Annual Report 2013 - Beaver County Corporation for Economic

UPDATE
Shell Continues Assessment of Beaver County
as preferred Ethane Cracker Plant Site
After nine months of study, Shell extended until December
31, 2013 its option to purchase nearly 1,100 acres of Potter
Township industrial property from Horsehead Corp. The
extension allows Shell to continue its evaluation of business
issues including assessing market conditions, sourcing of
natural gas from regional suppliers, and site factors for building
an ethane cracker in the Northeast.
If built, the multi-billion dollar petrochemical plant would
represent one the region’s largest private sector investments
in decades. The project promises to bring up to 10,000 plant
construction jobs at the peak construction period, and once
operational, 400 new, direct, production positions. Additionally,
Shell’s readily available, derived ethylene commodities could
attract related “cluster industries” and a potentially significant
number of additional downstream manufacturing jobs.
To encourage projects of this scale, state legislation was
passed to approve up to 350 acres of the site as a Keystone
Opportunity Expansion Zone (KOEZ). KOEZ designation can
exempt certain Pennsylvania and local taxes over a prescribed
timeframe, potentially up to 22 years if a company creates
over 400 new jobs and invests over $1 billion during its first
seven years of occupancy. A working partnership of officials
and economic development agencies have organized to help
coordinate local approvals needed to qualify for the KOEZ
designation. This steering group consists of the Beaver County
Commissioners, the Potter Township Supervisors, the Center
Township Supervisors, and the Central Valley School Board,
assisted by economic development staff from the Pittsburgh
Regional Alliance, CED, and the Pennsylvania Department of
Community and Economic Development.
organization profile
The Beaver County Corporation for Economic Development (CED) is the lead
economic development agency for Beaver County. CED undertakes activities
to expand and diversify the Beaver County economy.
CED is:
A private, non-profit development corporation
Dedicated to enhancing economic development by facilitating private investment and job creation
Governed by a highly motivated volunteer Board of Directors
A professionally staffed resource for business assistance
A partnership of private business and public sector experience and talents
A real estate developer and financing entity for projects that create significant economic opportunities
Table of Contents
Financial Highlights and Trends............................... 2
Special Initiatives............................................................ 8
Chairman’s Letter to the Membership .................. 3
Performance Summary................................................ 9
Fiscal Year 2013
Financial Summary........................................................ 10
Review of Activities........................................................ 4
CED Membership............................................................ 11
Development Activities............................................... 5-7
CED Board of Directors................................................. 12
ABOUT THE COVER: VEKA, Inc. utilizes 3-D coordinate measuring
technology for high efficiency design.
Photo by Emmanuel Panagiotakis - www.pittsburghpictures.net
This material was funded through a grant from the Commonwealth of
Pennsylvania Department of Community and Economic Development
Annual Report 2013
1
financial highlights & trends
Yearly Comparison
Major Category x $1,000
FY 2011
FY 2012
FY 2013
Total Assets
$ 37,936
$ 34,391
$ 32,429
Total Liabilities
$ 3,041 $ 2,859
$
Total Net Assets
$ 34,895
$ 31,532 $ 29,697
Total Liabilities & Net Assets
$ 37,936
$ 34,391
$ 32,429
2,732
Financial Trends
Total Support
and Revenue
Revenues Less
Expenses
Total
Expenses
$3 M
$4 M
$5 M
4,474
$
$4 M
$2.5 M
$3 M
$2 M
$3.5 M
$2 M
$1.5 M
3,331
$
$3 M
1,598
1,495
$
$
$1 M
$0
$2.5 M
$
1,111
1,872
$
($3 M)
$0
2
2012
2013
($3,363) ($1,836)
($2 M)
$1 M
2011
($273)
($1 M)
$2 M
$1.5 M
$1 M
2011
2012
2013
($4 M)
2011
2012
2013
Annual Report 2013
letter to the membership
ROBERT RIMBEY
September 23, 2013
Chairman
Dear Voting Class Members:
On behalf of the Board of Directors, I am pleased to provide you this 26th Annual Report summarizing the
activities and accomplishments of the Beaver County Corporation for Economic Development (CED) during
the fiscal year ending June 30, 2013. It is with regret we recognize the departure of Dr. Gary Keefer from the
Board of Directors during the past year. As Penn State – Beaver Campus Chancellor, Gary brought a unique
and valuable perspective on a wide variety of economic matters, especially those pertaining to engineering,
education, and job training and workforce issues.
