Jan. 28--The Modesto City Council on Tuesday looked past its pressing financial concerns and approved a pair of business-friendly proposals aimed at spurring economic development in the years ahead.

One would allow the city's major industrial employers to create a sewage treatment capacity bank that would encourage them to reduce their water use to free space for new businesses.

The second advanced a long-awaited business park at a former industrial site off Kansas Avenue that for 40 years housed a factory that produced fertilizer, television picture tubes and safety flares. Those uses contaminated the site with barium, arsenic and hydrocarbons that formed from the burning of trash and other products.

Both measures passed on 6-0 council votes. Councilman Will O'Bryant was absent.

Modesto's main industrial water users have pressed the city to create a capacity exchange program since 2006, when Modesto began preparing a series of sewer rate hikes meant to pay for improvements to its treatment system.

Those hikes show up on residents' monthly utility bills in increments of a few dollars. They hit the industrial employers as a group to the tune of millions of dollars a year.

A lack of sewage capacity has limited Modesto's ability to lure employers in recent years. Some companies, such as Del Monte Foods and E.&J. Gallo Winery, have complained that they don't have room to grow.

The capacity bank would enable them to sell, trade or give their excess capacity to the city, which could allocate that space for redevelopment or economic development.

Water use by the industrial companies is so great that even a small reduction by one of them could yield a significant increase in capacity for new companies, said Jan Marie Ennenga, chief executive of the Manufacturers Council of the Central Valley.

"This is far more than an ordinance, it's an economic stimulus package," she said. "If a major user were to conserve 1 percent of their discharge, it would be equivalent to a 145-room hotel, an 8,000-square-foot restaurant and 40 affordable housing units," she said.

The second business- related item on the council agenda allowed the Modesto Redevelopment Agency to start taking control of the former FMC factory at Graphics Drive near Kansas Avenue. That's a key step in a seven-year-old plan to build a business park on the 45-acre site.

FMC closed the factory in 1984. The Philadelphia-based company has undertaken several steps to remove contaminants from soil and a shallow aquifer at the site. It is considered safe enough to change hands, though the Redevelopment Agency has to buy a $50 million insurance policy costing $500,000 upfront to protect itself from potential environmental lawsuits linked to owning a brownfield.

The state must close its final environmental reviews of the cleanup before the sale can go through. FMC plans to sell the site to the agency for $750,000, with the RDA putting up $75,000 as a down payment.

After the sale closes, which likely will take place by September, the RDA intends to turn the property over to a Livermore firm that Modesto has selected to develop the business park. A price has not been set for that sale.

Bee staff writer Adam Ashton can be reached at aashton@modbee.com or 578-2366.

-----

To see more of The Modesto Bee, or to subscribe to the newspaper, go to http://www.modbee.com/.

Copyright (c) 2009, The Modesto Bee, Calif.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:DLM,

A service of YellowBrix, Inc.