4A Wichita Falls Economic Development Minutes - 11/17/2011MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
November 17, 2011
PRESENT:.
Gary Shores, President
Lanham Lyne
Gary McLendon
Glenn Barham, Mayor
Darron Leiker, City Manager
Kevin Hugman, Assistant City Manager
Jim Dockery, Asst. City Manager /CFO
Miles Risley, City Attorney
Linda Merrill, Recording Secretary
Kevin Pearson, Vice President
Harry Carner
Debra Carner
ABSENT:
Dick Bundy, Vice President /Sec.- Treasurer
Dave Lilley
1. CALL TO ORDER
§ Members
§ City Council
§ City Staff
§ Chamber of Commerce & Industry
§ S -5! Manufacturing
§ Members
President Gary Shores called the meeting to order at 4:00 p.m.
2. APPROVAL OF MINUTES
Lanham Lyne moved that the minutes of November 10, 2011 be approved.
Seconded by Gary McLendon, the motion unanimously carried.
3. S -5! MANUFACTURING — CNC MACHINING PROJECT
Kevin Pearson introduced Debra and Harry Carner of S -5! Manufacturing. Mr. Carner
explained that S -5! makes U- shaped clamp and screw attachment devices for standing seam
metal roofs so that the devices do not penetrate the roof. Threaded holes in the clamp allow
attachment of whatever equipment is desired on the roof.
Mr. Carner made the very first clamp his partner designed through a Louisiana company.
That company is now international. He left Louisiana to start a business in Megargel,
manufacturing the same products. The product line has grown to 50 attachment devices. The
company pursues an aggressive marketing plan and continues to meet its growth goals. His
partner became concerned that those two manufacturers would not be able to keep up with
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WFEDC — Minutes of November 17, 2011 2
demand. S -5! Manufacturing will supplement the work of those two companies, and eventually
produce all the products that S -5! purchases.
Mr. Lyne asked what keeps the competition down in this line of business. Mr. Carrier
said quality, competitive pricing, fast delivery, and good service sets these companies apart from
their competition.
Kevin Pearson led the conversation into why the Carners chose Iowa Park in which to
locate their business. Mr. Carner said there was not an existing building in either Iowa Park or
Wichita Falls that met their needs. Iowa Park offered significant incentives; it was close to the
airport and major highways. The Wichita Falls Business Park covenants do not permit
construction of a metal building. They want a metal building since they are producing attachment
devices designed for metal roofs.
Mr. Pearson asked the status of the incentives offered by Iowa Park. Mr. Carrier said the
economic development agreement has been approved by the Iowa Park 4A Board, but details are
being finalized. The City Council has agreed to the tax abatement agreement, as has the County —
but neither agreement has been executed. The land offered in the industrial park should be
annexed into the city limits sometime in January.
Mr. Pearson then asked about the use of the former Wal -Mart store in Iowa Parks as
S -5!'s temporary location. Mr. Carrier said Iowa Park offered to lease it to them at a fair price.
The City has abated the asbestos floor tile and is installing a large overhead door to allow
equipment to be moved in.
Mr. Pearson asked if he had found a CNC. Mr. Carner said he has found such a machine.
It is being held on his good name awaiting purchase.
Mr. Lyne asked how many employees he anticipates hiring. Mr. Carrier said initially 10
or 11, but 25 -30 within a couple of years. The average wage would be $12 to $14 per hour, with
CNC operators and programmers, as well as salaried employees obviously earning more than
that. He anticipates a net profit the first year. They will make an initial investment in equipment
of about $850,000.
Mr. McLendon asked about Iowa Park's cash for jobs incentive. Mr. Pearson said the
agreement specifies that for every quarter S -5! maintains 10 positions paying $25,000 a year
average salary, Iowa Park would forgive $10,000 (or $40,000 per year), making it a five -year
forgivable loan. They must start construction on the new facility no later than February 25, and
have it completed within 240 days.
Mr. Pearson tallied the incentives offered by Iowa Park for the project:
7.237 acres of land in the industrial park:
Asbestos removal /overhead door:
Title survey and environmental:
Utilities brought to site:
Cash for jobs:
Total
$36,000
$65,000
$5,000
$60,000
$200,000
$366,000
WFEDC — Minutes of November 17, 2011 3
Iowa Park City Manager Mike Price told him their 4A fund would have $350,000 within
60 days. They will probably go to the Texas Economic Development Bank to borrow money to
replenish their funds.
President Shores thanked the Carriers for attending today's meeting as they departed.
President Shores said he is not very comfortable with this project, and suggests the
WFEDC revisit this issue once Iowa Park and S -5! have solidified their agreements. Mr. Lyne
said he would be comfortable approving the expenditure based on the contingency that the
agreements are solidified. President Shores countered that it is not clear what Iowa Park would
ultimately offer if they were not sure of Wichita Falls' $100,000 expenditure.
Mr. Leiker said he feels S -5! would locate in Iowa Park without Wichita Falls' financial
assistance. Mr. Pearson said Mr. Carrier said the main reason they are coming to this area is
because of the incentives from both communities. The incentive is equal to $4,000 a job, $2,000
per job less than the 4A Board's standard incentive.
Mr. Leiker said these types of companies are ripe for someone to manufacture the
product a few cents cheaper and effectively run them out of business. Mr. Pearson said he has
verified the growth rates.
Mr. Dockery s opined that spending Wichita Falls money in Iowa Park is not a good idea.
Rather, the money should be spent to enrich Wichita Falls' tax base and to provide jobs for its
residents. Mr. Leiker agreed. He acknowledged it was the decision of the Board and City
Council, but it is his desire that Wichita Falls use its money only if it provides benefits within its
city limits.
Mr. Lyne looks at this region as a whole. Wichita Falls will benefit from sales taxes, and
other things that cannot be quantified. Wichita Falls citizens will no doubt be employed at the
plant, as well. Mr. McLendon agreed that this project should be viewed as helping the entire
region. However, when and if it becomes final, he wants Wichita Falls to be known as a big
player in its fruition. Mr. Lyne said it could write its own press release.
Mr. Lyne moved that this item be table until definitive word is received from Iowa
Park as to their participation in this endeavor and the extent of such participation.
Seconded by Mr. McLendon, the motion unanimously carried.
President Shores said it would be a good idea to discuss this in person with Iowa Park
officials. Mr. Pearson said he invited the City Manager (Mike Price) and Economic Development
Director (David Owens), but never received a reply. The meeting ended with the members
agreeing to attempt to meet with Iowa Park officials.
S. ADJOURN
The meeting adjourned at 4:58 p.m.
)Gary ores, President
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