Responding to changing organizational circumstances and marked increased external activity in the local
energy sector, the CED Board undertook a thorough analysis of its internal Board management practices and
staff functionality and adopted a comprehensive 2013 Strategic Plan. With the assistance of a consultant,
the Plan will help guide CED activities in areas of strategy, business model, and organizational design by
implementing specific action items.
With your highly valued support, we will continue to thoughtfully invest to help optimize future employment
opportunities and economic benefits for Beaver County’s current and future generations.
With best wishes, I am
Sincerely,
Robert Rimbey
Chairman, Board of Directors
Annual Report 2013
3
f i s c a l y e a r 2 013 r e v i e w o f a c t i v i t i e s
Completed Projects
CED activities are focused on efforts to encourage diversified job creation and private investment.
The listing below provides a summary of the projects in which CED participated or involved CED
developments during the year.
PROJECT NAME
LOCATION
NEW JOBSPROJECT INVESTMENT
Creekside Springs, LLC
New Brighton/Pulaski
20 New$ 1,355,000
Beemac Trucking, LLC
Harmony
50 New$ 3,100,000
Selectrode Industries, Inc. Hopewell
Cessna Hospitality Associates Chippewa
20 New$ 5,732,000
Sensible Organics Beaver Falls
15 New$ 3,000,000
Hopewell Business & Industrial Park
Hopewell
Speculative Investment$ 1,000,000
VEKA, Inc.
Marion
38 New$ 5,800,000
TMK IPSCO
Koppel
37 New$ 22,750,000
$
Danzer Veneer Americas Darlington
Culver Industries
Hopewell
40 Retained
PGT Trucking, Inc.
Potter
90 Retained
FY 2013 TOTALS 4
5 New
275,000
105 New$ 5,000,000
290
$
NA
120,000
$ 48,132,000
Annual Report 2013
development activities
Veka expands local plant
Marion Township - In the mid 1980s, Beaver County was reeling from a seemingly
endless string of plant closures and downsizing. The first good news reversing that
downward spiral was welcomed from an American subsidiary of a German company,
which would invest $12 million to build a cutting edge PVC extrusion plant on a
reclaimed strip mine in northeastern Beaver County. Over the past 25 years and
after numerous expansions, VEKA has become one of the county’s biggest and best
success stories, now employing over 360.
VEKA manufacturers and distributes vinyl extruded PVC window and door
profiles, PVC fencing, railing, and deck products, and accessories predominately to the
residential remodeling and new construction markets. VEKA’s latest investment is
a $5.8 million expansion involving new equipment, infrastructure, and employee
training resulting in an additional 38 new jobs at its Beaver County facility.
The company received an offer from the Department of Community and Economic
Development (DCED) including a $190,000 Pennsylvania First Program grant, $114,000
in Job Creation Tax Credits, and a $17,100 Guaranteed Free Training grant which will
be used to prepare its new workforce. The project was coordinated by the Governor’s
Action Team, in collaboration with the Pittsburgh Regional Alliance, and CED.
For more information on VEKA, Inc. visit www.vekainc.com.
Annual Report 2013
5
development activities
Supporting business and job growth
CED is designated by the Commonwealth of Pennsylvania as Beaver County’s certified provider for the Commonwealth’s loan programs.
To be certified, CED staff must meet performance standards in underwriting and servicing loan requests on an on-going basis.
With certification, CED can directly offer assistance to clients on a number of Commonwealth incentive programs, including Small
Business First (SBF) and Pennsylvania Industrial Development Authority (PIDA) loans. SBF can provide up to $200,000 for fixed assets
and working capital to eligible enterprises. PIDA can provide up to $2 million in fixed rate, long term financing for real estate projects
involving acquisition, renovation, or construction.
