tax abatement report

Transcription

CITY COMMISSION AGENDA MEMO
November 6, 2007
FROM:
Nick Arena, Management Intern
MEETING:
November 13, 2007
SUBJECT:
Annual Economic Development Report
PRESENTER:
Nick Arena, Management Intern
BACKGROUND
Annually, the City of Manhattan completes an accountability review of all recipients of
Manhattan Economic Development Opportunity Funds in order to ensure the companies’
compliance with their agreements and to collect job creation information. In addition,
City Administration provides an annual report on tax abatement recipients. The report
focuses on the calendar year 2006, with an update on certain activities for 2007.
The accountability process is a time consuming one, involving the collection of a large
amount of data for each specific company as well as aggregating that information into
key statistics that measure the success of the City’s efforts. The accountability process
generally includes site visits to each fund recipient. The specific purpose of the
accountability reviews is to ensure that the companies are in compliance with agreements
with the City.
DISCUSSION
Attached is the annual report for the year 2006. Also provided is an update of information
for 2007 as of June 1. The report has been organized to provide statistical information
for companies that are still being tracked for accountability purposes (“active
companies”) and a section of final reports for companies who have either met all of their
obligations or who are no longer operating.
Key statistical highlights for this year’s report are as follows:
•
•
•
•
1,156 jobs have been created by the five active companies as of
December 31, 2006;
Funding for 23 companies or active projects has been committed, 15
of which were local start-ups or expansions, for a total of
approximately $23 million in funding;
Funded companies and those receiving full or partial tax abatements
generated more than $740,000 in new local (City, County and School
District) property tax in 2006; and
Every $1 the City spent on economic development has generated
approximately $3.41 in private sector and other direct investment to
date.
City Administration will be on hand to discuss any questions that the Commission may
have about the accountability process or the statistics.
RECOMMENDATION
City Administration recommends that the City Commission receive the report.
POSSIBLE MOTION
As this is a Work Session, no motion is necessary.
NA
07178
Enclosure:
1. Annual Economic Development Report
Manhattan
Economic Development
Annual Report
Manhattan Economic Development
Opportunity Fund and
Annual Tax Abatement Report for Year Ending
2006
Annual Report and Update
2006
3 introduction
contents
5 summary letter from the city manager
6 fund forward
7 history and statement of goals
9 locations of funded companies
11 funding by company
13 job creation by company
15 economic impact
19 public and private investments leveraged
17 property tax generated
19 individual active companies & accountability reviews
21Auth-Florence (florence corporation of kansas)
27 Collegiate Marketing Services
29 Covan Worldwide Moving, inc.
31 Farrar Corporation
37 Flint Hills Beverage, llc
41 gtm sportswear
47 Manhattan Holdings, llc
53 Mercy Health Foundation
67 national institute for strategic technology acquisition and
commercialization (mid-america commercialization corporation and
kansas entrepreneurial center)
71 tax abatement report
72 city of manhattan tax abatements
77 overview of outstanding tax abatements
81 job creation statistics for outstanding tax abatements
82 property taxes paid by companies receiving tax abatements
83 final reports for inactive companies
99 fund financial report
2007 City Commission:
Mayor Tom Phillips
Mayor, Pro Tem Mark Hatesohl
Bob Strawn
Bruce Snead
James Sherow
2006
City Commission:
Mayor Bruce Snead
Tom Phillips
Mark Hatesohl
Jayme Morris-Hardeman
Ed Klimek
2006
summary letter from the city manager
fund forward
history and statement of goals
locations of funded companies
funding by company
City Staff:
Ron R. Fehr, City Manager
Diane Stoddard, Deputy City Manager
Jason Hilgers, Assistant City Manager
Gary Fees, Communications Manager/City Clerk
Bernie Hayen, Director of Finance
introduction 3
2006
Dear Honorable Members of the Manhattan City
Commission and Citizens of Manhattan,
It is my pleasure to present the 2006 Annual Report and 2006 Update for
the Manhattan Economic Development Opportunity Fund and Annual
Tax Abatement Report.
I would like to offer the following highlights of this report:
•
•
•
•
•
1156 additional jobs from the six active companies have been created
as of December 31, 2006.
Funding for 23 companies or projects has been committed, 13 of
which were local start-ups or expansions, for a total of approximately
$23 million;
Funded companies generated $607,435 in local (City, County, and
School District) property tax in 2006;
For every $1 the City spent on economic development, approximately
$3.41 in private sector and other direct investment has been made;
and
The four companies receiving tax abatements or partial abatements
paid $129,410 in taxes in 2006.
I believe that these highlights and the contents of the report as a whole
demonstrate compliance by the recipient companies as well as the overall
success that the City’s economic development efforts have contributed to
the local economy.
Sincerely,
Ron R. Fehr, City Manager
summary letter from
the city manager 5
2006
O
n November 8, 1994, the voters of the City of Manhattan approved an
additional one-half cent sales tax on retail sales within the City for a four (4)
year period commencing January 1, 1995. This tax revenue was pledged for
economic development initiatives benefiting the City.
Ultimately, the special sales tax generated revenues exceeding $12 million
prior to its sunset at the end of 1998. The City Commission created the
Manhattan Economic Development Opportunity Fund. An Advisory Board
was also created to recommend actions to the City Commission regarding
the funding of applications, policies and procedures, and accountability.
The Board and Commission developed the following primary focus areas:
Retention and Expansion of Existing Enterprises; Research and Kansas
State University; the Mid-America Commercialization Corporation; Venture
Capital; Recruitment and Relocation; and Retirement.
In February of 2002, the Manhattan Economic Development Opportunity
Fund Advisory Board was officially dissolved by the City Commission. City
Administration is continuing the annual accountability process to ensure
compliance with agreements and seek progress updates from funded
companies. This is the primary focus of the Manhattan Economic
Development Opportunity Fund annual review and update.
As of December 2006, the Manhattan Economic Development Opportunity
Fund committed $23,387,561 in Grants and Loans to twenty-three different
companies or projects, all but eight of which were to local companies or
projects seeking to expand or diversify their existing operations.
fund forward 6
2006
O
ver the years, the City has convened various task forces to examine goals
for economic development. Based on that input, the City Commission
established the following goals for the Manhattan Economic Development
Opportunity Fund:
•
•
•
•
•
To diversify the property tax base in Manhattan
To decrease reliance on federal, state, and local governments for jobs
To maintain, stabilize, and build on the existing strengths of the
community
To use public funds in ways that create self-sustaining economic
development activities
To generate quality jobs creating competitive wages, benefits, and
working conditions by promoting the use of loans as opposed to grants
in most situations
In 2002, the City Commission confirmed the economic development goals
for Manhattan as follows:
• Create quality jobs with corresponding wages, benefits, and working
conditions
• Diversify the property tax base in Manhattan
• Decrease reliance on federal, state, and local government for jobs
• Maintain, stabilize, and build on the existing strengths of the
community
• Invest public funds in ways that create self-sustaining economic
development activities
• Use public funds to leverage private investment in economic
development
History and statement of
economic development goals 7
2006
On November 5, 2002, the voters of Riley County approved a Roads and
Jobs initiative to be funded through a county-wide one-half-cent sales tax.
The City’s portion of this sales tax, estimated at $2 million annually, is to
be dedicated to economic development initiatives within Riley County (ord.
6294). Revenue from this sales tax began after the retirement of the Law
Enforcement Center bonds by the County. The City began receiving this
revenue in September 2004.
In late 2002, the Commission approved a new economic development
funding process, procedures, and model to guide the economic development
funding allocation.
In 2003, the City Commission adopted new policies for Industrial Revenue
Bond financing and Tax Abatements. The City Commission directed City
Administration to begin providing an annual update on firms who have
received tax abatements from the City. This information is included as part
of this report.
Final reports for companies for which statistics are no longer collected
either by having fulfilled their contractual requirements or are no longer
active, are included in the final reports section found beginning on page 83
of this report.
History and statement of
e.d. goals, continued 8
2006
locations of
funded companies 9
2006
Medof funding by company
as of December 31, 2006 11
Funding by Company as of December 31, 2006
Applicant
Total Funding
2Linc.
Abbott Aluminum
Alltel (Western Wireless)
ASHA Distribution
Collegiate Marking Services
CORE
Farrar Corporation
Flint Hills Beverage, LLC**
Florence Corporation of Kansas**
Grain Industry Alliance
GTM
KanGolf
KSU Physics
Light Solutions, Inc.
Manhattan Holdings
Manko Windows
Mercy Community Health Foundation
NGML
NISTAC (formerly KEC)
NISTAC Building Project*
Paragon Technology, Inc.
Sykes
TDM
National Guard Armory
Grants
$200,000
$150,000
$250,000
$165,000
$700,000
$128,000
$1,100,000
$204,647
$905,553
$125,000
$800,000
$100,000
$112,500
$300,000
$600,000
$931,861
$1,000,000
$100,000
$1,000,000
$5,650,000
$300,000
$3,085,000
$2,725,000
$2,755,000
Totals
$23,387,561
Loans
$75,000
$150,000
$250,000
$165,000
Forgivable Loan
Building Asset
$125,000
$350,000
$350,000
$128,000
$1,100,000
$204,647
$825,553
$125,000
$80,000
$800,000
$100,000
$112,500
$50,000
$600,000
$931,861
$1,000,000
$100,000
$300,000
$250,000
$125,000
$700,000
$5,650,000
$50,000
$3,085,000
$1,525,000
$250,000
$1,200,000
$9,777,561
$4,100,000
$2,755,000
$1,230,000
$8,405,000
Alltel (Western
Abbott
Wireless)
Aluminum
ASHA Distribution
2Linc.
Collegiate Marking
Services
CORE
Farrar Corporation
Flint Hills Beverage,
LLC**
National Guard
Armory
Florence Corporation
of Kansas
TDM
Grain Industry
Alliance
National Guard
Armory
GTM
KanGolf
KSU Physics
Manhattan Holdings
Manko Windows
Mercy Community
Health Foundation
NISTAC Building
Project*
Paragon Technology,
Inc.
NGML
Paragon
Technology, Inc.
*NISTAC Building Project will be paid out with a 10 year general obligation bond issue and $5.65 million is maximum
cost
**Majority of funding for Florence Corporation of Kansas and Flint Hills Beverage includes the payout of special
assessments through 2020
2006
Job creation numbers
by active medof companies 13
Job Creation by Active Companies as of December 31, 2006 - Updated for June 1, 2007
Applicant
Farrar Corporation
Flint Hills Beverage, LLC
Florence Corporation of Kansas
GTM Sportswear
NISTAC (formerly KEC) and Manhattan Holdings*
Totals
Actual FTEs Created
Actual FTEs Created
Projected Jobs
as of 12-31-06
as of 6-01-07
Total Projected by Year
23
27
2.5
3.5
5
2009
621
499
250
2013
246.3
271.3
641
2015
157.4
184.1
187
2007
105.5
111.75
100
2006
1156
1096
1183
*The NISTAC building agreement requires creation of 200 new FTE during the first 10 years of operation
2006
Economic impact 15
Public and Private Economic Development Investments Leveraged as of December 31, 2006
Results of City Economic Development Investment
Every $1 the City invested in economic development resulted in approximately $3.41 of private sector investment.
