Local Option Review Team

LOCAL OPTION REVIEW TEAM Thursday, December 17, 2020 - 12:00 p.m. 400 East Military, Fremont, Nebraska (attendance is limited) and Zoom Topic: Local Option Review Team Meeting Time: Dec 17, 2020 12:00 PM Central Time (US and Canada) Join Zoom Meeting https://zoom.us/j/99186208778?pwd=S1NyZWF6d3I4MFBleVdrR0ZvOU1YQT09 Meeting ID: 991 8620 8778 Passcode: 060145 One tap mobile +13462487799,,99186208778# US (Houston) +16699009128,,99186208778# US (San Jose) Dial by your location +1 346 248 7799 US (Houston) +1 669 900 9128 US (San Jose) +1 253 215 8782 US (Tacoma) +1 312 626 6799 US (Chicago) +1 646 558 8656 US (New York) +1 301 715 8592 US (Washington D.C) Meeting ID: 991 8620 8778 Find your local number: https://zoom.us/u/ac8BZPfhA Telephone Audio Information Call: +1 301 715 8592 US Enter Meeting ID: Meeting ID: 991 8620 8778, Passcode: 060145 You will be connected to the meeting. If making a comment during a public hearing or comment period please press *9 to electronically raise your hand allowing the Chairman to call on you. Once called upon to speak please press * 6 to unmute your phone; press * 6 again to mute when finished speaking Page 1 of 13  LOCAL OPTION REVIEW TEAM Thursday, December 17, 2020 - 12:00 p.m. 400 East Military, Fremont, Nebraska (attendance is limited) and Zoom 1. Call to Order 2. Approval of minutes from October 29, 2020 meeting. 3. Review Fund Balance. 4. Consider Application from Fabrication Holdings, LLC DBA Elemetal Fabrication and Machine for a Local Option Economic Development Fund loan. 5. Adjourn. This agenda was posted at the Municipal Building and was distributed to the members of the Local Option Review Team on December 9, 2020. The official current copy is available at City Hall, 400 East Military Avenue. A copy of the Open Meeting Law is posted for review by the public. Page 2 of 13  CITY OF FREMONT LOCAL OPTION REVIEW TEAM OCTOBER 29, 2020 – 12:00 p.m. A meeting of the Local Option Review Team was held on October 29, 2020 at 12:00 p.m. at 400 East Military Avenue, Fremont, Nebraska. The meeting was preceded by publicized notice in the Fremont Tribune and the agenda displayed in the Municipal Building. The meeting was open to the public. A continually current copy of the agenda was available for public inspection at the office of the City Administrator, 400 East Military Avenue. The agenda was distributed to the Local Option Review Team on October 22, 2020 and posted, along with the supporting documents on the City’s website. A copy of the open meeting law is posted continually for public inspection. ROLL CALL Roll call showed Members McClain, George, Jacobus, and Meister present. Oliva present for items 3-5. Benson and Horeis absent. 5 present, 2 absent. Others in attendance included Lottie Mitchell, City of Fremont; Brian Newton, City Administrator; Jody Sanders, Dir. Of Finance; Garry Clark, Greater Fremont Development Council; and Randy Fujan, Tech Partners, LLC. APPROVAL OF MINUTES FROM MAY 13, 2020 MEETING. Moved by Member Jacobus and seconded by Member McClain to approve the minutes of the May 13, 2020 meeting. Ayes: George, Jacobus, McClain and Meister. Motion carried 4-0. REVIEW FUND BALANCE. Mitchell gave overview. No motion received. CONSIDER APPLICATION FROM TECH PARTNERS, LLC FOR A LOCAL OPTION ECONOMIC DEVELOPMENT FUND LOAN. Mitchell gave overview. Randy Fujan gave overview and answered questions. Moved by Member Meister and seconded by Member Oliva to approve Local Option Economic Development Fund Application from Tech Partners, LLC. Ayes: George, McClain, Jacobus, Oliva, and Meister. Motion carried 5-0. ADJOURNMENT Moved by Member Oliva and seconded by Member Meister to adjourn at 12:35 p.m. Ayes: George, McClain, Jacobus, Oliva, and Meister. Motion carried 5-0. 1 Page 3 of 13 City of Fremont Nebraska Status of LB 840 Funds 11/30/2020 Premilinary Estimate Assets: Checking 304,618.76 Money Market 1,788,857.16 Investments 3,000,000.00 5,093,475.92 Oct/Nov Capital Transfers 0.00 5,093,475.92 Known Committed Funds: Tech/Bus Park Res 2011-047 420,000.00 Tech/Bus Park Res 2013-095 1,055,291.10 Morningside Business Park Res 2013-095 172,675.14 Morningside Business Park - Johnson Rd South Res 2019-186 0.00 505 Brewing Co Res 2019-240 0.00 Summit Medical Staffing Res 2020-111 100,000.00 WLG Fremont Res 2019-038 0.00 Wholestone Farms Res 2020-052 1,300,000.00 Tech Partners LLC Res 2020-225 32,250.00 Tech/Bus Park Resolution 2011-047 975,392.00 4,055,608.24 Uncommitted Funds 1,037,867.68 Page 4 of 13  STAFF REPORT TO: Local Option Review Team FROM: Lottie Mitchell, Grant Coordinator DATE: December 15, 2020 SUBJECT: Local Option Economic Development Fund Application for Fabrication Holdings, LLC DBA Elemetal Fabrication and Machine Recommendation: Consider application from Fabrication Holdings, LLC DBA Elemetal Fabrication and Machine for a Local Option Economic Development Fund loan. Background: The City of Fremont has a Local Option Economic