As of June 2013, CED had nearly $5.1 million in PIDA financing outstanding representing 11 projects, three closed SBF loans with over
$300,000 in outstanding financing, and 16 active loans under its Business Development Fund, with receivables of over $1.7 million.
Sensible Organics - West Mayfield BOROUGH
• In 2001, CED funded Sensibility Soaps, a startup company
which established a manufacturing facility for its line of organic bath and beauty products with four employees, including the owners.
• Ahead of and successfully riding the wave of popularity
of organic products with pioneering in-house research and
development, Sensibility Soaps became the first personal-care
manufacturer to receive USDA’s National Organic Product
Certification.
• Sensibility Soaps was sold to an private equity firm, which earlier
in 2013 raised $3 million with expansion plans in all areas of custom
product formulation, private labeling, and contract manufacturing.
• The new company, Sensible Organics, currently employs 40 with
an additional 15 jobs to be added as operations expand.
PGT Trucking, Inc. - Potter Township
• PGT Trucking is a leader in interstate freight transportation
serving steel, building materials, machinery, oil and gas, and
automotive industries nationwide from its 31 terminals.
• To assist in recruitment and training, PGT purchased a state-of-the art, hands-on visualization simulator that effectively replicates a
controlled, virtual reality tractor trailer driving environment.
• PGT can now efficiently test and train new drivers as well as
reinforce safety practices by retesting current driving staff,
reducing costs of fuel, insurance, accident claims, and equipment
depreciation.
• CED provided a $102,000 loan toward the acquisition of the
$120,000 simulator Investment.
6
Annual Report 2013
development activities
TMK IPSCO - KOPPEL BOROUGH/AMBRIDGE BOROUGH
• TMK IPSCO manufactures seamless tubular goods, drill pipe, coupling
stock and line pipe for the oil field industry. It is the current
successor to Koppel Steel, which CED assisted in acquiring certain
properties from Babcock & Wilcox in the early 1990’s.
• TMK plans to expand its capacity in Beaver County due to increased market demand for its product lines, and expects to create 37 new
jobs.
• The $22.7 million expansion includes purchasing new finishing
equipment and employee training.
• DCED pledged $150,000 of support in the form of Job Creation
Tax Credits and a Pennsylvania First Program grant.
Creekside Springs, LLC
NEW BRIGHTON BOROUGH AND PULASKI TOWNSHIP
• Creekside Springs Is a supplier of bottled and flavored water for
private label, co-package, and corporate brand products from its
Ambridge and Salineville, Ohio plants.
• CED purchased the former Tegrant Diversified Brands plant, entering
into a long term lease/purchase agreement with Creekside, to
accommodate expansion of the company’s flavored water products.
• CED secured a $677,500 PIDA loan on Creekside’s behalf and will
provide $300,000 in additional financing toward Creekside’s
purchase of the facility.
• The company currently employs 20 and anticipates hiring an
additional 20 as a result of the project.
Danzer Veneer Americas - Darlington Township
Beemac Trucking, LLC - Harmony Township
• Beemac Trucking, LLC is a full service truck transportation,
warehousing, and materials handling company.
• CED assisted in establishing the predecessor company, Penn
•
Beaver Veneer, a $7 million project, in 1989.
• Danzer is the largest producer of decorative veneer worldwide and a
top 10 producer of hardwood lumber in North America.
• The North American Darlington plant is one of four Danzer •
Veneer plants, with others in Africa, Europe, and South America.
CED approved a $250,000 Business Development Fund loan and
a $200,000 Small Business First loan to assist in the company’s $1.9
million construction of a compressed natural gas fueling station.
Beemac will invest an additional $1.2 million in purchasing ten new
CNG tractors and retro-fit another thirty.