This chart does not include certain direct benefits, such as payroll, or indirect spinoff benefits.
Applicant
2Linc.
Abbott Aluminum
ASHA Distribution
Collegiate Markting
Services
CORE
Farrar Corporation
Flint Hills Beverage
Florence Corporation of
Kansas
GTM
KanGolf
KSU Physics
Manhattan Holdings
Manko Windows
Mercy Community Health
Foundation
NGML
NISTAC (MACC)
NISTAC Building Project
Sykes (now Alorica)
TDM
National Guard Armory
Totals
City Economic
Approximate
Development
Private
Fund Investments
or other
as of December 31,
2006
Capital Investment
$0
$200,000
$150,000
$350,000
$250,000
$12,000,000
$165,000
$2,300,000
$700,000
$128,000
$1,100,000
$204,647
$0
$97,500
$4,000,000
$3,058,197
$905,553
$125,000
$800,000
$100,000
$112,500
$300,000
$600,000
$931,861
$19,058,360
$150,000
$3,220,500
$923,000
$611,500
$0
$1,200,000
$2,160,161
Total Investment
$200,000
$500,000
$12,250,000
$2,465,000
Comments
$700,000 First reporting year end of 2007
$225,500
$5,100,000
$3,262,844
$19,963,913
$275,000 Industry Dues
$4,020,500
$1,023,000
$724,000 KSU and research funds are significant
$300,000
$1,800,000 State and KTEC funds
$3,092,022
Mercy Foundation investment ($3.825
million) includes only private sector pledges
received as of July 31, 2007, not including
the $1 million pledge from this Fund.
$1,000,000
$100,000
$1,000,000
$5,650,000
$300,000
$3,085,000
$2,725,000
$2,755,000
$23,387,561
$3,825,738
$1,200,000
$0
$1,000,000
$0
$11,400,000
$11,500,000
$1,800,000
$79,854,956
$4,825,738
$1,300,000
$1,000,000
$6,650,000 KBA funds
$300,000
$14,485,000
$14,225,000 Includes expansion
$4,555,000 Lease/Purchase agreement in place
$103,242,517
2006
Property Tax Generated 17
Property Taxes (Real and Personal) Generated in 2005 2006 by Companies Receiving
Economic Development Funding
Property Taxes (Real and Personal) by Year
Company
Abbott Aluminum
ASHA Distributing
Covan
Farrar Corporation
Florence Corporation of Kansas*
GTM*
ICE Corporation*
KanGolf
Manko Window Systems*
Nanoscale*
NISTAC/Manhattan Holdings
Sykes (Alorica)
TOTAL
2005
$39,128
$194,959
$44,290
NA
$87,946
$26,873
$0
NA
$0
$14,622
$74,105
$49,497
$9,887
$110,255
2006
$49,344.38
$186,065.80
$37,002.90
NA
$51,633.74
$26,367.76
$527.56
$0.00
$0.00
$11,964.06
$80,522.50
$48,888.42
$10,111.54
$105,533.94
$651,562
$607,963
Notes:
* Subject to Property Tax Abatement
†
Old TDM property now occupied by Kansas Army National Guard
2006
individual active companies &
accountability reviews 19
2006
Funds Allocated:
$781,483 Grant
$80,000 Forgivable Loan
Manhattan economic development opportunity fund
Annual Accountability Review
City of Manhattan
5935 Corporate Drive
www.auth-florence.com/
auth-florence (florence
corporation of Kansas) 21
MANHATTAN ECONOMIC DEVELOPMENT OPPORTUNITY FUND
ACCOUNTABILITY CHECKLIST
Company: Auth-Florence
Date of Review: September 2007
Report for year ending: June 30, 2007
Review Team: Diane Stoddard and Nick Arena
Company Representatives: Kerri Winter, Vice President of Accounting and Administration
GOAL OF COMPANY:
Florence Corporation of Kansas is a commercial mailbox manufacturer specializing in
mailbox installations for large residential developments as well as locking mail boxes to
address mail security issues. After conducting an international search, the company
expanded its operations from the Chicago area and constructed a 200,000 square foot
facility in Manhattan’s Corporate Technology Park in early 2003.
Manhattan Economic Development Funding: Grant in the amount of $781,483 (special
assessment payments on four lots in the Manhattan Corporate Technology Park), and
forgivable loan in the amount of $80,000 was approved by the City Commission in February
2003. In addition, the City provided a total of four lots in the TecPark for the company to
locate its facility (Lots 13, 14, 22A and 23) at approximately 25 total acres. All incentives,
including a tax abatement, payment of the City of special assessments, and the forgiveness
of the loan is tied to the company’s compliance with four general performance areas:
capital investment, job creation, wage structure, and benefits for employees.
CURRENT STATUS: All major lines are in full production. The company was successful
in winning a competitive contract with the U.S. Postal Service. The company is producing
and shipping vertical mail boxes, cluster box units, and door chimes in Manhattan. In 2007,
the Florence Corporation was acquired by Gibraltar Industries, a publicly traded company.
GIBRALTAR is a leading manufacturer, processor, and distributor of products for the
building, industrial, and vehicular markets.
Auth-Florence
Report for Year Ending June 30, 2007
Review Date – August 2007
Page 2
PRIVATE OR OTHER CAPITAL INVESTMENTS:
Actual Capital Investment Expenditures and Time Period:
Has the cumulate target expenditures been met?
Actual Expenditure = $19,058,360
Target Expenditure = $8,000,000
= 238.2% Compliance Percentage
Cumulative Target Expenditures
$4,000,000.00
$6,000,000.00
$8,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
Subsection 12(b) Time Periods
the Agreement Date to June 30, 2004
July 1, 2004 to June 30, 2005
July 1, 2005 to June 30, 2006
July 1, 2006 to June 30, 2007
July 1, 2007 to June 30, 2008
July 1, 2008 to June 30, 2009
July 1, 2009 to June 30, 2010
July 1, 2010 to June 30, 2011
July 1, 2011 to June 30, 2012
July 1, 2012 to June 30, 2013
JOB CREATION:
Actual Job Creation and Time Period:
Total hours worked 897,214
1800*
=
498.5 FTE
Actual FTE/Target FTE = 249.2% Job Creation Compliance
Targets:
Number
1
2
3
4
5
6
7
8
9
10
Subsection 12(c) Time Periods
the Agreement Date to June 30, 2004
July 1, 2004 to June 30, 2005
July 1, 2005 to June 30, 2006
July 1, 2006 to June 30, 2007
July 1, 2007 to June 30, 2008
July 1, 2008 to June 30, 2009
July 1, 2009 to June 30, 2010
July 1, 2010 to June 30, 2011
July 1, 2011 to June 30, 2012
July 1, 2012 to June 30, 2013
FTEs
100
150
175
200
225
250
250
250
250
250
*Note: An FTE is an employee of the Corporation who has worked 1,800 actual hours for the
Corporation (inclusive of overtime hours) during the applicable period.
Auth-Florence
Page 3
Wage Structure:
Targets: Total Hours Worked (non-probationary) = 897,214
Category A: 95% at $8 or more per hour
Actual: 897,214
Category B: 15% at $10 or more per hour Actual: 538,157
Category A total hours worked = 100%/95% = 105% actual A compliance
Total hours worked
Category B total hours worked
Total hours worked
= 60%/15% = 399.9% actual B compliance
Average of A & B =252.6%
Employee Benefits: Auth-Florence will provide benefits to all trained, non-probationary
FTEs to include participation by the company in the cost of medical insurance, life
insurance, and paid vacation and holidays. Company to certify compliance. If such
certification is provided, compliance is deemed at 100% in this category.
Certification Provided: health insurance, life insurance, accidental death and
dismemberment insurance; and short-term disability provided
Comments: Sick and vacation leave offered to all trained, non-probationary FTEs
Compliance Percentage: 100%
Total Compliance:
Capital Investment: 238.2%
Job Creation: 249.2%
Wage Structure: 252.6%
Benefits: 100%
Average of above determines blended % of compliance: 210 % = 100% of incentives
Blended Percentage Range
Equal to or greater than 85%
Equal to or greater than 80% and less than 85%
Less than 50%
Portion of each of the
Incentives to be Received
100%
80%
70%
50%
0%
Auth-Florence
Page 4
DEMOGRAPHICS: (Percentage of employees who live in Manhattan compared to
Riley County, Pottawatomie County, etc.)
• Manhattan – 42%
• Riley County – 54%
• Geary County – 27%
• Pottawatomie County – 6%
• All other counties – 13%
GENERAL COMMENTS:
• 500 individuals on the payroll were noted as of June 30, 2007
NEEDED ACTIONS:
None.
Full Time Equivalent Employees
As of 6/30/2007
Work Hours Paid July 1, 2006 through June 30, 2007
Equivalent Individual Annual Hours
Equivalent Headcount as of 6/30/2007
Goal
Compliance
897,214
1,800
498.5
200.0
249.2%
Non-Probationary Hours paid at $8 or more per Hour
Non-Probationary hours paid at $10 or more per hour
897,214
538,157
% paid at $8 or more per Hour (Goal 95%)
% paid at $10 or more per hour (Goal 15%)
100%
60%
Compliance
Category A - >$8
Category B - > $10
Compliance
105.3%
399.9%
252.6%
$
$
Capital Investment
Goal
Compliance
Employee Benefits Compliance
19,058,360
8,000,000
238.2%
100%
Summary
Total Compliance
Job Creation
Wage Structure
Capital Investment
Benefits
Blended % of Compliance
249.2%
252.6%
238.2%
100.0%
169.1%
2006
Funds Allocated:
$350,000 Loan
City of Manhattan
4th Street Downtown Manhattan
www.cmssports.com
Collegiate Marketing Services 27
Company: Collegiate Marketing Services Date of Review: October 2007
Review Team: Brian Williams & Nick Arena
Company Representatives: Steve Ballard, CEO
GOAL OF COMPANY:
Collegiate Marketing Services (CMS) specializes in the
development and management of Retail, Online, Catalog and Gameday merchandise
sales for major Collegiate Athletic Departments. Current clients include the University of
Oklahoma, the University of Nebraska and the University of Texas. CMS was founded in
1996 in Manhattan, KS by two longtime Manhattan residents Steve Ballard and Jeff
Grantham. CMS relocated to Overland Park, KS in 1998. Sales have grown from
$200,000 in 1998 to $8,800,000 in 2006. CMS currently employees over 30 people at its
25,000 square feet Overland Park headquarters and over 100 people across the nation.
CMS has been developing a plan to return its headquarters to the Manhattan, KS area.
After evaluating several alternatives, CMS is excited about the opportunity that exists to
purchase, re-develop and re-vitalize two buildings located along the Downtown 4th street
corridor. The plan would maintain the retail/commercial viability of the fronts of these
4th street corridor buildings, while fully utilizing the rest of these large buildings
potential.
