Economic Development Commission

MINUTES ECONOMIC DEVELOPMENT COMMISSION August 16, 2012 VICE- PRESIDENT PUBLIC MEETING Mr. Higgins nominated Mrs. Jones for Vice 4:30 p.m. President. Mrs. Suko seconded. Nomination was Conference Room #1 accepted. Nomination passed unanimously; 5 yes, 120 East 8th Street 0 no. Anderson, IN 46016 SECRETARY / TREASURER MEMBERS PRESENT Dr. Markle nominated Mrs. Suko for Secretary / Bill Nagengast, President Treasurer. Mrs. Jones seconded. Nomination was Pam Jones, Vice President accepted. Nomination passed unanimously; 5 yes, 0 Gracie Suko, Secretary / Treasurer no. Larry Higgins, Member Dr. David Markle, Member MINUTES Mrs. Jones was the only one in attendance at the STAFF PRESENT December 12, 2011, meeting. The other members Ann Marie Bauer, Attorney have no personal knowledge of the happenings of Greg Winkler, Director for Corporate Sales and the meeting. Economic Development Ashley Hopper, Deputy Director After discussion, Mr. Childers advised the Karen Pettigrew, Specialist Commission to NOT take action on the minutes as April Phillips, Staff they cannot attest to the accuracy and substance. OTHERS PRESENT BUSINESS Mayor Kevin S. Smith Pete Heuer, Board of Public Works Chairman RESOLUTION #EDC01-12 A RESOLUTION OF Jason Childers, City Attorney THE ANDERSON ECONOMIC DEVELOPMENT Sam Pellegrino, Anderson City Controller COMMISSION AUTHORIZING THE ISSUANCE Frank Owens, Municipal Development Director OF THE CITY OF ANDERSON, INDIANA Floyd Edwards, Human Relations Director TAXABLE ECONOMIC DEVELOPMENT Gary McKinney, Economic Development REVENUE BONDS (GTI PROJECT) AND Russ Willis, City Councilman RELATED FINANCING DOCUMENTS FOR THE Rob Sparks, Corporation for Economic Development PURPOSE OF FINANCING CERTAIN Dustin Looper, Collier’s International ECONOMIC DEVELOPMENT FACILITIES Buzz Krohn, O.W. Krohn & Associates Mr. Winkler gave a brief presentation on the GTI Melanie Hayes, Herald Bulletin project. The company is a Tier 1 automotive parts manufacturer based in Ohio. They need to expand; however, they have outgrown their facility in Ohio ROLL CALL AND DECLARATION OF and the current labor force. They need to be QUORUM operational by the first quarter 2013, because they Mr. Childers called the meeting to order at 5:00 have orders to be delivered by June 2013. A p.m. and declared a quorum present. slideshow on the company and parent company was shown and discussed. This project will have a ELECTION OF OFFICERS capital investment of $21.5 million. The company is committed to hiring 250 employees in three years PRESIDENT with an annual payroll of $9 million. The company Mrs. Jones nominated Mr. Nagengast for President. is purchasing 25 acres of land south of the Dr. Markle seconded. Nomination was accepted. Nomination passed unanimously; 5 yes, 0 no. Accelerator II building in the Flagship Park to Mr. Winkler stated in looking at the risk of The construct a 150,000 sq ft. manufacturing facility. Farm project, the risk is considerably lower because The construction will be very quick with an expect of the credit worthiness of the company. If looking ed completion date of December 28, 2012. They at other projects where the City comes in from look to hire as quickly as possible with plans to hire behind the project after the construction has been 325 employees within five years. The City’s completed, there is a slightly higher risk. The risk investment is $3.25 million using the City’s existing is mitigated by the quality of the company, the TIF funds. The company must spend $3.25 million protections in the contract, and that the company is of their OWN money and are required to document required to spend $3.25 million of their own money and prove to the City Controller they have spent all before they get a penny of the City’s money. The of those funds. Once those funds have been spent, company was going to locate in Richmond, Indiana, the company will then be entitled to spend the but due to the incentive that was offered, Anderson City’s $3.25 million after inspections and approval won this project. There are always risks, but the by the Building Commissioner. The company has risks have been mitigated. given a corporate guaranty in the sum of $4 million to cover the $3.25 million plus other associated Mrs. Jones stated the funds are coming from the costs. There are also liquidated damages tied to Tax Increment Finance (TIF) district, which is a investment, real estate and equipment, jobs different stream of monies. created and payroll. The company must hit and maintain all three of these levels for ten years. Ms. Bauer stated this project is not a general They are required to pay their property taxes by obligation bond, it is a specific obligation limited to law. If their property taxes fall short of paying the the special taxing district. What is pledged to the bond, the corporate guarantee will pay the payment of the bond is the increase in property difference. taxes over what is currently generated. Mr. Nagengast asked if the corporate guarantee Mrs. Jones stated it is the increase in property taxes applied to the Ohio operation. What about Japan? that will pay for this bond. Mr. Winkler explained the corporate guarantee Mr. Winkler stated there are three levels of security would cover the Ohio operation, but not Japan. A for the future bond holder; the corporate road will be constructed for GTI that crosses the rail guarantee, the allocation area, and the consolidated spur and serve the next parcel of property also. TIF district. This should be a marketable issue. Mr. Nagengast asked if the company has begun Mrs. Jones moved to approve Resolution #EDC01- construction. 12. Mr. Higgins seconded. Motion passed unanimously; 5 yes, 0 no. Mr. Winkler answered yes, and equipment has been ordered. Mr. Childers presented a project report to be approved. It reiterates the language in the Mr. Nagengast asked if the 150,000 sq ft. building resolution. The bond finance law requires an will accommodate expansion. executed project report. Mr. Winkler stated the company believes they will Mrs. Suko moved to approve the project report. need to expand in the future. Mrs. Jones seconded. Motion passed unanimously; 5 yes, 0 no. Mrs. Suko asked how many employees would be hired to open the plant. MISCELLANEOUS Mr. Winkler stated 100 to open. They are required to deliver parts by July 2013. FINANCIAL REPORTS Ms. Pettigrew explained the staff will work with Dr. Markle asked how the risk on this project Mrs. Suko to get her authorized on the EDC compared to the risk on other projects. checking account at First Merchants Bank. A financial report will be given at the next meeting. Economic Development Commission (EDC): August 16, 2012 Page 2 ADJOURNMENT Meeting adjourned at 5:48 p.m. Submitted by: April K. Phillips Economic Development Commission (EDC): August 16, 2012 Page 3