• DCED offered a Pennsylvania First Program grant of $200,000 to • The CNG fueling facility, the first of its kind in Beaver
assist in the expansion of the Swiss based firm, which expects County, is expected to save the company almost 50% of its cost of fuel,
105 new jobs resulting from its $5 million investment.
and create 50 new jobs within the company.
CED Owned Properties Year-End Development Project Summary
PROJECT
Aliquippa Industrial Park Bridgewater Crossing
Hopewell Business & Industrial Park Steel Street Commerce Center 1200 Airport Road Monaca Commerce Center WestGate Business Park
Annual Report 2013
STATUS
Marketing site
Marketing site
Expansion underway
Fully leased
Fully leased
Marketing site; 60% leased
Marketing site; funding approved for infrastructure expansion
7
special initiatives
Working together for future growth
RIVERFRONT
DEVELOPMENT Program
Riverfront Development
Twenty years ago, the Beaver County Corporation for Economic
Funding Byspearheaded
Source a program to capitalize on the unique
Development
1%
opportunities
by the Ohio and Beaver Rivers for
5%created
8%
communities
in Beaver County. The Beaver County Riverfront
Development Program was created with the cooperation and
12%
support
of the Beaver County Board of Commissioners, the
Community Development Program of Beaver County, and nine
47% create investment
riverfront municipalities. The idea was simple:
opportunities by improving public access to the Beaver and Ohio
Rivers. A plan was completed that identified a series of
improvements and guiding principles for development of the
county’s riverfronts
focusing on sites with unencumbered access
27%
to the waterways. The municipalities formed an advisory panel
that prioritized and selected the projects to undertake and CED
administered the program.
The program completed its last project in 2013, the Bridgewater
Connector – Trail North to link the Bridgewater riverfront to the
new Veterans Memorial Bridge. The overall program resulted in
30 completed projects with an investment of over $9.8 million of
public and private funds, created a resurgence of activity along
the riverfronts of the Beaver and Ohio Rivers, and leveraged
substantial indirect investment in riverfront communities.
Riverfront Development Program
Funding By Source
ENTERPRISE ZONE PROGRAM
CED has provided staffing and management assistance to the
county for the Enterprise Zone Program since 1987. Tax credits for
new construction and a streamlined environmental remediation
8
processing are among the benefits to the 26 Enterprise Zone
communities. Since inception, over $12.8 million of Enterprise
Zone grants and tax credits have been awarded. This year an
application to include Chippewa Township as an Enterprise Zone
community was approved, a $500,000 Enterprise Zone Tax Credit
was awarded to Cessna Hospitality Associates for a $5.7 million
hotel development in Chippewa, and a $50,000 grant was received
through the program to assist with CED’s administrative costs.
PA ROUTE 18 CORRIDOR ANALYSIS
The funding was approved for a consultant-led real estate study
that will first evaluate the potential of various underutilized
industrial and commercial properties surrounding the proposed
Royal Dutch Shell ethane cracker plant, and then develop master
plans for at least two priority sites. Planning leadership is headed
by a broad-based coalition including CED, Beaver County Board
of Commissioners, and representatives from Central Valley School
District, Center and Potter Townships, and Pittsburgh Regional
Alliance. CED applied for two grants from DCED totaling $50,000
this past year and will provide a $25,000 match to finance the
planning effort. Results are expected in spring 2014.
BEAVER COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
Since 1994, CED has provided management services to the Beaver
County Industrial Authority (BCIDA). BCIDA is a tax exempt
financing conduit lender for projects that qualify under the
Internal Revenue Code. As of December 31, 2012, BCIDA had
almost $950,000,000 in outstanding tax exempt financing.
During the year, BCIDA approved an application on behalf
of National Gypsum Company to the Pennsylvania Economic
Development Financing Authority for $87.35 million in bond
financing. Of that amount, $79.35 million will be used to refinance
a portion of the company’s 1997 bond issue used to construct and
equip its wallboard production facility in Shippingport, which
produces wallboard from synthetic gypsum made from fly ash. Another $8 million will finance new equipment at the site.
National Gypsum currently reports employing 77 in Shippingport.