Manhattan Economic Development Funding: A $350,000 forgivable loan to be paid
to the company in two installments, with $250,000 being paid the first year and $100,000
being paid in year three. A conventional loan totaling $350,000, to be paid out in two
installments of $250,000 the first year and $100,000 the second year.
All of the incentives provided to the Company will be tied to meeting annual
performance requirements, including capital investment, job creation, wage structure and
benefit package targets. Failure to perform will require the Company to forfeit a portion
or the entire incentive package.
CURRENT STATUS: There are no requirements for compliance reporting until August
of 2008. Thus, a more extensive report will be provided for the 2007 calendar year.
2006
Funds Allocated:
$100,000 (maximum) Performance Grant
City of Manhattan
5925 Corporate Drive, Manhattan Corporate Technology Park
www.covan.com
covan world-wide moving, inc. 29
Company: Covan World-Wide Moving, Inc.
Date of Review: August 2007
Company Representatives: Lacy Brakefield – President
Paul Hansen – Regional Vice President
Mike Tatum – General Manager (Manhattan)
GOAL OF COMPANY:
With the growth of the surrounding area’s military and
commercial markets, Covan World-Wide Moving, Inc., plans to expand its operations
and capacities to meet the needs and demands of its customers. The company plans to
continue its commitment to the Manhattan community that it has had since the 1960’s
and further strengthen its relationship within the Manhattan area by constructing a larger
and more modern facility. Covan’s primary focus is Fort Riley, and their intent is to reposition their operation closer to the military base entrance at the Manhattan Corporate
Technology Park.
Manhattan Economic Development Funding: A performance grant of $10,000 per
full-time job created that pays at least $10 hourly and is provided benefits. A maximum
of $100,000 will be provided.
CURRENT STATUS: Covan World-Wide Moving, Inc. experienced a non-growing
year in the area of job creation. Therefore, the criterion was not met in order to trigger
the $10,000 per full-time job created performance grant.
GENERAL COMMENTS:
•
NEEDED ACTIONS:
None.
2006
Funds Allocated:
$1,100,000 Participatory Loan
City of Manhattan
301 Levee Drive, Manhattan Industrial Park
www.farrarusa.com/
Farrar corporation 31
Company: Farrar Corporation
Date of Review: October 2007
Report for year ending: December 31, 2006
Company Representative(s): Joe Farrar, President
GOAL OF COMPANY: Farrar Corporation is a family and employee owned
manufacturing company dedicated to providing the highest quality iron products to its
manufacturing customers throughout the United States. As a customer focused
organization, Farrar is dedicated to its internal and ultimate customers and will strive to
meet or exceed their expectations through continuous improvement in product, services,
and processes. Its operating philosophy is to obsessively serve existing customers and
markets while searching for new opportunities. Internally, it will embrace progressive
operational methods, moderate fiscal policy, and employee involvement culture. Farrar
will actively support safety, the protection of the environment, and the improvement of
its stakeholders’ quality of life and the local community.
Farrar Corporation opened a 37,000 square foot machining facility in Manhattan in the
spring of 2000.
MEDOFAB FUNDING: $1.1 million Participatory Loan – Final amended agreement
approved and dated March 4, 1999.
GENERAL
1. Annual financial statements, audits, or
reports.
Submitted
Reviewed
Conclusion
X
X
Balance sheet as of
September 30, 2006, shows
total assets of $14.9 million
and current and long-term
liabilities, minus
stockholder equity, of $4.6
million. Net income for
2006 was $836,000, up
from $755,000 in 2005. In
2006, overall company sales
were up 10.4% from 2005.
Sales from the Manhattan
facility were up 19.3% from
the previous year. Overall
company sales are expected
to continue to increase in
2007 and 2008.
Farrar Corporation
Report for Fiscal Year Ending September 30, 2006
Review Date – October 2007
Page 2
Submitted
X
Reviewed
X
X
X
X
X
27 FTE
9 FTE
6. Median wage
X
X
$33,000 in Manhattan
8. Company’s total payroll for 2006
X
X
$796,194 in Manhattan
9. Any potential paybacks due to any
defaults in original agreements?
X
X
No.
X
X
The business plan is to grow
the company to $30 million in
sales in the next 3-4 years.
Construction has been
completed on the 18,000 sq ft
addition to the original building
in the past year. An additional
$3.2 million has been invested
in new equipment for the
Manhattan facility during the
past year. The January 2007
Manhattan IRB issue provided
most of the funding for this
expansion for Farrar
Corporation. Farrar
Corporation expects the current
economic conditions to
continue for the next few years
and expects increased sales,
additional investment in
equipment, and the creation of
new jobs to continue for at
least the next 2 years.
2. Any corporate stock redemption or
sales during year?
3. Total jobs created as of June 1, 2007?
5. Number of new direct jobs created
during year?
PARTICIPATORY LOAN
1. Review firm’s business plan.
Conclusion
None.
The company has made every
payment on the $1.1 million
economic development loan as
scheduled.
Farrar Corporation
Report for Fiscal Year Ending September 30, 2006
Page 3
LOCAL COMMUNITY INVOLVEMENT:
Active in Chamber of Commerce, the United Way, and will match employee contributions for
charitable contributions. Farrar Corporation is also a key investor in the Advantage Manhattan
program. Also, Joe Farrar is active with Kansas State University.
DEMOGRAPHICS: (Percentage of employees who live in Manhattan compared to Riley
County, Pottawatomie County, etc.)
Manhattan – 55%
Pottawatomie County – 22%
Riley County (outside of Manhattan) – 8%
Wabaunsee County – 7%
Geary County – 4%
Clay County 4%
GENERAL COMMENTS:
•
•
•
•
•
•
•
•
•
•
Company recognized in 2003 and 2007 in the manufacturing division of the Business
Achievement Award by the Kansas Department of Housing and Commerce
Company received a national award for Excellence in Marketing from the American
Foundryman Society in 2003
Achieved ISO 9002:2000 Certification in 2003
Achieved SHARP (Safety and Health Awareness Recognition) from OSHA and KDHE.
Farrar is one of only 27 companies in Kansas to achieve this award
Farrar Corporation is the only company in the United States which produces assembly-line
ready ductile iron components for machines such as lawnmowers, race cars, the heavy truck
industry, etc.
Farrar is operating under a 10-year plan to provide future growth for the company in
Manhattan
Farrar Corporation has been operating in Manhattan 24 hours a day, 6 days a week in
Manhattan
Construction has been completed on the 18,000 sq. ft. expansion to the building
An additional $3.2 million has been invested in new equipment for the Manhattan facility
during the past year
The company has long-range plans for the development of the rest of the company-owned
land in the east industrial park for additional manufacturing facilities
NEEDED ACTION(S):
No action needed.
2006
Funds Allocated:
$40,000 Grant
$164,647 Special Assessments
City of Manhattan
5900 Corporate Drive
www.abwholesaler.com/flinthillsbev/home
flint hills beverage, llc 37
Company: Flint Hills Beverage
Company Representative: Terry Dow, Manager/Owner
GOAL OF COMPANY:
Flint Hills Beverage is a distributor for Anheuser-Busch
products throughout the region, serving Geary, Riley, and Clay Counties, and 2/3 of
Washington County and Pottawatomie County from St. George westward. The company
has a very solid customer base and is expecting growth as a result of the Fort Riley
expansion. The company moved into a newly constructed 40,000 square foot building on
December 15, 2006. The project yielded immediate cash to the City as a result of the land
sale and immediate tax revenue for the taxing jurisdictions since no tax abatement is
involved. While job creation is low, the jobs are quality jobs which include benefits.
Manhattan Economic Development Funding: Grant in the amount of $40,000 to be paid
out over a four year period at $10,000 per year and payment of special assessments on two
lots in the Manhattan Corporate Technology Park for a total of $164,647 over 16 years. In
addition, the City sold the company two lots in the TecPark for the company to locate its
facility (Lots 19 and 20 at approximately 5.99 total acres). All incentives, including
payment of the City of special assessments, and the performance grant is tied to the
company’s compliance with four general performance areas: capital investment, job
creation, wage structure, and benefits for employees.
Actual Expenditure = $3,058,197.33
Target Expenditure = $2,675,000.00
Cumulative Target Expenditures
$600,000
$2,675,000
= 114 % Compliance Percentage
Time Periods
by December 31, 2005
by December 31, 2006
Report for Year Ending December 31, 2006
Page 2
NET NEW JOB CREATION: Base jobs as of December 31, 2004 was 19.5 FTEs
Actual Job Creation and Time Period: 21 FTEs as of December 31, 2005 created over
base of 19.5 FTEs as of December 31, 2004
22 FTE – 19.5 base = 2.5 new FTE
Actual FTE 2.5/Target FTE 2 = 125% Job Creation Compliance
Targets:
Time Periods
Jan. 1, 2005 – December 31, 2005
Jan 1, 2006 – December 31, 2006
Jan 1, 2006 – December 31, 2007
Jan 1, 2006 – December 31, 2008
Jan 1, 2006 – December 31, 2009
Annually from 2010-2020:
FTEs
1
2
3
4
5
Maintain 5
*Note: An FTE is an employee of the Corporation who has worked 1,900 actual hours for the
Corporation (inclusive of overtime hours) during the applicable period.
Wage Structure:
95% of employees hired after January 1, 2005 must receive wages in excess of the target below. The new
FTE was paid a wage of $12.05 hourly
Targets:
Year
2006
2007
2008
2009
2010
2010-thru 2020
Average Wage Targets for all New FTE
$12
$11
$12
$12
$12
Maintain $12
Actual average wage for 2007 target, Jan 1, 2006- Dec. 31, 2006= $14.40
Compliance= 127.6%
Page 3
Employee Benefits: Flint Hills Beverage will provide benefits to all FTEs hired after
January 1, 2005 to include participation by the company in the cost of medical insurance,
life insurance, and paid vacation and holidays. Company to certify compliance. If such
certification is provided, compliance is deemed at 100% in this category.
Certification Provided: Letter provided dated January 2007 indicates that the company
participated in a benefits package that included medical insurance, life insurance, paid
vacation and holidays.
Total Compliance:
Capital Investment: 114%
Job Creation: 125%
Benefits: 100%
Average of above determines blended % of compliance: 116.7% = 100% of incentives
Blended Percentage Range
Portion of each of the
Incentives to be Received
Equal to or greater than 85%
Less than 50%
GENERAL COMMENTS:
• Moved into a new 40,000 square foot building on December 15, 2006
NEEDED ACTIONS:
None.
