Pataskala officials are trying to find a way to keep a $3.4-million state grant to build a road for development following ProLogis' announcement last week that it is backing out of its deal to help fund it.

Pataskala officials are trying to find a way to keep a $3.4-million state grant to build a road for development following ProLogis' announcement last week that it is backing out of its deal to help fund it.

"In the last 12 months, we've seen a lot of changes in the capital market, and we've seen the economy in the U.S. slow down," said Brian Marsh, senior vice president of ProLogis. "We're looking at all of our projects differently now. With the amount of land we currently own in Licking County, we have good support in Licking County to develop."

Although ProLogis continues to express interest in developing the land, the company hasn't purchased it and could withdraw its plan altogether.

Last year, ProLogis submitted a proposal to Licking County to front $5-million to extend a road through the 525 undeveloped acres in Pataskala, from Broad Street to Etna Parkway. The project was expected to be refunded with $3.4-million from a state Job Ready Sites (JRS) grant, income tax collected through the joint economic-development district (JEDD) and property taxes diverted through a tax-increment-financing (TIF) system.

ProLogis had agreed to front another $3-million for other infrastructure associated with the project, as well as for rail access and interior roads, said Jerry Brems, director of the Licking County Planning Department.

As the cost of the road increased up to nearly $7-million, ProLogis approached its partners at Licking County for help with funding.

County officials said the project was never expected to cost less than $4-million and stated no more funding was available for the extension.

"Last year, we bent over backwards because they (ProLogis) wanted to get moving," Licking County Commissioner Tim Bubb said.

The county hired outside legal help to finish documents and paid for engineering up front to begin the project, he said.

Bubb said after a meeting with ProLogis in March, the county kept calling and it was determined this week that ProLogis no longer could be involved in the road project.

"Licking County is a victim of the economy," Bubb said, adding that the county still hopes to keep the project alive.

Attorney Connie Klema, who represents property owners Howard and Rosemary Emswiler, said the owners still are interested. The grant still is available to Licking County, but under the current restrictions, the road must be built by December 2009.

Bubb said county officials are petitioning the state to see if they could receive an extension on the grant deadlines.

"We need some breathing room because we're exploring other partnerships," Bubb said. "If they'll give us a year or a year-and-a-half "

Brems met with state officials April 25 to see if the county could get an extension on the JRS grant deadlines to keep the project alive. He said the county could solicit another development partner or the city and county could work together to build the road, using bonds that could be repaid through the grant, a JEDD and a TIF -- the same way ProLogis would have been paid back.

"I think the state's attitude was very positive," Brems said. "They are trying to work with us to make the project happen. No commitments were made on either side. But I'm putting together options for a presentation to the state."

Brems said he hopes to meet with state officials again within 10 days to convince them the county still could complete the road for the grant if a deadline extension is granted.

"I still think it's a wonderful site and the state does, too," Klema said.

She said she's not sure what has to change to make the project work, and that's what local officials are investigating now.

Rick Platt, executive director of the Heath-Newark-Licking County Port Authority, said the port authority would help anyway it could.

"That's a general offer," he said. "I'm not sure what that (help) might be."

Platt compared ProLogis' recent announcement with a stock that crashed. "You can either sell it at a lower price or ride it out and wait until the price goes back up," he said.

Platt said the port authority has developed many different projects, and it always comes down to the price of the land and cost of infrastructure.

He said some aspects of the project might need to be shuffled around to ensure the price of the land is reasonable and that infrastructure could be built so the land could be marketed at that price.

Marsh said although ProLogis still is interested in developing there, the company no longer could afford to spend such a large investment and wait to be paid back.

"The project itself hasn't changed," he said. "Long term, we still may end up developing the site. We just can't spend anymore resources, and we don't want to hold anybody up because of the JRS grant (deadlines)."

ProLogis already owns 100 acres in Etna Township in ProLogis Park One, north of U.S. Route 40, and 97 acres in phase 2, south of Route 40.

"We're ready to go on that land within the next few months," Marsh said of the land in Etna. Phase 1 already is being developed, and revenue-sharing agreements are being put in place for phase 2, which could start being developed within a year, he said.

Etna Township trustee Dick Knapp said the township is ready to go to the voters in August to seek approval of a JEDZ (joint economic-development zone), which allows Newark to collect income tax from businesses in the zone and share revenues with Etna Township.

Marsh said the property in phase 2 in Etna already fronts a public road and would require a minimal amount of infrastructure to develop, unlike the 525 acres in Pataskala.

"We're finalizing things in Etna, and by the end of the third or fourth quarter hope to start construction," Marsh said.