RDA Annual Report 2013
Posted on January 31, 2014 – By Emporia RDA
The Regional Development Association of East Central Kansas (RDA) is the lead economic development organization for Lyon County and the Emporia area. It is a collaborative effort of the Emporia Area Chamber of Commerce and Visitors Bureau, Emporia Enterprises, the City of Emporia, Lyon County, Flint Hills Technical College, Emporia State University and Emporia Main Street. The RDA is located in the Trusler Business Center with the Emporia Area Chamber of Commerce and Visitors Bureau, 719 Commercial Street, Emporia, Kansas 66801. RDA President Kent Heermann may be contacted at 620- 342-1600 or firstname.lastname@example.org. For further information go to www.emporiarda.org.
RDA BOARD OF DIRECTORS 2013
Jon Geitz, Emporia Enterprises Representative
Scott Briggs, Lyon County Representative
Rob Gilligan, City of Emporia Representative
Mel Scheller, At Large Representative
Mike Sikes, Emporia Chamber of Commerce Representative
Bryan Whitmore, City of Emporia Representative
Ken Bazil, Lyon County Representative
Mark McAnarney, City Manager (Interim)
Jeanine McKenna, President Emporia Area Chamber of Commerce
Marc Goodman, County Attorney, Lyon County
Blaise Plummer, City Attorney, City of Emporia,
Casey Woods, Main Street Director
Michael Shonrock, President, Emporia State University
Dean Hollenbeck, President, Flint Hills Technical College
Officers and RDA Staff:
Jon Geitz, Chair
Scott Briggs, Vice Chair
Jeanine McKenna, Secretary
Mark McAnarney, Treasurer
Kent Heermann, President
Robin Nelson, Executive Assistant
SPECIAL THANK YOU
RDA Board members Jon Geitz and Ken Bazil completed two consecutive three-year terms, which is the term limit. We thank them for their six years of service to the region.
Two of these billboards are located close to Emporia on I-35; one is located on the east side of I-35 just south of the Emporia exit 127. The second billboard is located on the north side of the Hostess Brands property. It is visible on I-35 from the east bound lanes just prior to exit 128. The Hostess Brands public relations firm LAK Public Relations had these billboards installed. Photo courtesy of IM Design Group.
The past year is one for the record books for Emporia and the Regional Development Association of East Central Kansas (RDA). The metrics used by the RDA to measure the results are job creation, total annual payroll, capital investment in equipment and buildings and new building square footage.
In summary 2013 was the best year in the history, in terms of job creation, average annual salary and total annual payroll, of the RDA’s efforts to date. Over 360 new full-time jobs with a total annual payroll estimated over $13,000,000 were created, which were welcome after years of job loss. The new capital investment from Hostess Brands, Simmons Pet Food, Thermal Ceramics and the CVS project are in excess of $103,890,000 with the addition of 47,945 sq. ft. of warehouse and retail space.
The 360 jobs created are the most in any year over the past 20 years of the RDA’s existence. The capital investment was the second highest at $103,890,000. The highest year was in 2006 with the announcement of the Westar Energy Emporia Energy Center in excess of $300,000,000.
We have had a flurry of activity in the 4th quarter of 2013. That promises to generate more economic activity in 2014, the Emporia economy will continue to grow. Many of these projects are confidential now and hopefully those projects will move forward.
We are finally beginning to see expansions from our existing major employers and manufacturers. This generally is a bellwether indicating that better economic conditions are coming our way. This was a great year; we are looking forward to 2014 being another year of growth.
In early March 2013 the RDA held a meeting at the Granada Theater highlighting the accomplishments of the last twenty years. The former RDA Chairs Dale Davis, Mike Castello, Senator Jeff Longbine and current RDA Chair Jon Geitz discussed the past, current and future of the RDA and economic development. When the RDA was created insufficient funding was in place to compete. After competing for the Cessna project in 1994 and the passage of a ½-Cent City Sales Tax for property tax relief and industrial and economic development. 4 The twenty year result is over $797,589,270 in new capital investment, the addition of 1,985,168 sq. ft. of new buildings and over 1,439 new full-time direct jobs.
Hostess Brands at the end of 2012 was in the process of liquidation by a Federal Bankruptcy Court. Generally bankruptcy liquidations do not have favorable outcomes for the local economy. From late November to late January the RDA staff was proactively contacting potential purchasers such as equity groups, Bimbo USA, Flowers and McKee Foods Corporation (Little Debbie) of the Emporia, Kansas snack cake assets.