100%
80%
70%
50%
0%
2006
Funds Allocated:
City of Manhattan
520 McCall Road, Manhattan Industrial Park
http://www.gtmsportswear.com/
gtm sportswear 41
Company: GTM Sportswear
Company Representatives: Dave Dreiling, President
GOAL OF COMPANY:
GTM Sportswear, located at 520 McCall Road, sells
custom embroidered and screen-printed sportswear and related goods. The company’s
diverse markets include a national presence in K-12 schools (boosters, staff apparel, and
team wear), corporate apparel and promotional products, collegiate retail, and chair back
stadium sales. Within these markets are dozens of subset markets in which the company
has developed specialized niches. GTM’s Custom Goods Division is both their largest,
and fastest growing. Growth in this division has averaged 30% over the last 3 years and
is projected at this same level for the next several years, GTM has unlimited growth
potential and an aggressive, yet manageable growth plan. Over the last 13 years GTM
has experienced a compound annual revenue growth rate of 19.1%. GTM is in the
planning process of an expansion that will add an additional 20,000 square feet to be used
as warehouse space and add an additional 6,000 feet of completed office space. GTM
plans to spend between $1-1.2 million on the upcoming project. GTM has dedicated
itself to creating 500 new FTE positions. More than 25% of these new positions will pay
starting wages of greater than $12.50 per hour, and all positions will offer excellent
prospects for upward mobility within the company. GTM currently has 38 KSU
graduates working at their facility.
Manhattan Economic Development Funding: Forgivable loan in the amount of
$800,000 to be paid out over a four year period at $200,000 per year. All incentives are
tied to the company’s compliance with four general performance areas: Job Creation,
Capital Investment, Wage Targets, and Employee Benefits.
CURRENT STATUS: The Company continues to have very high growth and is
planning additional physical expansion in the near future.
GTM Sportswear
Review Date – September 2007
Page 2
Actual Expenditure = $3,220,500.00
Target Expenditure = $2,500,000.00
Cumulative Capital Expenditures
$2,500,000
$3,250,000
$4,350,000
$5,650,000
$8,150,000
$10,350,000
$11,850,000
$13,750,000
$15,650,000
$17,950,000
= 128.8 % Compliance Percentage
Subsection 5(b) Time Periods
Jan. 1, 2006 to Dec. 31, 2006
Jan. 1, 2007 to Dec. 31, 2007
Jan. 1, 2008 to Dec. 31, 2008
Jan. 1, 2009 to Dec. 31, 2009
Jan. 1, 2010 to Dec. 31, 2010
Jan. 1, 2011 to Dec. 31, 2011
Jan. 1, 2012 to Dec. 31, 2012
Jan. 1, 2013 to Dec. 31, 2013
Jan. 1, 2014 to Dec. 31, 2014
Jan. 1, 2015 to Dec. 31, 2015
NET NEW JOB CREATION:
Work Hours paid January 1, 2005 through December 31, 2006
Equivalent Individual Annual Hours
Equivalent Headcount as of 12/31/2006
Goal
Compliance= Equivalent Headcount as of 12/31/2006=246.3
Goal= 201
Targets:
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
492,579
2,000
246.3
201
=122.5%
FTEs
201
230
262
297
339
383
434
494
564
641
*Note: An FTE is an employee of the Corporation who has worked 2,000 actual hours for
the Corporation (inclusive of overtime hours) during the applicable period.
GTM Sportswear
Page 3
Wage Structure:
As stated in subsection 5(d) of the contract:
“No less than 75% of its FTE's, hired subsequent to October 1, 2005, are in a wage category receiving
gross before tax and other deduction wages in excess of $8.55 per hour and no less than 25% of its New
FTE's are in a wage category receiving gross before tax and other deduction wages in excess of $10.50 per
hour. All full time employees will receive at least $8 hourly. The required wages set forth herein shall
increase by 2.5% annually.”
Total New FTE from 10/1/05 through 12/31/06=
89
Hours paid at $8.55=
Equivalent Headcount=
120,795
60.40
Hours paid at $10.50=
Equivalent Headcount=
42,932
21.47
% paid at $8.55 or more (Category A)=
% paid at $10.55 or more (Category B) =
68%
24%
Compliance= Category A
Category B
Total Compliance =
68%
75% =
90.6%
24%
25% =
96%
93.3%
GTM Sportswear
Page 4
Employee Benefits: will provide benefits to all FTEs hired after January 1, 2005 to
include participation by the company in the cost of medical insurance, life insurance,
and paid vacation and holidays. Company to certify compliance. If such certification is
provided, compliance is deemed at 100% in this category.
Certification Provided: Letter provided dated January 2007 indicates that the
company participated in a benefits package that included medical insurance, life
insurance, paid vacation and holidays.
Total Compliance:
Capital Investment: 128.8%
Job Creation: 122.5%
Benefits: 100%
Average of above determines blended % of compliance: 111.2% = 100% of incentives
GENERAL COMMENTS:
• Anticipated spending of $1-1.2 million to expand and remodel current facilities
• Dave Dreiling, CEO & Founder, was the recipient of the 2007 Ernest & Young
Entrepreneur of the Year award for the Central Midwest Region
NEEDED ACTIONS:
None.
2006
Funds Allocated:
$600,000 Seed and Venture Capital Funds
City of Manhattan
1500 Hayes Drive, Manhattan Industrial Park
www.ksu.edu/tech.transfer/macc/oper.htm
www.nanoactive.com/home.asp
Manhattan holdings, llc 47
Company: Manhattan Holdings, LLC
Company Representatives: Kent Glasscock, President and CEO; Vicki Appelhans, Vice
President, Finance; and Tammy Bueker Assistant to the President and Facilities Manager
Note: Manhattan Holdings, LLC’s, fiscal year runs from July 1 - June 30
MEDOFAB Funding History: Manhattan Holdings, LLC, was approved for $600,000
in Seed and Venture Capital Funds to be paid in $200,000 increments on July 1 of
1996, 1997, and 1998.
GOAL OF COMPANY: To provide early stage risk capital for the commercialization
of new products and technologies with apparent high growth potential. The funds
will be highly leveraged and invested in companies where Mid-America
Commercialization Corporation invests management time and expertise.
PRIMARY GOAL (5-10 YEARS):
• Generate compounded annual returns of 12 to 22% through investment
strategies.
SECONDARY GOALS (10 YEARS):
• Leverage Manhattan Holdings’s investments in ventures by at least three-fold
by facilitating access to other sources of risk capital, grants, and financing.
• Create, within the region of Manhattan Holding’s focus, at least 50 new
direct, technology-based jobs, leveraged to about 200 total new jobs through
direct and indirect multiplier effects.
REPRESENTATION: The City of Manhattan will appoint a minimum of three (3)
persons proportional to the City’s investment to represent the City on the Board
of Members or other governing board of Manhattan Holdings, in order to
facilitate communication between the parties. In addition, one of these members
shall serve on the Investment Committee of the board, or any other committee
constituted to review, recommend, or approve investments by Manhattan
Holdings. The City’s representative on the Investment Committee should be able
to contribute financial, legal, or other relative expertise to the investment process.
Manhattan Holdings, LLC
Review Dated August 2007
Page 2
Submitted
Reviewed
Conclusion
X
X
2. Number of new direct
jobs created during year
per business venture?
X
X
NISTAC and Manhattan Holdings
report their job creation figures
together. Cumulatively, they have
created 105.5 FTE jobs by Dec 31,
2006.
Cumulatively, they have created a
total of 105.5 new FTEs by Dec 31,
2006.
5. Median annual income
of these new direct jobs
created during year?
X
X
Average annual MH/KEC salary is
over $49,200 with a median of
approximately $38,000.
X
KEC/MH total gross aggregate
payroll for 2006 exceeded $5
million. The entire payroll has been
created by funds from the City
(cash and/or in-kind) and other
investors in Manhattan Holdings.
X
Continues positive investment of
funds. During 2000, the City
received its first financial return in
the amount of $137,657.25. This
disbursement represented the City’s
share of returns from liquidations of
a MHL investment in FoodLabs,
Inc. This return reduced the basis
for the City’s investment in MHL
from $600,000 to $462,342.75.
GENERAL
1. Total jobs created as of
December 31, 2006?
6. Company’s total payroll
for 2006 and the portion
of that total payroll that
corresponds to jobs
created by funds
received from the City?
SEED AND VENTURE CAPITAL FUNDS
1. Review firm’s business
X
plan.
Page 3
2. Investment reports.
Submitted
X
Reviewed
X
Conclusion
MHL held equity interest (at cost)
in the following entities at the end
of 2006:
Nanoscale Materials, Inc.- $250,000
AgRenew, Inc. - $25,000
Four Fish Productions, LLC- $40,559
ICE Corporation - $192,421
NutriJoy - $320,750
Ventria - $200,000
The City’s fund represents 1/3 of the
overall investment funds.
3. Distribution of profits.
X
X
See details above regarding City’s
return in 2000.
4. City funds expended.
X
X
To date, $1,330,750 has been
invested in seven different
companies by all 3 investors.
5. Financial balance sheet.
X
X
Balance sheet from December 31,
2006 was provided and is on file.
6. Two (2) year projection
of investment funds
needed.
X
X
It is anticipated that approximately
$200,000-$600,000 will be required
within the next two years to invest
in two to four new ventures.
7. Any pending legal
actions?
X
None.
PRIVATE OR OTHER COMMUNITY INVESTMENTS:
•
•
•
$1.2 million investment from Kansas State University Foundation and KTEC
Holdings.
These companies brought over $9.5 million of new revenues, including product and
service sales, investment funds and non-local governmental grants, into the Manhattan
community during its fiscal year ending June 30, 2007. Additionally, the companies
secured nearly $4 million in new research contract awards in the last fiscal year. Since
1998, companies have generated $70 million in new revenues to Manhattan.
These companies generate $5 million in payroll annually.
Kent Glasscock is involved in the following community activities: Advantage Manhattan,
Rotary, Chamber of Commerce Board of Directors, Manhattan Public Affairs Committee,
Downtown Redevelopment
Page 4
•
•
•
•
69% of employees reside in the City of Manhattan
77% of employees reside in Riley County
10% of employees reside in Pottawatomie County
13% of employees reside outside the Riley/Pottawatomie County area
GENERAL COMMENTS:
NEEDED ACTION:
None.
2006
Funds Allocated:
$1,000,000 Grant
City of Manhattan
1829 College Avenue
www.mercyhealthcenter.org/
mercy health foundation 53
Company: Mercy Community Health Foundation
Date of Review: September 2007
Company Representative(s):
Jim Murguia, Chief Operating Officer, Mercy Health
Center; and Dr. Charles Hughes, Mercy Community
Health Foundation
GOAL OF COMPANY: Mercy Community Health Foundation is a non-profit
corporation which exists solely to support Mercy Health Center, a non-profit community
hospital. The Foundation has been active in seeking grants and pledges in support of its
capital campaign for the expansion of the hospital. The Foundation indicated in its
application that the renovation and expansion of the hospital would generate a total of 187
employees, including Mercy Regional Health Center employees, physicians, employees of
physicians and support staff. As of October 2007, the capital campaign is nearly complete.
However, it has been determined that very specific goals for future fundraising definitely
fall under the umbrella of the capital campaign. One of the specific goals is to create and
design the Molly M. Rickel Research Library and Training Center, to be housed in the
Mercy Regional Health Center, which will be used by patients, auxiliary staff, and
physicians for research and educational training. Another goal under this umbrella is the
creation of a physician auditorium which will also be used by physicians for educational
training and seminars. Both of these additional initiatives will help to attract physicians
and support staff to our region, which will in turn greatly improve the quality of health care
in the Manhattan community. With the addition of specialties to our area, the need for
more training of support staff is essential; this will be the challenge in the very near future.
