10-17-2016 EDAM Special MeetingEDA Board Special Meeting
Main Conference Room — City Center
11:30 AM Monday, October 17th, 2016
Members present in bold.
MEETING MINUTES
Members
Mike Cannon Corey Stearns Daron Vanderheiden
Mary Christensen Mike McGraw Jonny Block
Staff
Miles Seppelt, EDA Director
Matt Jaunich, City Administrator
Jeffrey Page, Program Assistant
Andy Reid, Finance Director
Call to Order — The meeting was called to order at 11:36 AM.
II. Approve Agenda — no action
III. Update on Company "X"
Chad Czmowski
Staff provided a comprehensive update on discussions with the prospect company:
■ Existing operation would transfer to new facility in year one.
■ Existing operation expects both strong organic growth supplemented by acquisition growth to expand headcount.
■ Stamping and molding tooling operation would be created.
■ Additional operation of parent company would expand into remaining space
■ Existing Operations Additions
0 2/3's of the jobs would average $15/hour
0 1/3 of the jobs would be techs in the $25/hour range
■ Tooling Operations would average $30/hour
■ New Operation — most likely machinists or technicians in the $25/hour range
■ Job retention/creation:
0 150 existing companyjobs would be retained (relocated to Hutchinson)
0 New job creation would be significant:
- 2 years 67 new jobs
- 5 years 150 new jobs
- 7 years 275+ new jobs
■ Total employment on the site could top 425 people by the end of 2023.
IV. Consider Economic Development Assistance Package
Extensive discussion of providing economic development assistance to the company to facilitate their move to
Hutchinson.
Potential gains for Hutchinson include:
1. Job retention
2. Job creation
3. Strong upside potential (other divisions)
4. Diversify local economy
5. Insurance policy against possible future company closures
Proposed sources of funding to establish a local "Job Creation Fund" program would be:
Downtown RLF $250,000
City of Hutchinson $100,000
Land Sales $50,000
MIF recycle $100,000
TOTAL $500,000
Further discussion.
M/S/P: Block, Cannon to recommend $1.5 million of economic development assistance comprised of:
a) $500,000 as a forgivable loan; and,
b) up to $500,000 state/local Job Creation Fund grant, based on actual annual job creation by the company, on the
formula of:
$1,000 per job paying at least $26,774 annually ($12.86/hr)
$2,000 per job paying at least $36,041 annually ($17.33 /hr)
$3,000 per job paying at least $46,339 annually ($22.28 /hr)
and payable annually over a period of up to seven years and;
c) $500,000 from the State's Minnesota Investment Fund, in the form of a partially -forgivable loan (as determined
by DEED);
all of which is contingent upon:
1. Receipt of a "No Objection" letter from the company's current community,
2. DEED approval of the Minnesota Investment Fund application,
3. DEED approval of the Job Creation Fund application,
4. Final approval by the Hutchinson City Council,
5. Required job creation by the company.
Passed unanimously.
Next steps:
1. Final approval by the prospect company
2. Obtain "no objection" letter from company's current community
3. Business Subsidy public hearing
4. City Council approval
5. Application to DEED's Job Creation Fund and Minnesota Investment Fund.
V. Other Business — none
VI. Adjourn
M/S/P: Cannon, Stearns to adjourn the meeting at 1:12 PM. Passed unanimously.
Respectfully Submitted,
Miles R. Seppelt
Economic Development Director