Kokomo Tribune; Kokomo, Indiana

March 9, 2014

Farm Credit ready for a move

New office will be close to U.S. 31 bypass

By Scott Smith Kokomo Tribune
Kokomo Tribune

---- — After 16 years of renting in the same city location, Farm Credit Services’s Kokomo office will be moving a bit closer to its clients in the countryside.

This spring, construction should start on a new office at 300 East and Ind. 22, a location the head of the Kokomo office, assistant vice president Brian Troyer, said is worth the hefty price paid for three prime acres near the new U.S. 31 bypass.

“It has kind of been difficult to get out without skirting around [Kokomo], to get up to farmers in Miami and Cass County,” Troyer said. “We wanted to locate closer to them, out near the Markland interchange.”

Last year, Farm Credit Mid-America purchased the three-acre parcel on the northeast corner of 300 East and Ind. 22 for $250,000. With prime farm land selling for around $10,000 an acre in large parcels, the price markup seems big, until the location and zoning are considered.

There’s also the size of the company purchasing the land; Farm Credit Mid-America is a $19 billion agriculture lending cooperative serving more than 95,000 farmers, agribusinesses and rural residents throughout Indiana, Ohio, Kentucky and Tennessee. They provide loans for farm real estate financing, operating loans, and equipment and livestock loans.

Farm Credit purchased the parcel from local farmer Ronald Smith, who previously had the land rezoned in anticipation of another business purchasing the parcel. Smith purchased the land several years ago from the Roman Catholic Church, which had considered the site for a church.

The city of Kokomo ends at 300 East, which means Farm Credit will be locating in unincorporated Howard County. The new office will be on a septic system since the city hasn’t extended sewers out to the new bypass, and probably won’t for the foreseeable future.

“It seems like a lot to pay for the location, but in our opinion, the city of Kokomo is going to grow in that direction,” Troyer said, adding that owning the location will end up being less costly in the long run than continuing to pay rent at the current location, 1914 S. Dixon Road.

The move is also possible because the new office will be located outside the area along the bypass covered by the city’s moratorium on new commercial and retail business.

“We were going to relocate anyway, because we don’t own this building,” Troyer said. “We tried to think about 10 years from now and what would be most advantageous.”

“We see it as a customer enhancement,” he added. “It will improve their experience with Farm Credit.”

The new location is also a reflection of the financial strength of the member-owned company, which has benefitted from the overall growth in the agriculture industry.

The company earned $288.6 million in 2012 — a record — more than double the firm’s profits in 2009, according to Farm Credit’s annual financial report.

“While the general economy has been suffering over the past five years, agriculture has been red hot and we’ve certainly had a lot of growth because of that,” Troyer said. “If 100 acres sold for $400,000 10 years ago, today it would be a $1 million transaction.”

Scott Smith is on Twitter @JasonSSmith1 and can be reached at scott.smith@kokomotribune.com.