MEDOFAB FUNDING: $1,000,000 Grant to be paid out at $200,000 per year for five
years beginning in December of 2001 for the purpose of assisting the Foundation to reach
its capital campaign goal for the renovation and expansion of Mercy Health Center.
GENERAL
1. Annual financial statements,
audits, or reports.
2. Total jobs created as of June
30, 2007
Submitted
Reviewed
Conclusion
X
X
On file. Pledges received as of
July 31, 2006, total $4,825,738.
X
X
The Foundation’s report
indicates that as of July 2007,
the hospital is up 184.1 FTE’s
from 2001.
Page 2
X
X
Total payroll associated with the
new positions created since 2001
equals $10,006,772.
X
X
2. Review firm’s employment
benchmarking study
X
X
3. Firm in compliance with all
other terms of original
agreements?
X
X
Hospital expansion continues as
planned. The Lobby Courtyard
was completed Summer, 2005.
On file for physicians. Mercy
Regional Health Center has
continually tracked its
employment since December
2001 (date MEDOFAB grant
was awarded).
Yes.
3.
Company’s total payroll for
2006 and the portion of that
total payroll that corresponds
to jobs created by funds
received from the City?
SPECIAL PROJECTS GRANT
1. Review firm’s business plan
PRIVATE OR OTHER CAPITAL INVESTMENT:
$4.825 million in community investment raised for Foundation capital campaign. (Does not
include monies raised for entire expansion.)
See attached report provided by Mercy Regional Health Center.
GENERAL COMMENTS:
•
•
Mercy Health Foundation continues to raise funds towards its goal of $7.35 million. If
this target is not met, the project will be scaled back.
Mercy Health Center continues to expand with the Heart Institute that will allow residents
of Manhattan to receive interventional cardiac services closer to their homes and loved
ones. These new advancements will save lives and improve the quality of life for many
heart patients.
NEEDED ACTION(S):
No action needed. The final payment on the $1 million pledged by the City of Manhattan was
paid in 2005.
2006
Funds Allocated:
$300,000 Special Projects Grant
$250,000 Loan
City of Manhattan
Kansas State Research Park
www.nistac.org/
National institute for strategic
technology acquisition and
commercialization (nistac) 67
Company:
NISTAC (National Institute for Strategic Technology Acquisition and
Commercialization) formerly Mid-America Commercialization Corporation (MACC) and
Kansas Entrepreneurial Center, Inc. (KEC)
Company Representatives: Kent Glasscock, President/CEO; Vicki Appelhans, Vice
President, Finance, and Tammy Bueker, Assistant to the President and Facilities Manager
MEDOFAB Funding History and Overview:
$300,000 Special Projects Grant – 1996
$250,000 Loan – 2000
$450,000 Loan – 2007
Kansas Entrepreneurial Center, Inc., received a $300,000 Special Projects Grant. The
City used the grant to purchase the former Big Lakes Developmental Center at 1500
Hayes Drive. KEC renovated the building at its expense to relocate its incubator business
center there along with the offices of Mid-America Commercialization Corporation
(MACC). The primary purpose of the facility is to incubate high-growth businesses that
create high-value jobs. Originally, KEC targeted the creation of 60 new FTE jobs in the
Manhattan area between December 1, 1996 and November 30, 2001. KEC originally had
a five (5) year lease at $1.00 per year and had an option to extend this lease for five (5)
more years through November 30, 2006. (Lease signed in 1996.) In 2000, KEC signed a
new lease with the City to extend the lease through November 30, 2006 for $1.00 per
year. The lease agreement signed November 7, 2000 requires KEC to create a total of
100 full-time equivalent jobs in the period beginning December 1, 1996 through
November 30, 2006. The City issued a $250,000 loan to KEC for the purposes of
increasing the capacity and adding other improvements to the facility owned by the City.
The loan was re-paid in full in October 2006.
NISTAC Building Project: $5.65 million- 2004
In December 2004, the City approved an agreement with NISTAC to operate a cityowned facility in the K-State Research Park at a cost not to exceed $5.65 million. With
the completion of the building in March 2007, NISTAC has pledged to create 200 new
jobs within a ten year period. Accountability for this requirement will begin with the
2007 calendar year.
NISTAC
Page 2
GENERAL
1. Total jobs created as of
December 31, 2006
Submitted
Reviewed
Conclusion
X
X
NISTAC and Manhattan Holdings
report their job creation figures
together.
Cumulatively, they have created
105.5 FTE jobs through December
2006.
Per November 7, 2000 agreement
with the City, job target is 100 jobs
created by KEC by November 30,
2006. Once the new building has
been completed, 200 jobs will be
created within 10 years of occupancy.
2. Number of new direct jobs
X
X
The FTE count is up 14.5 FTE
from the last report. There were
small gains across all client
companies, but two companies in
particular contributed to the
growth.
3. Median annual income of
these new direct jobs
X
X
Average annual MH/NISTAC
salary is $49,200 with a median of
approximately $38,000.
4. Company’s total payroll
for 2006 and the portion of
that total payroll that
corresponds to jobs created
by funds received from the
City
X
X
NISTAC/MH total gross aggregate
payroll for 2006 exceeded $5.0
million. The entire payroll has
been created by funds from the
City (cash and/or in-kind) and
other investors in Manhattan
Holdings.
City’s $300,000 investment enabled the expenditure of over $1.1 million in delivering economic
development services (capital building improvements and operational expenses).
Kent Glasscock is involved in the following community activities: Advantage Manhattan,
Rotary, Chamber of Commerce Board of Directors, Manhattan Public Affairs Committee,
Downtown Redevelopment.
NISTAC
Page 3
•
•
•
•
69% of employees reside in the City of Manhattan
77% of employees reside in Riley County
10% of employees reside in Pottawatomie County
13% of employees reside outside the Riley/Pottawatomie County area
GENERAL COMMENTS:
The following relates to both NISTAC and MHL:
• These companies brought over $9.5 million of new revenues, including product and
service sales, investment funds and non-local governmental grants, into the Manhattan
community during its fiscal year ending June 30, 2007. Additionally, the companies
secured nearly $4 million in new research contract awards in the last fiscal year. Since
1998, companies have generated $70 million in new revenues to Manhattan. These
companies generate $5 million in payroll annually.
• NISTAC continues to incubate companies with high-growth potential. Companies who
have worked with NISTAC include: ICE, AgRenew, Four Fish, NutriJoy, KSURF,
Nacelle Therapeutics, AgRenew, TopJobz, Compact Engine Company, Mid-America
Technology Management, KATS LLC, ASPERA, Food Safety Systems, PharmCAT,
and KCAT/CS, KDAS/VDL, Global Lipidomics, Scavengetech, LLC. Professional
Mentoring, NRG (Network Research Group) and NanoScale Materials, Inc. are
graduates of NISTAC.
NEEDED ACTION: None.
2006
tax abatement report
city of Manhattan tax abatements
overview of outstanding tax abatements
job creation statistics for outstanding tax abatements
property taxes paid by companies receiving tax abatements
tax abatement report 71
city of manhattan tax abatements
State statute authorizes tax abatements on buildings and equipment
financed with proceeds from Industrial Revenue Bonds. The City of
Manhattan has been very judicious in granting tax abatements. As of
September 2007, the City of Manhattan has five active companies that
have been granted tax abatements. In the case of four companies,
Manko Window Systems, Inc., Nanoscale Materials, Inc., ICE Corporation,
and GTM Sportswear, the tax abatements were provided to assist with
expansions of local companies operating in Manhattan. The fifth active
company to receive a tax abatement is Florence Corporation of Kansas
(Auth-Florence). Auth-Florence expanded its operations from the
Chicago area to Manhattan in 2002.
In July 2003, the City Commission approved a new Tax Abatement Policy.
The purpose of this policy is to establish the official position and
procedures of the City of Manhattan for considering applications for
property tax abatement for real and personal property used for economic
development purposes in accordance with the Kansas Constitution, or
when associated with the issuance of Industrial Revenue Bonds pursuant
to State law. Highlights of the new policy include requiring new tax
abatement recipients to obtain annual job creation targets in order to
maintain the tax abatement, and to provide an annual report to the City
Commission on the status of outstanding abatements.
Following is a description of the companies that have active tax
abatements with the City. The charts that follow provide an overview of
job creation and the terms and conditions of each company.
manko window systems, inc.
Manko Window Systems, Inc., was incorporated in 1989 and is a
commercial grade window and door manufacturer located in
Manhattan. In early 1996, Manko expanded its operations in Manhattan
with a new 68,000 square foot facility allowing additional space for
manufacturing operations, inventory storage, and improved line
management. Since 1996, the facility has been expanded several times,
with the most recent expansion occurring in 2002. Manko is located on
Hayes Drive in Manhattan’s Industrial Park.
In May 2005, the City Commission approved a resolution of intent to issue
up to $3.2 million in Industrial Revenue Bonds to finance another
expansion of the Manko facility – including construction costs and
equipment associated with the expansion – and approved a ten-year,
100 percent tax abatement on new equipment and a ten-year, 50
percent abatement on real property associated with the expansion. With
the expansion, Manko plans to expand its operations in the blast-resistant
window and hurricane-resistant window market.
In August 2005, the Commission approved an ordinance issuing up to $2.5
million in Industrial Revenue Bonds and associated tax abatement for the
purpose of expanding and equipping Manko Window Systems, Inc. The
tax abatement will begin in the 2006 tax year.
Since the issuance of the most recent IRB’s, 45,000 sq. ft. of manufacturing
space has been constructed and equipped adjacent to Manko’s preexisting facility. The remaining $700,000 of IRB’s already approved by the
Commission but not yet issued may be requested in the future to expand
the existing office and administration area by 10,000 sq. ft.
nanoscale materials, inc.
NanoScale (founded in 1995) is a dynamic and innovative company
focused on the development and commercialization of proprietary
advanced materials, including nanocrystalline metal oxides,
organometallic compounds, and various combinations thereof.
Revenues are generated through the sale of packaged and bulk high
performance materials, application services related to the materials,
application development contracts, and providing analytical services.
The advanced materials and services are offered under the brand names
NanoActive®, FAST-ACT®, NanoPak™, OdorKlenz™, ChemKlenz™, and
NanoZorb™.
NanoActive® materials are high surface area metal oxides with unique
chemical properties that can be used for any number of diverse
applications ranging from the remediation of hazardous chemical waste
to increasing the tensile strength of polymers. NanoScale is focused on
becoming the leading supplier of custom NanoActive® materials and
related technologies for high value-added consumer and military
applications.
NanoScale hosts middle- and high school chemistry classes for hands-on
experience and supports fundraising efforts of the local school districts.
The company sponsors and participates in fund raising events of Mercy
Regional Health Center, hosts a bi-annual blood drive, and proactively
encourages Associates to become actively involved in community and
charitable organizations. NanoScale allows its employees time to attend
these meetings and functions and to provide tours and demonstrations to
community organizations.