On January 30, 2013, Apollo Global Capital and Metropoulos & Co. submitted a “stalking horse” bid for $410 million to purchase five of the eleven cake plants; Emporia was one of those five.
The RDA staff proactively contacted Apollo Global Capital via an emailed letter, within hours of the receipt of the letter Michael J. Cramer contacted the RDA office to begin discussions on the reopening of the plant and the possibility of relocating production equipment to Emporia to create more jobs.
The RDA staff, with the assistance of the Kansas Department of Commerce (KDOC) staff had several conference calls and meetings to put together a performance-based incentive proposal. In the first phase of their expansion, the State of Kansas offered an incentive package.
According to the KDOC incentive proposal, the project assumptions were that 400 new full-time jobs would be created with 250 jobs in year 1 and 150 jobs in year 2 with an average annual salary of $33,000 or a total annual payroll after year 2 in excess of $13,200,000. The capital investment in the Emporia Hostess Brands facility (not including the building and real estate) was in excess of $60,500,000.
Apollo Global Management and Metropoulos took possession of the Hostess Brands/Dolly Madison assets on April 19, 2013. On April 25, 2013 a formal announcement was made that the new Hostess Brands would reopen the Emporia plant and create 300 full-time jobs within 2 years.
Emporia hosted a ribbon cutting event on June 6th with Governor Brownback and representatives from Apollo and Metropoulos. On July 15th Hostess Brands had a national product launch. Emporia participated in a week-long celebration of events including a Twinkie Fest. Hostess Brands in appreciation of the warm welcome from Emporia placed a billboard at the south entrance to Emporia on I-335 which reads “Emporia we ❤ you”.
Hostess Brands, Emporia and the RDA received national recognition in the Site Selection Magazine, a national publication distributed to over 45,000 site selection consultants, corporate real estate executives and various C-level executives at various small to large businesses in the manufacturing industry.
As of November 15, 2013 Hostess Brands has 332 full-time employees.
On September 19th RDA Chair Jon Geitz, KDOC staff person Alicia Hutchings and RDA President Kent Heermann met with Hostess Brands EVP Mike Cramer regarding an expansion.
Since September the scope of the project has varied. On November 27th a formal application was filed and to be reviewed at the December RDA Board meeting. Hostess Brands will be constructing a 36,000 sq. ft. warehouse at an estimated cost of $3,500,000. A new “auto bake” production line will be installed in the existing plant at an estimated cost of $25,000,000. With building modifications and equipment refurbishing an additional $2 to $3 million will be invested. The total project cost will be in excess of $30 million. With the expansion an additional 50 employees will be hired full-time, the estimated increased annual payroll will be $1,650,000. It is anticipated that the expansion will be completed and operational by the end of the second quarter or beginning of the third quarter of 2014.
Mike Cramer mentioned that more growth and investment has a high probability of occurring at the “flagship” Emporia plant.
SIMMONS PET FOOD in the first quarter of 2013 added a $4.59 million production line and 30 new full-time jobs at an additional payroll of over $1,000,000. The RDA submitted a Kansas Department of Transportation (KDOT) Economic Development request to fund a substantial portion of the paving of Warren Way.
KDOT awarded a $500,000 grant to the City of Emporia to construct Warren Way. The Industrial Sales Tax Fund will be used to cover the local match.
In February the City Commission approved a revised Incentive Compliance Agreement (ICA) with REG EMPORIA. The expiration date on this ICA is December 31, 2018. It is the third ICA between the City of Emporia and REG.
REG is a Bio-diesel plant which began construction on the Emporia facility in the second quarter 2007. Construction was placed on hold in the second quarter 2008 just at the beginning of the “financial crisis”. From 2008 to today, REG has made the agreed upon payments to the City of Emporia and Kansas Gas Service which reimburses the city for the natural gas main improvements for the project.
Renewable Energy Group (REG) in early 2012 conducted an initial public offering (IPO) and became a publicly traded company on the NASDAQ with the ticker symbol of REGI. REG acquired Syntroleum Corporation in December 2013. Refer to the following link for media release http://regi.com/news/2013/12/17/renewable-energy-group-inc-agrees-acquiresyntroleum-corporation.
