A California-based company is on its way to becoming the first business to open at Phoenix’s Resource Innovation Campus. A city subcommittee voted Tuesday to recommend the full council approve the deal when it meets next week.

The idea first took root in Tunisia. That’s where an associate of Steve Olds saw farmers feeding palm fronds to animals. For three years, Olds said they focused on research and development. 

“Doing everything from shredded hay out of palm to bales to cubes and finally found out pellets works well,” he said. 

At Palm Silage's mill in Southern California, they shred fronds into a powder and add nutrients for a livestock feed that Olds said is cheaper and more nutritional. Now, his company wants to do the same in Phoenix where the city collects about 34,000 tons of fronds each year. 

“It’s a great central location, transportation wise,” Olds said. “We have shipping that will go to all parts of the state.” 

The deal calls for the city to pay Olds’ company no more than $12 a ton — that’s $5 cheaper than what the city says it costs to haul fronds to the landfill.

Project manager Gretchen Wolfe told members of the Transportation and Infrastructure Subcommittee that the city will see annual cost savings of about $170,000 a year. 

The company will also pay to rent space by the city’s transfer station. Wolfe said the revenue will be between $47,000 and $78,000 a year.

If approved by the City Council, Palm Silage will immediately begin its first phase which includes moving grinding equipment onto six acres. The second phase calls for Palm Silage to lease another 10 acres and build a mill to manufacture the feed. 

The initial contract is 10 years and Palm Silage expects to create 12 new jobs during that period.

City leaders are looking to fill the Resource Innovation Campus with businesses that will turn trash into new materials, create jobs and save the city money.