Development (LB840) Plan (the Plan) and loan fund for the purposes of creating new jobs, expanding the labor market, retaining existing jobs, attracting new capital investment, broadening the tax base, and providing economic diversification to ensure economic stability and vitality for the City of Fremont and surrounding areas. Applications are submitted to the plan administrator (City of Fremont) for review. Once the plan administrator has reviewed and determined the application is eligible for LB840 funds, the application is reviewed by the Citizens Advisory Review Committee (CARC) and the Local Option Review Team (LORT). The CARC reviews the application from the standpoint of compliance with the Plan. The LORT reviews the application from the standpoint of project feasibility and the potential future economic benefit to the community of Fremont. Both committees make recommendations to the City Council. The City Council will then consider the overall benefits to the community and will have final authority on approval of the application. Fabrication Holdings, LLC DBA Elemetal Fabrication and Machine (Elemetal) is a custom metal fabrication and machine shop specializing in custom stainless-steel fabrication, replacement parts, and repair services for food plants. They are moving from their current location at 1400 Railroad Street, Fremont, NE, where the company was originally established in 1964 as Pete’s Custom Metal, to 2263 Business Park Drive, Fremont, NE. The sale of the new facility is scheduled to close on December 28, 2020. The relocation will allow Elemetal to expand and grow in all aspects of their offerings including the amount of city taxable sales. Elemetal averages $350,000 in city taxable sales annually. They anticipate this amount to grow as the new facility will allow for better advertisement and efficiency to conduct a greater amount of local sales. Their current location on Railroad Street is in the City limits. Their new location on Business Park Drive is not in the City limits. Elemetal has agreed to voluntarily annex into the City limits and has already started the process by requesting to be removed from the county’s industrial area. The Dodge County Board of Supervisors will hold a public hearing on the matter on December 30, 2020. As part of their relocation and expansion, Elemetal has committed to adding four new full-time, benefitted positions. The positions include: one CAD/Drafting Tech position, one outside sales position, and two machinist/fabricator positions. The wages are dependent upon experience but will range from $45,000 to $60,000 annually. Two of these positions started the first week of December and will be counted towards the four new positions. Page 5 of 13 The estimated cost for this project is $2,769,000. Elemetal is requesting $200,000 from the Local Option Economic Development (LB840) fund. Elemetal is an eligible business under Fremont’s Local Option Economic Development Plan as their principal source of income is derived from the manufacture of articles of commerce. Staff recommends an award of $200,000 with 100% forgiveness based on performance measures of retention and creation of jobs and voluntary annexation. • Retain 16 full-time jobs. • Create four new full-time jobs (two of which were created and filled the first week of December) and retain for a period of five years from the date of creation. • Voluntary annexation into the City limits of Fremont. Fiscal Impact: Local Option Economic Development Fund - $200,000. Page 6 of 13 Page 7 of 13 Local Option Economic Development Loan Fund and Economic Enhancement Fund Application (Application is an Official Public Document) Part I A. Business Borrower Information Fabrication Holdings LLC Name of Business to receive assistance: DBA Elemetal Fabrication & Machine Address: 1400 Railroad St, Fremont, NE 68025 ________________________ (City, State & ZIP) Representative Contact Information Name: Andrew Stamp Email: Andrew@elemetalfab.com Title: Managing Partner Phone: 402-677-9286 Business Clarification (mark one) ☐ x Manufacturing ☐ Research & Development ☐ Warehousing & Distribution ☐ Administrative Management ☐ Service Headquarters Federal Tax ID # 833401223 Business Organization (mark one) ☐ Proprietorship ☐ x Partnership ☐ Corporation ☐ Other Does the Company have a Parent or Subsidiaries? ☐ Yes ☐ x No If yes, identify name: Address: ________________________ (City, State & ZIP) Business Type ☐ Start-up (0-5 years old) ☐ Buyout ☐ x Existing If existing, how many years in Business? Current ownership structure as Fabricaton Holdings LLC DBA Elemetal Fabrication and machine was put in place in March of 2019, Business was established in 1964 as Pete's Custom Metal Page 8 of 13 Ownership Identification: List all officers, directors, partners, owners, co-owners and all stakeholders with 20% or more of the stock. Name Title Ownership % Andrew R. Stamp Managing Partner 25% Brandon Carnes V.P. of Sales 5% John Swearingen Partner 20% Joe Loftus Partner 20% Richard Loftus Partner 20% Scott Benbrook Partner 5% Employment Information Personnel (Full-Time Equivalent, FTE is based upon 2,080 hours per year) Existing number of FTE Positions: 16 12 FTE Positions to be created within _____months of Application Approval: 4 If jobs would be lost without loan approval, total number of FTE jobs retained: What is the average wage for employees? $26.00/hr Please describe all benefits which the business provides to employees: We offer low deductible health insurance, vision and dental. $50k in life insurance standard, additional available. 