NanoScale has an extensive intern program through which the company
hires students from Kansas State University. The interns are hired for both
summer and full-year positions in all areas of the company and are
trained as full-time Associates. This program is designed to retain qualified
students after graduation and help slow the drain of students leaving the
state after graduation.
NanoScale Materials, Inc., is located in the K-State Research Park and was
assisted in its initial stages by the National Institute for Strategic Technology
Acquisition and Commercialization (NISTAC), formerly Mid-America
Commercialization Corporation (MACC), as a start-up company based
on technologies developed at Kansas State University.
ice corporation
ICE Corporation is a long-time Manhattan business, having started here in
1973. ICE specializes in advanced electronic designs and products which
specialize in aircraft industry applications. In addition, the company
provides applications which serve the agriculture industry, and the
veterinary medicine profession along with other industrial uses.
ICE expanded in Manhattan in 2002 by moving from Manhattan’s
Industrial Park to a larger existing facility on Amherst Avenue. Within the
past year, ICE has been awarded two significant contracts that, due to
federal restrictions on the reporting of military and other government
agency contracts, may not be publicly announced at this time. These
contracts have enabled ICE to increase its staffing levels by 6 FTE’s with an
average wage of $16.41 per hour. In addition, ICE has spent $244,000 on
interior building upgrades and is acquiring testing equipment for a new
Environmental Testing Laboratory. As soon as the development work is
completed on the two most recent contracts and the units move from
design to production, ICE expects to enlarge its staff by two full-time
positions early next year.
ICE's part-time employees are students in career-related fields at KSU and
these position are design to provide hands-on training for the students
while allowing ICE the opportunity to evaluate talent and offer full-time
employment to skilled graduates that would like to remain with ICE. ICE
employees 7 full time engineers, 6 of which are KSU graduates.
ICE’s tax abatement has allowed the company to compete and win
long-term international contracts in an industry where many foreign
governments provide generous subsidies to ICE's direct competitors. This
abatement has not only assisted ICE in gaining a foothold on this
international business, but has enabled the company to demonstrate the
superior ability and unique problem solving skills of their Kansas State
University-educated engineering staff.
florence corporation of kansas (auth-florence)
Florence Corporation of Kansas is a commercial mailbox manufacturer
specializing in mailbox installations for large residential developments as
well as locking mail boxes to address mail security issues. The company
expanded its operations from the Chicago area and constructed a
200,000 square foot facility in Manhattan’s Corporate Technology Park in
2003.
gtm sportswear
GTM Sportswear is a Manhattan-based company founded in 1987 as “It’s
Greek to Me.” The company started out by selling custom screen-printed
and embroidered apparel in the college fraternity & sorority market, but
soon had a presence in the high school market as well. Advertising and
selling their products via telephone and the internet has enabled GTM to
maintain their competitive edge in the worldwide marketplace, and
product demand enabled GTM to increase their production volume at an
average rate of 25% per year for each of the past 15 years.
In order to facilitate an expansion of the current GTM manufacturing
facility, the City Commission passed a resolution of intent in May 2006 to
issue up to $28 million in Industrial Revenue Bonds. Along with the IRB’s,
the Commission authorized a 10-year, 100% tax abatement on existing
and future real and personal property attributable to the expansion of the
manufacturing activity. This is the first reporting year.
inactive abatement
transportation design and manufacturing (tdm)
Transportation Design and Manufacturing qualified vehicle modifier for
various large auto manufacturers, including Ford and General Motors.
TDM came to Manhattan in 1995 to establish an alternative fuel vehicle
center, with a focus on electric, natural gas and propane-fueled
automobiles. TDM is no longer operating in Manhattan’s Industrial Park
and the company’s tax abatement was not renewed in 2004. TDM owed
a payment-in-lieu of tax for the 2003 calendar year for being significantly
under the required job creation targets.
In September 2005, the City Commission authorized City Administration to
finalize and execute a lease with the Kansas Military Board and approved
a resolution authorizing the City Manager to execute the City’s real estate
purchase with 1st Glendale Associates (TDM facility at 721 Levee Drive
and parking lot at 720 Levee Drive). The facility has been leased, with the
option to purchase, to the Kansas National Guard for their Manhattan
operations. The City agreed to dismiss the lawsuit pending in
Pottawatomie County District Court and released all past claims against
and liabilities of the seller or TDM related to the payment of taxes and/or
loans.
Overview of Outstanding Tax Abatements
Update September 2007
Name of
Business and
Exemption
Application
Date
Nanoscale
Materials, Inc.
September 7,
2001
Ordinance
Number
6257
supersedes
6241
Abatement
Length and
Expiration
Date
10 years
2003-2012
10 years
2003-2012
Abatement
Percentage
Abatement
Authorized
75% average
personal property
ED statutes
100% personal
property
ED statutes
Notes
Tax Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Abatement %
100%
100%
100%
75%
75%
75%
60%
60%
60%
50%
Not abated in 2003 due to outstanding lease on facility.
ICE Corporation
September, 19
2002
6303
9 years
2004-2012
Manko Window
Systems
September 2,
2002
6269
supercedes
4964
10 years
2003-2012
55% average on
real property
50% land and
buildings
100% personal
property
ED statutes
Under IRB
statutes
Tax Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
Abatement %
100%
100%
80%
60%
60%
40%
30%
20%
10%
Name of
Business and
Exemption
Application
Date
Ordinance
Number
Abatement
Length and
Expiration
Date
Abatement
Percentage
Abatement
Authorized
Notes
FTE defined as 1800 annually. For each year, consider only all personnel
added since January 1, 2005. Take all hours worked by these personnel
associated with expansion and divide to 1800 for total FTE each year. To
determine the annual percentage of compliance, divide total annual FTE
by Cumulate Net New FTE target. Match the annual compliance
percentage with the % of tax abatement benefit to be received for each
accounting period.
Manko Window
Systems
May 17, 2005
10 years
6494
2006-2015
50% land and
buildings
100% personal
property
Under IRB
statutes
Tax
Year
FTEs
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
11
25
34
43
56
67
78
89
100
108
Blended
% Range
Portion of each
of the Incentives
to be received
<85%
80%-84%
70%-79%
50%-69%
>49%
100%
80%
70%
50%
0%
Name of
Business and
Exemption
Application
Date
Ordinance
Number
Abatement
Length and
Expiration
Date
Abatement
Percentage
Abatement
Authorized
Notes
Must reach cumulative target expenditures and FTEs, maintain a wage
structure, and provide benefits to all trained, non-probationary, FTEs by
June 30 of each year to receive full tax abatement. The average
percentage of completion of these four requirements is then used to
calculate the “Blended Percent Range”, which is then used to derive the
percentage of the tax abatement the Corporation will receive.
Florence
Corporation of
Kansas
(Auth-Florence)
January 30,
2003
6321
Signed
Agreement
February 1,
2003
10 years
2004-2013
100% land,
buildings, and
personal property
Under IRB
statutes
- Maintain a wage structure: <95% of trained, non-probationary, FTEs
gross before taxes an other deduction wages in excess of $8.00 per hour.
<15% of trained, non-probationary, FTEs gross before taxes an other
deduction wages in excess of $10.00 per hour.
- Provide benefits to all trained, non-probationary, FTEs that include
participation by the Corporation in the cost of medical and life insurance
and paid vacation and holidays.
Tax
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Cumulative
Target Expenditures
$4,000,000.00
$6,000,000.00
$8,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
$9,000,000.00
FTEs
100
150
175
200
225
250
250
250
250
250
Blended
% Range
<85%
80%-84%
70%-79%
50%-69%
>49%
Portion of each
of the Incentives
to be received
100%
80%
70%
50%
0%
Name of
Business and
Exemption
Application
Date
Ordinance
Number
Abatement
Length and
Expiration
Date
Abatement
Percentage
Abatement
Authorized
Notes
Maintain a wage structure:
The company will be required to maintain a wage structure such that
25% of its new employees are making an average of $10.50 per hour
and the remaining 75% are making an average of $8.55 per hour. All
full-time employees will receive at least $8 hourly. This wage target will
increase by 2.5% annually.
GTM Sportswear
10 years
6592
May 2006
2006-2015
100% real and
personal property
on both existing
and the new
property
Benefits package
Provide benefits to all trained, non-probationary, FTEs that include
participation by the Corporation in the cost of medical and life insurance
and paid vacation and holidays
Under IRB
statutes
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Capital
Investment
$2,500,000.00
$3,250,000.00
$4,350,000.00
$5,650,000.00
$8,150,000.00
$10,350,000.00
$11,850,000.00
$13,750,000.00
$15,650,000.00
$17,950,000.00
New
FTEs
60
89
121
156
198
242
293
353
423
500
Job Creation Statistics for Outstanding Tax Abatements
Updated September 2007
Name of Business
Projected on
Application
Number of Full Time Equivalents
As of
As of
December
June 1,
Number of Jobs Required by
31, 2006
2007
Agreement
Number of Jobs
Over/Under projection as
of June 1, 2007
FTE
FTE
FTE
FTE
FTE
NanoScale
Materials, Inc.
75 by 2012
34
39
N/A*
N/A (Final report not due
until 2012)
ICE Corporation
36 by 2012
24
36.5
N/A*
Manko Window
Systems (2002)
55
221
231
N/A*
N/A*
176
* Not required to maintain a certain number of jobs
Name of Business
Projected on
Application
FTE
Number of Full Time Equivalents
As of
As of
December June 30, Number of Jobs Required by
31, 2006
2007
Agreement
FTE
FTE
FTE
Number of Jobs
Over/Under projection as
of June 30, 2007
FTE
By June 30 of each year.
Florence
Corporation of
Kansas
(Auth-Florence)
250 by 2009
621
498.5
Tax Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FTEs
100
150
175
200
225
250
250
250
250
250
298.5
Property Taxes Overview for 2006
2006 Real Property
Tax Paid
2006 Personal
Property Tax Paid
Florence Corporation of Kansas
(Auth-Florence)
$0.00
$527.56
ICE Corporation
$0.00
$0.00
Manko Window Systems
$53,679.38
$26,843.12
Nanoscale Materials, Inc.
$48,888.42
$0.00
$102,567.80
$27,370.68
Business
TOTAL
A total of $129,938.48 in property tax was paid in 2006 by companies
receiving tax abatements.
2006
final reports for inactive
companies 83
Past Funding Allocations
2Linc.
Funding Application: Approved by Commission on July 21, 1995
Funding Received: $75,000 Grant
$125,000 Loan
Final Status: Defaulted Loan (1996)
Final Reporting Year: December 2002
Overall Goal of Company:
2Linc. was a water systems business with the corporate elements being Pumps of Kansas,
Nebraska Waters Systemsm and Iowa Water Systems. The primary focus was on 2L
Manufacturing, a manufacturer and fabricator of plastic components for the water
systems industry.
Purpose of Funding:
The loan and grant was made to assist in relocating a small manufacturing company from
Wichita, Kansas, and to aid the local company in expanding its existing pipe pump
distributing business.
Tax Abatement History: N/A
Other Comments:
As of late 2002, Environmental Manufacturing, a successor company of 2Linc.,
purchased the company’s assets and was in business in Pottawatomie County with 15
employees.
