4A Wichita Falls Economic Development Minutes - 11/10/2000RECEIVED IN
CITY CLERK'S OFFICE
Date �0 -6 /
MINUTESOF THE By TimeG
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
Meeting of November 10, 2000
Present:
Members: Gary Shores, President
Ron Bullock, Secretary- Treasurer
Bo Stahler
Lou Rodriguez
Ray Clymer
City Staff: Jim Berzina, City Manager
Robert Powers, Assistant City Manager
Greg Humbach, City Attorney
Linda Merrill, Recording Secretary
Guests: Ron Mertens, Board of Commerce and Industry
Tim Chase, Board of Commerce and Industry
Susan Couch, Vernon Regional Junior College
Cryovac
Raymond Youngblood, Vice President of Manufacturing
Members of the Media
Reginald Blow, North Texas Journal
Times Record News — Monica Wolfson
KAUZ -TV — Hoyt Hill
KFDX -TV — Lisa Weber
I. Call to Order.
President Gary Shores called the meeting to order at 8:20 a.m.
II. Approval of Minutes (October 27, 2000).
Bo Stahler moved that the October 27, 2000 minutes be approved as written. The motion
was seconded by Lou Rodriguez, and unanimously approved.
Wichiia Falls Economic Development Corporation November 10, 2000 Meeting Minutes Page 2 of 4
III. Consider Memorandum of Understanding between Cryovac, Inc. and
the Wichita Falls Economic Development Corporation.
(Before the 4A Board is a proposed Memorandum of Understanding, authorizing
$276, 000 of 4A sales tax revenues be paid to Cryovac. This payment would be contingent upon
Cryovac's creation of 69 new jobs and a minimum investment of $15, 000, 000 no later than
December 31, 2001. In addition, in the event Phases Two, Three, and Four of Cryovac's
proposed expansion are implemented and completed prior to December 31, 2002, Cryovac will
make additional investments of $6, 000, 000 and create an additional 32 jobs during each phase.
The completion of each subsequent Phase will result in a payment of $128, 000 by the WFEDC
for each phase completed, depending upon employment and investment levels. Also, if requested
by the City, the WFEDC will recommend that the City's portion of any sales tax refund due
Cryovac resulting from an `Enterprise Project" designation be paid by Cryovac using 4(a) sales
tax proceeds, estimated at $65, 000.)
President Gary Shores noted that the primary purpose of today's meeting is to discuss the
above - referenced proposal. He gave the floor to Ray Youngblood of Cryovac, Inc.
Mr. Youngblood gave a presentation concerning Cryovac's plans. Sealed Air Cryovac
purchased the I -44 location in 1995, and now plan to start operations there. The new project
being developed is for the packaging industry, particularly in case -ready area. Mr. Youngblood
remarked that this product is found primarily in the meat area, as more and more meat products
are packaged in clear sealed plastic covers. Cryovac intends to be a leader in this type of
packaging.
He further remarked that Cryovac's initial investment would be $18 million. He
anticipates the company will hire approximately 70 employees with this initial investment.
Mr. Youngblood added that Cryovac has been a leading member of this community for over 25
years, and has a history of being very competitive in compensation packages. This new operation
has potential for expansion, and expansion always is somewhat dependent upon the economic
climate at the time. Generally, Cryovac remains strong even in weaker economic climates. The
Iowa Park plant's expansions came in on a smaller scale, yet it went through 15 years of
continuous growth.
President Shores stated this is a wonderful opportunity for both Cryovac and the City of
Wichita Falls, and the Board is pleased to consider this request. He gave the floor to his fellow
Board members.
Bo Stahler questioned what percentage of the building would be used for the first phase.
Mr. Youngblood replied that when the facility is in full operation, and without expanding the
facility, it would be about 2.5 times the start-up level.
Wichita Falls Economic Development Corporation November 10, 2000 Meeting Minutes Page 3 of 4
Ron Bullock queried whether this plant would have any impact on the Iowa Park
operation. Mr. Youngblood replied affirmatively, but only in a positive sense. Cryovac intends to
take advantage of the synergy of the operations. They will utilize support from the Iowa Park
facility for this new facility. The plants will be closely linked.
(Ray Clymer and Jim Berzina joined the meeting)
Lou Rodriguez asked Mr. Youngblood if Cryovac was comfortable with the skilled labor
pool here. He replied yes, particularly because of the moves that have been made over the past
decade to build up technology training.
Mr. Bullock added that this is project is significant in that it meets both of the primary
charges of this board — to attract new industry, and retain and expand existing industry, and he
was ecstatic about the prospects.
Mr. Stahler asked the size of the labor force at Cryovac, and Mr. Youngblood replied
approximately 725.
Ron Mertens added that this project will have a strong economic impact upon the area of
roughly $3.5 million, direct and indirect; employment in the first quarter of around 100
employees; and $475,000 increased retail sales on an annual basis.
Ray Clymer moved to approve the Memorandum of Understanding (attached), was
seconded by Bo Stahler, and all approved.
Mr. Bullock asked Mr. Youngblood what guided his company to Wichita Falls. He
replied that a number of things come into consideration, one of which is what will be required in
the future — what are the customer expectations. Speed -to- market becomes increasingly important
as time goes on. The geographic location was also an important factor. It was also important that
the City has played a good role in providing strong local support for over 25 years.