Annual Report 2013
performance summary
Measuring
yearofofprogress
progress
Measuring another
another year
Review
JobJobs
Created
Review
1988
1989
1,083
186
459
1990
1991
2007
2008
2009
2010
2011
2012
2013
799
283
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
733
427
798
222
402
263
567
315
148
338
216
188
36
990
649
372
283
140
180
140
0
290
200
600
400
800
1,000
1,200
CED actively supports the retention and growth of
existing firms, while also attracting new ones to the
County. The table and graph demonstrate the
progress made by CED in meeting its goals.
CED Cumulative Totals
Completed Projects
New Jobs
333
10,384
Average Yearly Wage
$33,394
Temporary Jobs/FTEs
3,276
New Private Investments
$1,419,432,000
Number of Grants/Loans
297
Dollar Amount of Grants/Loans
Annual Report 2013
$126,535,000
9
financial summary
Summary of Statements of Support, Revenue,
Expenses and Changes for the Year Ended
June 30, 2013.
Summary of Statement of Financial Position
June 30, 2013.
SUPPORT
ASSETS
Grants
$627,535
REVENUES
Loan Fees, Membership Dues,
Interest, Rental Income
and Miscellaneous $
TOTAL SUPPORT & REVENUE
$1,494,707
867,172
Cash and Cash Equivalents
Loans Receivable
Grants Receivable
Lease Receivable
Inventory of Lots
Property held for transfer
Property and equipment net
$ 12,860,873
$ 1,725,175
$
151,554
$ 1,058,134
$ 9,836,308
$
300,063
$ 6,496,680
TOTAL ASSETS
$ 32,428,787
LIABILITIES AND NET ASSETS
EXPENSES
Economic Development Projects
Management and General
$ 2,812,324
$ 518,494
TOTAL EXPENSES
$3,330,818
EXCESS OF SUPPORT AND
REVENUE OVER EXPENSES
$ (1,836,111)
$ 31,532,492
$ 29,696,381
Net Assets, June 30, 2012
Net Assets, June 30, 2013
CED’s financial condition is continuously monitored by the Board of Directors
through monthly financial reports. Fiscal year activities are audited and
certified by an independent CPA.
Liabilities
Accounts Payable and
Accrued Expenses
Notes Payable
Deferred Revenue/Deposits
$
927
$ 2,634,470
$
97,009
TOTAL LIABILITIES
$2,732,406
Net Assets
Unrestricted
Temporarily Restricted
$25,063,998
$ 4,632,383
TOTAL LIABILITIES
AND NET ASSETS
$32,428,787
89%
11%
0
10
10
20
30
40
50
60
70
80
90 100
Annual Report 2013
ced membership
Thanks to those who support
progress in Beaver County
CED enjoys financial support from a significant number of governmental, business community, and
individual contributors. This support is used for a variety of projects which stimulate job creation and private
investment through locally evolved initiatives. The Beaver County Board of Commissioners continued its strong
and ongoing financial support of CED activities since its inception by contributing $200,000 from its general
fund during the 2013 fiscal year.
Further demonstrating the strength of the public-private partnership in Beaver County is the degree of
support received from individual and business contributions. In 2013, membership from the private sector
represented 86 local companies and individuals. Membership involves a minimum contribution of $200
and allows participation in the annual election of the CED’s Board of Directors. Members are gratefully
acknowledged as follows:
2013 MEMBERSHIP
Airport Area Business Complex
Ardex, L.P.
I. David Atcheson, Jr. D.M.D.
Aurora Environmental, Inc.
Avelli Manufacturing
Daniel C. Baker Associates, Inc.
Michael Baker Corporation
Beaver County Building &
Construction Trades Council
Beaver County Chamber of Commerce
Beaver County Transit Authority
Beemac Trucking, LLC
C. J. Betters Enterprises
Bolland Machine
c3controls
Castlebrook Development Group, LLC
Civil & Environmental Consultants, Inc.
