4A Wichita Falls Economic Development Minutes - 09/06/2017MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
September 6, 2017
PRESENT
Dick Bundy, President § WFEDC Members
Reno Gustafson, Vice President/Secretary-Treasurer §
Leo Lane §
Darron Leiker §
David Toogood §
Stephen Santellana, Mayor
Jim Dockery, Deputy City Manager/CFO
R. Kinley Hegglund, Jr., City Attorney
Linda Merrill, Scribe
Henry Florsheim, CEO
Kevin Pearson, V.P., Economic Development
Travis Haggard, V.P., BR&E
Adrene Wike, Research Associate
Brian Havins, Marketing
Holmes Davis
Jim Stariha, CFO
1. Call to Order
§ Mayor and City Council
§ City Staff
§ Chamber of Commerce and Industry
§ Binswanger
§ Clayton Homes
Dick Bundy called the meeting to order at 3:30 p.m.
2. Approval of Minutes (8/17/17 and 8/24/17)
Darron Leiker moved for approval of both sets of minutes. Seconded by Leo Lane, the
motion carried 5-0.
3. Discussion to allow the WFEDC President to enter into a Purchase Sale Agreement
with CMH Manufacturing, Inc., on the former ATCO building at 2400 Burkburnett Road
Jim Stariha, CFO of Clayton Homes, addressed the Board. He said Clayton Homes is not
yet a household name, but will soon start a marketing campaign on the SEC network. Clayton
Homes was started in 1956 by Jim Clayton. He began in the automobile industry, but switched to
the retail industry 10 years later. The company now has 339 home centers, 40 home building
facilities, 18 supply centers, and 5 site build locations. They are located in 32 states and have
16,000 employees.
Clayton's son, Kevin, has been the CEO since 1999. The company enjoys $4.2 billion in
revenues, with $769 million in pre-tax income. Their loan portfolio is $21.5 billion, and they
collect on 385,000 loans every month. It is the number one home builder in the U.S., and has
captured 49% of the market. Sales last year totaled $1.6 billion. They grow through acquisition.
The company was purchased by Berkshire Hathaway in 2003 for $1.8 billion.
They build factory built homes, site built homes, tiny homes, and dormitories. They
currently own 40 semi -trucks and 50 escort vehicles, and will grow this to a fleet of 400 over the
next three years.
The changes they would make to the ATCO building would come in phases. First, the
facility would be made operational and production friendly. Next, they would work on a nicer
breakroom and redo the offices, and figure out where to expand in the plant. The first step,
however, is to secure the facility. The building needs cleaned up, new doors, and a new roof at a
cost of $500,000. For a year, not much else would be happening. It would be about 9 months before
plant production. Before building, the plant has to be certified per HUD requirements, which is a
two to three-month process. It would be 24 months before there would be significant employment
growth. The company offers salaries starting at $15 and up, and comprehensive benefit packages
of health, vision, dental, disability, and 401K equal to about 40% of what is paid in wages.
Mr. Pearson said it is not a done deal; there is still the Purchase Sale Agreement and the
closing. That will take about two months. Mr. Stariha said they will do survey work and phase 1
environmental. They have all the approvals, assuming the agreement gets signed and the due
diligence checks about. They will be using cash flow from the business, rather than financing this
transaction. He thanked the Board for their Texas hospitality.
4. Executive Session
Mr. Bundy adjourned the meeting into executive session at 3:56 p.m. pursuant to Texas
Government Code section 551.087. He announced the meeting back into regular session at 4:55
p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further action
was taken on these items in executive session.
5. Purchase Sale Agreement with CMH Manufacturing, Inc., on the former ATCO
building located at 2400 Burkburnett Road
Leo Lane moved to allow the WFEDC President to negotiate and enter into a Purchase Sale
Agreement with CMH Manufacturing, Inc., on the former ATCO building at 2400 Burkbumett
Road. Seconded by Reno Gustafson, the motion carried 5-0.
6. Economic development incentives for CMH Manufacturing, Inc.
Mr. Leiker moved to approve the economic development incentive package for CMH
Manufacturing Inc. to include $905,000 as cash -for -jobs representing 181 positions $5,000 per
job) as well as $217,200 in skills training should the Texas Workforce Commission grant not
come through ($1,200 per job). Seconded by David Toogood, the motion carried 5-0.
2
8. Discussion and possible approval of funding regarding proposals from external
agencies:
(a) Sheppard Military Affairs Committee - Mr. Leiker moved to approve $140,000
as requested by SMAC. Seconded by Mr. Lane, the motion carried 5-0.
(b) Downtown Wichita Falls Development - Mr. Lane moved to approve the
$100,000 request for marketing. Seconded by Reno Gustafson, the motion carried 5-0.
(c) Idea WF — Mr. Lane moved to approve the expenditure of $30,000. Seconded by
Mr. Leiker, the motion carried 5-0.
(d) Wichita Falls Chamber of Commerce — Mr. Lane moved to approve the sum of
$985,907 for economic development and marketing. The motion was seconded by Mr. Gustafson.
Henry Florsheim noted for clarification that this sum was the past year's allocation. Mr. Bundy
agreed. The motion carried 5-0.
(e) Small Business Development Center — This item failed for lack of a motion.
9. Election of Officers (President, Vice President, Secretary -Treasurer)
Mr. Leiker moved to appoint Dick Bundy as president; Leo Lane as vice-president; and
Reno Gustafson as secretary -treasurer. Seconded by Mr. Toogood, the motion carried.
10. Adjourn
The meeting adjourned at 5:00 p.m.
ck Bundy, President