Another important aspect in the process is to consider the workforce. The general attitude
toward producing products plays a big role, and Cryovac has always enjoyed a strong labor force
in that area. Also, this labor force has always been a learning group. Cryovac has a high
percentage of employees enrolled in schooling of some sort. It makes it easier for a company to
deal with continuos change if they have a continuously learning workforce.
Mr. Stahler asked how many shifts are planned, and Mr. Youngblood replied they intend
to be in operation continually.
Jim Berzina commended the work of Ron Mertens, Tim Chase and Susan Couch to bring
this project to fruition. He also applauded the work of the Board. President Shores thanked him
for this acknowledgment.
f
'• Wichita Falls Economic Development Corporation November 10, 2000 Meeting Minutes Page 4 of 4
Mr. Mertens introduced Susan Couch of VRJC's Skills Training Center. Mr. Mertens
stated that they are planning an expansion of the Skills Training Center in Machine Technology.
This expansion will probably be a project placed before the Board at some future date.
Ms. Cough stated VRJC was in the process of establishing a machine program at the
Skills Training Center. A lack of such a program has been one of their weaknesses. They have
not had a full -time instructor. There is a growing demand for this customized training in
machining. VRJC representatives have met with several groups, including Stanley Tool, Wichita
Falls Refurbishing, and Wichita Clutch, and all of those groups expressed the need for such a
program. They all suggest purchasing American -made Bridgeport machines made in the 1970's-
`80's, rather than newer foreign -made machines. They pledged to work to find equipment to
donate for this program.
Mr. Stahler asked if there is still grant money available for such a project. Mr. Mertens
stated that everyone is aware of difficulties with the Department of Economic Development, as
the Smart Jobs program has been on hold for the past six months. However, they have continued
to have success — no project in the past 12 years has been turned down. The relationship
Ms. Couch has with Austin is very important. Mr. Mertens continued by stating the Smart Jobs
money will probably free up by the end of the year. This would be a very good project for Smart
Jobs, but if not, the Skills Development program will be available.
Robert Powers stated this Memorandum of Understanding will be placed on the City
Council's November 21 agenda for ratification. He added that he has a copy of the State's annual
economic development report of the impact of the 4(a) and 4(b) boards for each Board member.
President Shores stated he looks forward to working with Cryovac in this project, and
anticipates a positive result from the Council's actions on November 21.
There being no further business, the meeting adjourned at 8:41 a.m.
inda Merrill, Recording Secretary
Ron Bullock, Secretary- Treasurer
Memorandum of Understanding
November 10, 2000
This is a Memorandum of Understanding (MOU) between Cryovac, Inc. (Cryovac) and the Wichita
Falls Economic Development Corporation ( WFEDC). The purpose of the MOU is to provide detailed
descriptions of each party's intentions as they work to locate a new manufacturing plant. For the
purpose of this MOU, a new job is defined as one that has been in place for a minimum of 6 months
and resulted from the location of a new manufacturing plant at Cryovac's I -44 location in Wichita
Falls, Texas.
I. The use of Section 4(a) Sales Tax proceeds will be contingent on Cryovac completing the
following:
A. During Phase One, which will take place at the I -44 location in Wichita Falls, Texas and is
scheduled to be completed no later than December 31, 2001, Cryovac will;
a) Create 69 new jobs that each pay at least $11.50 per hour before benefits are included.
These jobs are to be in addition to the average base employment of 720 at their Iowa
Park, Texas facility.
b) Invest a total of at least $15,000,000.00 in making building improvements at the I -44
location and in the purchase of equipment.
B. In the event Phases Two, Three, and Four are implemented at the I -44 location and are
completed prior to December 31, 2002, Cryovac will:
a) Create an additional 32 new jobs during each phase that pay at least $11.50 per hour
before benefits are included.
b) Make additional investments of $6,000,000.00 in equipment for each Phase.
II. The WFEDC will recommend to the Wichita Falls City Council that they approve the use of
Section 4(a) Sales Tax proceeds as described below.
A. As a result of a presentation being made by Cryovac to the WFEDC evidencing the creation of
new jobs and capital investment for Phase One as defined above, a payment of $276,000 will
be made to Cryovac.
B. Subsequent presentations can be made by Cryovac to the WFEDC evidencing the creation of
new jobs and capital investment for Phases Two, Three, and Four as defined above. The
completion of each of these subsequent Phases will result in a payment of $128,000.00 to
Cryovac for each phase completed. If employment and investment levels are less than
projected for Phases Two, Three, and/or Four the WFEDC will renegotiate the payment
amount to reflect the actual employment and/or investment.
III. In addition, if requested by the City, the WFEDC will recommend that the City's portion of
any Sales Tax Refund due Cryovac resulting from an "Enterprise Project" designation by
the Texas Department of Economic Development be paid to Cryovac using 4(a) Sales Tax
proceeds. The City's portion of the Sales and Use tax refund is estimated to be $65,000.
Wichita Falls Economic
Development Corporation
By: ---r
Gary Shores
Chairman
Cryovac, Inc.
By: f�• —.-�iL
Ra and Youn food
Vice President of Manufacturing