Colona Transfer, LP
Columbia Gas of Pennsylvania
Commonwealth Real Estate Services, LLC
Community College of Beaver County
Cottrill Arbutina & Associates, P.C.
Creekside Springs, LLC
Danzer Veneer Americas, Inc.
Duquesne Light Company
ESB Bank
First National Bank of Pennsylvania
GatewayRehab
Geneva College
Greek Catholic Union of the U.S.A.
Annual Report 2013
Halama Brothers Electric, Inc.
Hannon Electric
Henderson Brothers, Inc.
Heritage Valley Health System
Herr/Voss Stamco
Homer Nine & Sons, Inc.
Horsehead Corporation
IBEW Local Union 712
Job Training for Beaver County, Inc.
Keystone Profiles, Ltd.
Laborers’ District Council of Western PA
Lennon, Smith, Souleret Engineering, Inc.
Lombardo Industries Incorporated
Martino, Inc.
McCarl’s, Inc.
McDanel Advanced Ceramic
Technologies, LLC
Metalwerks PMD, Inc.
Moderne Glass Co., Inc.
MVM Associates, Inc.
Nalco Company
Neo Solutions, Inc.
NOVA Chemicals
John P. O’Leary, Jr.
Penn State Beaver
Penn State Special Metals, LLC
Penna-Flame Industries
Peoples Gas
PGT Trucking, Inc.
Pittsburgh Intermodal Terminals, Inc.
Pittsburgh Mineral & Environmental
Technology, Inc.
Pittsburgh Tubular Shafting, Inc.
Precision Kidd Steel Co. Inc.
Q-Cast, Inc.
Rome Monument, Inc.
Sardello, Inc.
Shasta, Inc.
Sippel Co., Inc.
Southwestern PA Area Labor
Management Committee
Standard Steel Specialty Company
Steel Built Corporation
Steel Street Services, Inc.
Surface Engineering Associates
Town Center Associates
Bob Tracy Insurance
Tri-State River Products, Inc.
Tucker Auto-Mation Holdings USA, LLC
Turney Electric, Inc.
Uhl Construction Co., Inc.
Union Building & Loan Savings Bank
Value Ambridge Properties, Inc.
Veka, Inc.
West-Aircomm Federal Credit Union
WHEMCO, Inc.
Widmer Engineering, Inc.
Woodske Law Offices
Wolfpac Technologies, Inc.
W. D. Wright Contracting, Inc.
11
2013 board of directors
Policy set by community leaders
CED Board of Directors formulates policy and provides direction for staff
activities. Corporation bylaws assure a blend of private and public sector
experience and talents. This is achieved by the representation of the three
Commissioners of Beaver County, at least one representative of labor, and the
community at large. Other members are selected based on demonstrated
leadership capabilities in both large and small business and education. At
least four members of the Board of Directors are elected each year by the
members of CED at its annual meeting.
chairman
Robert Rimbey
VICE chairman
Charles O’ Data
Dennis Nichols
treasurer/
secretary
Carolyn Renninger
Retired Banker
Tony Amadio
Karen Barness
Chairman
Beaver County
Commissioners
NOVA Chemicals
Manager, Community
Relations, Retired
Kraig Diehl
Barbara
D’Alessandris
Membership
Development
Coordinator,
IBEW Local 712
Retired
Bank of New York
Mark Peluso
Owner
Town Center
Associates
12
Richard Shaw
Beaver County
Commissioner
President
Beaver County
Foundation
CEO
c3controls
Gary Keefer
Chancellor
Penn State - Beaver
Joe Bevevino, CPA
Vice President/
Share Holder
Cottrill, Arbutina
& Associates, P.C.
Daniel Martone
David O’Leary
Principal
Martone Engineering
and Surveying Co.
Retired
Business Executive
Joe Spanik
Dr. Melvin Steals
Beaver County
Commissioner
Retired School
Administrator
Annual Report 2013
Site work underway expanding the
Hopewell Business & Industrial Park.
250 Insurance Street • Suite 300 • Beaver, PA 15009 • 724-728-8610
www.beavercountyced.org