401K, paid vacation, short term disability insurance are also offered. B. Project Information Use of Funds Total Project Cost Loan Funds Requested Total Funds Land Acquisition $1,850,000 Land / Bldg $0 $1,850,000 Building Acquisition Renovation $369,000.00 $200,000 $569,000 New Facility Construction Acquisition of Machinery/Equipment $250,000 $0 $250,000 Acquisition of Furniture/Fixtures Working Capital (Includes Inventory) Other (Specify) $100,000 $0 $100,000 (Misc. Moving Expenses and Contingency) Total $2,569,000 $200,000 $2,769,000 Project Schedule: We are scheduled to close on the building on December 28th, 2020 and are aiming to have renovations complete and be moved in by February 28th, 2021. Page 9 of 13  C. Sources of Funds Note: Public sources of financing requires the participation of a Bank and/or an injection of equity (non-debt funds). Participating Lender Information: SEE ATTACHED SHEET FOR LOAN INFORMATION Name of Lending Institution: Contact Person: Address: ______ Phone: (City, State & ZIP) Loan Amount: $ Loan Term (Yrs): Interest Rate: Variable: Fixed: Collateral Required: Equity Required: Equity Information: Amount Available from business or owners for investment: $ Source of owner’s equity into project into the project: Project Location: ☐ Within the City Limits (Fremont) ☐ Outside of City Limits but within the Zoning Jurisdiction of (Fremont) x ☐ Unincorporated Area (Dodge County) D. Attach the Following (Items 8-13 shall be considered confidential) Brief Desription of the Business’ history: The business was started by Pete Dahlhauser in 1964 as Pete's Custom Metal. In 2011 the business was pur- chased by Pete's grandson-in-law, Steve Loftus through his company in Dallas. In 2019, current manager Andrew Stamp along with Steve Loftus's sons Joe and Richard Loftus purchased the business forming the current owner- ship group. The business started as a custom heavy sheet metal fabrication shop. In 2015, Andrew Stamp began steering the business towards the food manufacturing industry. Our diverse list of some of the largest food manufac- turers in the world including Tyson, Cargill, Kellogg, JBS / Plumrose USA and others gives us a very stable work flow both throughout the calendar year as well as in varying economic conditions. We specialize in custom stainless steel fabrication, replacement parts and repair services for food plants. Brief Description of the proposed project. Has any part of this project been started? We have outgrown our current 15,000 SF location at 1400 Railroad street, have grown the business by 250% since 2015. We are purchasing Platte Valley Equipment's current facility at 2263 Business Park Drive. This new fa- cility will give us more than 2.5 times the amount of space our current facility has, with plenty of ground for future growth needs. The building will be outfitted with 3 main areas, the fabrication shop, the machine shop and the of- fice. Both the fab shop and machine shop areas will be outfitted with overhead cranes for improved ergonomics and safety. The building will be outfitted with new electrical service, ventilation, and new HVAC in the machine shop. We will also be purchasing at least $250k worth of new equipment including a new saw and new overhead cranes. We have ordered some of the equipment and done some of the outdoor work related to the new electrical service. Page 10 of 13 Page 11 of 13 Sources of Funding: Great Western Bank Contact: Troy L. Strom Vice President Commercial Banking 9290 West Dodge Rd., Ste 401 Omaha, NE 68114 402.552.1219 (o) / 402.841.1106 (c) troy.strom@greatwesternbank.com Building Purchase and Tenant Improvements Loans Using Great Western Bank and NEDCO 504 Loan Program Total Loan Amount: $1,908,000 (90% of appraised value after tenant improvements are complete) $848,000 – NEDCO 504 Loan, 25 Year Fixed Rate @ 2.409%, 25 Year Amortization $1,060,000 – Great Western Bank, 5 Year Fixed at 3.75%, 20 Year Amortization Equipment Purchase Line of Credit, to be termed after purchases are complete. Maximum loan amount: $400,000.00 Currently Allocated Spending: $250,000 7 Year Amortization, Variable Rate, 3.25% current Collateral Required: Building, Land and Equipment Liens Equity Required: 10% of Building Purchase Loan = $212,000 Misc Moving Expenses & Contigencies = $100,000 Source of Business Equity: Cash on Hand Page 12 of 13 Page 13 of 13