is resurrected, the city owns other property in the industrial park that would be suitable for development of that project."
Council members questioned the grinding process used on tires.
Nelson said the Demskis have "a number of ventures," from White Pigeon to Virginia, "and a good track record of running good businesses."
City officials visited the "very similar" operation in St. Joseph County, Mich.