Abbott Aluminum
430 McCall Road, Manhattan Industrial Park
Carl Reed, President, and Roger Krehbiel, Accountant
Funding Application: Approved by Commission on September 21, 1999
Funding Received: $150,000 Job Incentive Grant
Final Status: Contractual Obligations Met
Abbott Aluminum built additional space for inventory storage. In addition, the excess
capacity has been leased to an independent business, which enabled the creation of
additional jobs in Manhattan.
Purpose of Funding:
The Purpose of the City’s Job Incentive Grant was to assist with the construction of a
$500,000 facility.
Full Time Equivalency (Projected vs. Created): Projected 15; Actual Created 8
City Cost per Job Created: $18,570 per 1 Full Time Equivalent position
Private and/or Other Capital Investment by Company: $350,000
Property Tax Paid (in last reporting year): $32,000 (2004)
Tax Abatement History: NA
5960 Sykes Boulevard, Manhattan Corporate Technology Park
Kay Haug, Customer Service Manager
Funding Application: Approved by Commission on January 19, 1999
Development of a 56,000 square-foot facility in the Corporate Technology Park.
Purpose of Funding:
The purpose of the job incentive grant was to assist in the purchase of land,
equipment, and furnishings for the regional call center.
Full Time Equivalency (Projected vs. Created): Projected 300 by April 2002; Actually
Created 375 as of December 31, 2005
City Cost per Job Created: $666.67 per 1 Full Time Equivalent position
Private and/or Other Capital Investment by Company: $12 million
Economic Development Return to the City’s Investment: $48 to every $1.00 invested
by the city
Tax Abatement History: NA
Other comments: A condition of Western Wireless’ acceptance of the Job Incentive
Grant was a commitment to operate the facility in the Corporate Technology Park for 10
years.
ASHA Distributing, Inc.
809 Levee Drive, Suite A, Manhattan Industrial Park
Trace Smith, President
Final Status: Contractual Obligation Met
ASHA Distributing, Inc. was formed in 1982 to distribute heating, venting, air
conditioning, and plumbing products at a fair and reasonable price to installing
contractors and dealers.
Purpose of Funding:
The Company was in need of expanding its warehouse capacity to be able to increase the
needed inventory on-hand to meet customer demand. Increasing the inventory on-hand
and expanding its product line would help ASHA be more competitive and increase its
sales and presence in the four-state area. By marketing and actively promoting heating,
cooling, plumbing, and related products, the Company hopes to become a leader in the
Midwest region. To accomplish this vision, ASHA has built a regional distribution
facility to increase the amount of inventory needed to meet customer demands, maximize
sales with an extensive campaign to promote its products, add regional distribution and
sales offices, reinforce Customer Support services to handle the increased demands
created by the influx of new orders and broader coverage of existing accounts, and
augment company staff to support and sustain prolonged growth under the new marketing
plan. ASHA (doing business locally as Manhattan Properties, Inc.) constructed an 84,500
square foot facility at 803 Levee Drive on July 27, 1998 with a total capital investment of
approximately $2,300,000.
Full Time Equivalency (Projected vs. Created): Projected: 11; Actual Created: 5 as of
June 2003
Private and/or Other Capital Investment by Company: $2.3 Million
Other Comments:
None.
Community Online Resource Exchange
629 Poyntz Avenue
C. Clyde Jones, CORE Board President
Fred Atchison, Director of Manhattan Public Library
Funding Application: Approved by Commission in January 1999
Funding Received: $128,000 Special Project Grant
CORE’s goals were to bring community information together to improve accessibility; to
work for universal access-provide a “baseline” of services to all citizens; to promote
community problem-solving through online and face-to-face collaborations; to promote
community development, including economic development; to promote and teach
technical literacy; and to create a telecommunity center and other access points as needed
for community use.
Full Time Equivalency (Projected vs. Created): Projected: 4; Actual Created: 4.16
Property Tax Paid (in last reporting year): Tax Exempt
Other Comments:
As of March 2003, CORE was dissolved as an organization. The public library took over
responsibility for the operation of the Technology Center in 2001 and the operation of the
center is reviewed as part of the library budget process. The center continues to be very
busy and serves a variety of needs.
200 Research Drive
Dr. Ron Madl, President
Funding Application: Approved by Commission on March 19, 1996
Increase the access to, and consolidation of the technical and economic resources of its
members through a cooperative effort to meet the challenges faced by the international
grain industry in improving the marketing, distribution, and conversion of grain and oil
seeds into food, feed, and industrial products.
The Grain Industry Alliance will work to ensure that sustainability of a modern grain
industry in the United States and worldwide, the Alliance provides professional services
to agribusiness and public and private agencies involved in grain production, handling,
marketing, and utilization. This is done with modern, high-quality, and environmentally
sensitive technologies.
Full Time Equivalency (Projected vs. Created): Projected: 28; Actual Created: 0.3
Property Tax Paid (in last reporting year): Exempt
Other Comments:
None.
KanGolf, Inc.
800 Anneberg Circle
Kevin Fateley, President
KanGolf, Inc., was formed in 1993 to develop a family/student-oriented recreational
facility that would not only complement the recreational opportunities available in the
region, but also become an integral part of Manhattan’s “quality of life” reputation. The
vision was to build a facility that provides recreation for families and retirees, including
being available for junior golf programs, while serving as a learning facility for KSU
students majoring in Parks and Recreation and Golf Course Management fields of study.
The facility, called Wildcat Creek Sports Center, was planned in three (3) phases. Phase I
included a clubhouse, 18-hole miniature golf course, thirty (30) station lighted golf
driving range, sand volleyball courts, green space for badminton and croquet, and state
of-the-art batting cages. The company opened for business in May of 1994.
Purpose of Funding:
The purpose of the City’s Job Incentive Grant was to provide a $100,000 capital
investment as a requirement to obtain a $418,000, fifteen (15) year term SBA loan to
construct Phase II of the project. Phase II of the project was a nine hole par thirty (30)
golf course which opened July 1997.
Full Time Equivalency (Projected vs. Created): Projected: 8; Actual Created: 5
Other Comments:
None.
KSU High Energy Physics Group
43 Cardwell Hall
Kansas State University
Dr. Tim Bolton, Professor
Funding Application: Approved by Commission on March 5, 1996
Funding Received: $112,500 Special Project Grant
To relocate and renovate the Kansas State University motor pool garage for use as a
construction and testing facility for large components of research apparatus.
Purpose of Funding:
Construction of the facility allowed KSU to continue to be a world-class high-energy
physics research group. The facility kept KSU at the forefront for receiving federal and
other research funds.
Full Time Equivalency (Projected vs. Created): Projected: 7; Actual Created: 18
Property Tax Paid (in last reporting year): Tax Exempt
Other Comments:
None.
Gene Kleffman, CEO/President
Funding Application: Approved by Commission on April 16, 1999
$250,000 Participatory Loan
Final Status: Defaulted (2001)
The purpose of Light Solutions, Inc.was to manufacture and market a fixture known as
Alum-A-Lite. Alum-A-Lite is the name given to the patented fixture manufactured in the
plant. The new light fixture replaces the old fluorescent light fixtures found in most
office and commercial building around the United States and the world.
Purpose of Funding:
Light Solutions, Inc. built a manufacturing facility in the Corporate Technology Park in
1999.
Other Comments:
Light Solutions defaulted on its loan with the City as well as the Industrial Revenue
Bond. The trustee bank responsible for the Industrial Revenue Bond issue, Central Bank
and Trust Company of Hutchinson, secured a judgment against Light Solutions, Inc.
Central Bank and Trust Company sold the company’s remaining assets and the funds
raised from the sale were used to credit the bondholders. However, the amount collected
was far less than the outstanding bonds. The City of Manhattan stood behind the
bondholders and other creditors and thus never collected on the defaulted loan or grant.
Manko Window Systems, Inc.
800 Hayes Drive, Manhattan Industrial Park
Gary Jones, President
Funding Received: $750,000 Grant and $181,861 Present Value Interest Differential
Grant
Manko Window Systems, Inc., was incorporated in 1989 and is a commercial grade
window and door manufacturer located in Manhattan.
Purpose of Funding:
In early 1996, an application was made to MEDOFAB from Manko requesting assistance
to expand the firm’s manufacturing facility in Manhattan. Manko was looking to expand
in order to increase manufacturing capacity by building a new 68,000 square foot facility
allowing additional space for manufacturing operations, inventory storage, and improved
line management.
Full Time Equivalency (Projected vs. Created): Projected 55; Actual Created 190 as of
June 2003
Private and/or Other Capital Investment by Company: Over $7 million as of 2002
Property Tax Valuation (in last reporting year):
Tax Abatement History: Manko has received several tax abatements associated with its
expansions. Abatements granted in 2002 and in 2005 call for a 50% abatement on land
and buildings and a 100% abatement on equipment. Specific information regarding tax
abatement status is provided in the annual tax abatement report.
Other Comments:
Over the years, Manko has expanded several times. The City has assisted with several of
those expansions through the issuance of Industrial Revenue Bonds and tax abatements.
National Gas Machinery Laboratory (NGML)
Kirby Chapman, Director
Sandy Chapman, Business Manager
Funding Received: $100,000 Grant
The National Gas Machinery Laboratory (NGML) was established in 1995 within the
Department of Mechanical Engineering at Kansas State University. To answer the call for
more expertise and technical efforts in the natural gas transmission industry, a consortium
of pipeline companies, the Gas Research Institute and two aftermarket companies
financially supported the development of the NGML. NGML, now an Institute of the
College of Engineering, strives to support all technological advancements of the natural
gas industry through research, education, service, and technology transfer. The
Laboratory (1) researches issues related to reducing the costs of operating larger
reciprocating engines; (2) tests turbochargers for industrial users on its turbocharger test
stand; and (3) provides continuing educational opportunities for engineers. The
Laboratory transfers technology to existing natural gas industry employees through
presentations, invited short courses at international conferences, and commercialization
of new technology. NGML provides the technical expertise to develop and
commercialize new technology that will help the gas transmission industry compete in
the new energy marketplace and reduce pollutant emissions from the variety of
machinery used to transport natural gas.
Guiding NGML activities is its mission: Maintain a center of expertise to reduce the lifecycle costs of prime mover operations and be a focal point for industry education,
research and application; and outreach.
Purpose of Funding:
The National Gas Machinery Laboratory requested and the City granted $100,000 in
economic development funds in order to relocate its facility from Salina to Manhattan.
This move resulted in the construction of a new nationally recognized Manhattan facility,
which provides additional funds and additional jobs for the community. This 12,000
square foot facility, located at 245 Levee Drive, became operational in March of 2000.
The building provides space for the test facility and control room, mechanical shop, and
offices.
Full Time Equivalency (Projected vs. Created): Projected: 26; Actual Created: 14.1 as
of the end of 2003
Private and/or Other Capital Investment by Company: $1.2 million in building and
equipment
Property Tax Valuation (in last reporting year): Tax Exempt
Other Comments:
At the end of 2003, NGML employed 14.1 FTE.
John Wu, General Manager
Funding Application: Approved by Commission on August 3, 1999
$250,000 Participatory Loan
The goal of Paragon Technology, Inc.was to become a national computer hardware
supplier for all IT professionals in various industries, as well as expand into the areas of
wholesaling of computers and providing Internet and Informational Services. Paragon
Technology’s sole business objective was to help its customers design, identify, and
customize their computer hardware based on their specific needs.
Purpose of Funding:
The purpose of the economic development funds was for the distribution/ wholesale
company, to be called Alchemy Technology, Inc. This expansion intended to create more
high-tech, high wage jobs in Manhattan, as well as allow the company to meets its
customers’ demand.
Property Tax Valuation (in last reporting year): Leased space from ASHA
Other Comments:
Paragon, Alchemy, and Silicos, along with the two proprietors of those companies, filed
bankruptcy. In September 2004, the City received a $3,163.25 payment from the
bankruptcy court as payment for the MEDOFAB loan. Paragon made one loan payment
of $58,750 in 2000.
Sykes Enterprises, Inc.
5970 Sykes Boulevard, Manhattan Corporate Technology Park
Funding Received: $2,575,000 Job Incentive Grant
$510,000 On-Site Improvements and Property Tax Incentives
Final Status: Default (2004)
Sykes operates in-bound customer call centers for other clients.
Purpose of Funding:
Sykes operated a 42,000 square foot customer call center in Manhattan from 1998 to mid2004. Sykes was provided a significant financial incentive package from the City in
1998 to become the first anchor tenant of the new Corporate Technology Park. Total
funding of $3,085,000 for Sykes was approved on April 2, 1998. Direct City Economic
Development Incentive was $2,575,000 with the remaining $510,000 of MEDOFAB
funds approved to be used to offset direct costs associated with business park
development and other on-site improvements necessary for Sykes’s development and to
pay a portion of property taxes for five years.
Private and/or Other Capital Investment by Company: $11,400,000
Property Tax Valuation (in last reporting year): $120,428 (2003)
Other Comments:
Alorica Inc. moved into the Sykes facility in June 2004. Alorica continues to operate in
the facility and employs a large number of people as an in-bound call center. (Alorica
reported 317 FTE in October 2004, with a headcount of 333 persons.)
Transportation Design and Manufacturing Company (TDM)
Rick Koppelberger, Controller
Funding Application: Agreement #1 approved by Commission on December 6, 1995
Agreement #2 approved by Commission on December 15, 1995
Funding Received: $1,525,000 Grant
$418,000 Primary Loan
$270,000 SKILLS Training Fund Loan
Was to construct and develop a new facility in Manhattan, Kansas, for the production of
alternative fuel vehicles and the conversion of automobiles to natural gas and related fuel
systems. The plant was to be knows as an “alternative fuel” center.
Full Time Equivalency (Projected vs. Created): Projected: 198; A high of 55 FTE was
reached in 2001.
Private and/or Other Capital Investment by Company:
$11,500,000 (Including expansion)
Property Tax Valuation (in last reporting year): $106,760 (2003)
Tax Abatement History:
A ten (10) year 100% tax abatement was granted on real estate, buildings, and tangible
personal property subject to established employment provisions. The tax abatement was
in effect from 1996 through 2003.
Other Comments:
The loans were paid in full. In September 2005, the City purchased the building from
TDM for use by the Kansas Army National Guard.
2006
fund financial report 99
(8) Economic Development Opportunity Fund
REVENUES
Actual
Estimated
YTD Actual
Projected
Projected
Projected
Projected
Projected
Projected
Projected
Projected
Projected
Projected
Projected
2006
2007
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
8,568,819
0
2,193,331
100,000
45,000
0
10,297,383
0
2,221,624
100,000
45,000
0
12,109,138
13,776,361
15,672,246
17,651,602
19,724,392
21,886,335
2,243,840
2,266,279
100,000
45,000
2,288,941
100,000
45,000
2,311,831
100,000
45,000
2,334,949
100,000
45,000
2,358,299
100,000
7,500
423,820
14,776,798
482,173
16,669,812
548,529
18,654,717
617,806
20,726,239
690,354
22,894,695
766,022
25,118,156
County Sales Tax Fund
Cash Balance as of Jan 1
Application Fee
County Sales Tax
KBA Reimbursement
NiSTAC Loan payback
Miscellaneous
Collegiate Marketing - Loan payback
Interest Earnings
2,254,091
0
2,225,958
0
0
16,304
4,220,897
0
1,987,177
100,000
0
0
3,948,959
1,341,454
100,000
4,110,219
0
2,052,965
100,000
0
0
5,470,815
0
2,108,902
100,000
0
6,934,598
0
2,155,603
100,000
42,500
0
54,589
164,409
6,482,182
81,491
191,479
7,952,686
81,491
242,711
9,556,903
81,491
299,909
11,288,550
81,491
360,408
13,105,907
319,262
220,000
0
0
0
0
0
0
6,385
545,647
545,647
0
0
0
0
0
0
0
10,913
556,560
556,560
0
0
0
0
0
0
0
11,131
567,691
567,691
0
0
0
0
0
0
0
11,354
579,045
579,045
0
0
0
0
821,228
0
0
0
0
1,096,755
0
0
0
0
1,410,200
1,763,232
2,157,720
242,183
821,228
275,527
1,096,755
313,445
1,410,200
353,032
1,763,232
394,488
2,157,720
437,727
2,595,446
10,113,463
11,856,241
13,684,952
15,598,026
17,766,567
20,064,916
22,489,471
25,052,415
27,713,602
100
254,250
4,750,602
170,000
6,478,074
162,916
5,553,429
75,799
220,000
0
0
0
0
0
0
1,516
297,315
276,778
220,000
MEDOFAB
109,763
220,000
0
34,568
0
0
0
1,500
5,935
371,765
10,621
507,399
97,315
220,000
0
0
0
0
0
0
1,946
319,262
TOTAL REVENUES
5,122,367
6,775,389
6,060,828
6,801,443
8,498,333
2008
2009
MEDOFAB
Cash Balance as of Jan 1
Farrar Loan Payback
TDM Loans
NISTAC Payback
Paragon Tech. Loan
In-Lieu-Of-Sales Tax
Sykes Escrow Payment
Miscellaneous
Interest Earnings
EXPENDITURES
2006
2007
0
2007
2010
2011
2012
2013
2014
2015
2016
2017
2018
Florence Corp. of Kansas
K-18./Wildcat Creek Road Turn lane design
Mercy Health Foundation
TDM-Taxes & assessments
KSU Foundation - Equicenter Study
Riley County
NISTAC ED Contract
NISTAC Loan
NISTAC KBA Loan fronted
NISTAC Building Principal & Interest
Covan
Collegiate Marketing Svc
Meadowlark Hills
Conference Center - Downtown
NBAF Commitment
44,070
10,000
265,461
0
0
20,000
188,532
0
0
0
0
1,642
2,938
44,070
20,465
0
0
0
0
180,000
50,000
450,000
1,000,000
123,320
0
500,000
529,705
2,367,855
MEDOFAB
0
0
55,000
40,966
200,000
0
295,966
0
0
0
0
200,000
0
200,000
TOTAL EXPENDITURES
825,671
44,070
20,465
0
0
0
0
190,960
0
0
0
742,593
20,000
100,000
44,070
10,465
0
0
0
0
195,162
0
0
0
738,388
0
0
44,070
10,465
0
0
0
0
198,479
0
0
0
738,153
0
0
44,070
10,465
0
0
0
0
200,861
0
0
0
741,373
0
0
44,070
10,465
44,070
10,465
44,070
10,465
44,070
10,465
44,070
10,465
44,070
10,465
202,870
204,898
206,947
209,017
211,107
213,218
743,033
738,133
741,633
738,295
742,718
500,000
44,070
20,465
0
0
0
0
185,940
0
0
0
740,892
20,000
100,000
2,111,619
1,500,000
5,000,000
1,011,367
1,018,088
988,084
991,167
996,769
1,000,437
997,566
1,003,115
1,001,847
1,008,359
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
201,332
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,567,855
2,312,950
1,011,367
1,018,088
988,084
991,167
996,769
1,000,437
997,566
1,003,115
1,001,847
1,008,359
267,753
4,207,534
3,747,878
306,067
3,441,811
5,790,076
7,480,245
9,125,379
10,865,074
12,688,183
14,597,589
16,769,001
19,061,802
21,487,624
24,044,055
27,445,849
10,000
5,867
108,252
37,500
450,000
1,000,000
267,753
MEDOFAB
Florence Corp. of Kansas
Mercy Health Foundation
NISTAC ED Contract
TDM Buillding and Land Purchase
GTM
Misc.
Net Balance
4,296,697
MEDOFAB Cash Balance (as of July 31, 2007)
RICOED Cash Balance (as of July 31, 2007)
1,332
200,000
11/8/2007
COMMENTS:
Revenues:
NISTAC Payback- Replaces KEC - pays $3,847 monthly beginning 6/1/01 through October 2006. Final payment is $3,792.
Dividends- Manhattan Holdings. These are estimated dividends on Man. Holdings investments.
In-Lieu of Sales Tax- KanGolf clubhouse annexed in 2004 and in-lieu of sales tax discontinued
Interest Earnings estimated at 2% annually
NISTAC KBA Loan - $1million over 10 years
NISTAC loan of $450,000 - monthly payments of $3750 starting after first $130,000 is forgiven. First full pymnt due Feb 2010.
Expenditures:
Loan in 2000 is $250,000 to KEC, to be paid back beginning 2001 through October 2006.
Mercy Community Health Foundation Approved November 6, 2001
is $1 million total, with $200,000 paid out in 5 annual installments beginning December 2001. Cash available reflects annual encumberance of funds for this grant.
Florence Corporation includes forgivable loan, real estate closing costs, utility hook-on fees, and utility extensions to facility.
Future Florence Corporation includes $44,070 annually through 2020 for special assessments (street, water and sewer)
Flint Hills Beverage includes $10,465 annually through 2020 for special assessments (street, water and sewer) and $10,000 annually for 4 years beginning 2006 and ending 2010.
TDM Building and Land Purchase - $1,000,000 to be paid from this fund; remainder to be paid from Utility Reserve Fund
TDM Building - 2005 taxes and assessments paid from project ED0501 (part of closing $52,172.25) and County tax ($12,514.14)
TDM Parking Lot - 2005 taxes and assessments paid from closing check from Charlson-Wilson ($1,322.43) and County tax ($1,192.68)
2004- MACC Contract was paid from this source due to temporary suspension of the General Fund 1 Mill for Economic Development
2003- Misc. exp includes $2,435 to Springsted for Auth-Florence financial review, $10,900 paid to the Bond & Interest fund for 2003 Emergency Budget Cuts; and $16,616 paid to the State of Kansas on the KEOIF Loan for Sykes
NISTAC building assumes 10 year General Obligation Bond Issue through 2015
NISTAC Loan assumes $450,000 0% interest loan with first $130,000 in payments deferred
NISTAC KBA funds fronted - $1 million
11/8/2007

tax abatement report

Transcription

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