REG fully intends to complete the REG Emporia facility, which is a strategic location for distributing Bio-diesel in the western United States.
The RDA assisted Thermal Ceramics on their expansion, a $7.1 million upgrade of their production equipment and the creation of two jobs, an engineer and a quality control person. The equipment and technology upgrade is a commitment by Morgan Advanced Materials, plc (the parent company) to Thermal Ceramics for continued growth in our local economy.
The RDA provided the due diligence and recommendation on Fanestil Meats proposed expansion project, we await their next steps. The City of Emporia approved a competitive performance-based incentive proposal, which will assist Fanestil in their growth plans.
Dynamic Discs was assisted by the RDA in locating an available warehouse building on 3601 W. 6th Avenue. Jeremy Rusco founded Dynamic Discs in 2005, an entrepreneurial enterprise, which started in his apartment; he then rented commercial space in west Emporia and finally acquired a store front at 912 Commercial Street. Dynamic Discs has grown beyond the physical boundaries of their building; and was leasing any and all adjacent space. Dynamic Discs has entered into an agreement with Latitude 64 and created Dynamic Distributing. This group leased a 10,000 sq. ft. warehouse/distribution building at 3601 W. 6th Avenue. Dynamic Distribution will be the exclusive distributor of the Latitude 64 products in North America. The sport of disc golf is growing. Dynamic Discs and its affiliate companies are positioned well to gain more market share.
In 2013 the RDA Board of Directors and staff visited most of the larger basic employers in Emporia. Several of those businesses expressed needs that could be addressed locally. Simmons Pet Nutrition with their east and west buildings needed Warren Way constructed, which would reduce the length of over 3,000 trips annually between the two buildings. The RDA wrote a Kansas Department of Transportation economic development grant to fund a substantial portion of the paving cost. Then the City of Emporia funded the local match.
Detroit Diesel Remanufacturing and Glendo Corporation are both located on Overlander Road. The pavement conditions were so poor that their equipment needed to be recalibrated periodically because of the vibrations of Overlander Road traffic. Overlander Road received an overlay in the fall of 2013.
Hopkins Manufacturing needed to acquire surplus Kansas Department of Transportation (KDOT) right-of-way, which was on the north side of the new property. The RDA coordinated with KDOT and Hopkins on this project. The surplus right-of-way was acquired by Hopkins in late 2013. The property acquisition could allow a future building expansion to the north of their existing building.
The RDA provided the initial due diligence and recommendation on the Community Improvement District application for the Historic Breckenridge Hotel and Convention Center in the first quarter of 2013.The recommendation was subject to receiving verification of financing on the project. Once the financing documentation information is received, the application can be further processed with various CID public hearing and market study requirements.
Over this past year the RDA assisted Rockin-Z Ice with their site selection process in Emporia. The automatic ice vending building is located on East 12th Avenue.
We assisted the CVS development group in the neighborhood meeting in the first quarter of 2013. The CVS 11,945 sq. ft. building located on 12th Avenue & Merchant Street is currently under construction and should be open in the first quarter 2014. The building cost is estimated to be in excess of $1.7 million. The total job creation is projected to be 25 to 30 with 6 to 8 being full-time employment. CVS is scheduled to open in the first quarter 2014.
The RDA set up the marketing mission trip to the ICSC RECON 2013 event in Las Vegas, Nevada in May. Several appointments with retailers and developers were secured. Several retailers were “cold called” at the event and the network events provided a good source of leads. We have several active retail leads such as Project ECHO which intends on filing a Tax Incentive Financing (TIF) application in January 2014.
NEW PROJECT LEADS
About 28 leads were from our partners at the Kansas Department of Commerce (KDOC) and Kansas City Area Development Council (KCADC) Animal Health Corridor. The majority of the leads came in the third and fourth quarters of the year. Several leads were for an existing building, which were not available in our area. We have about 8 active files open. Several of the leads require several days of staff time in preparing the proposal.
In 2013 the RDA staff participated in four Kansas Department of Commerce marketing events. In January a breakfast and lunch with the various site selection consulting firms was held in Greenville, SC. At the spring Industrial Asset Manufacturing Council (IAMC) meeting, KDOC hosted a dinner event, over 25 consultants attended the event.
In Dallas, TX in April KDOT hosted a marketing event with several Dallas-based real estate professionals engaged in site selection.
An event in Chicago was attended by RDA staff in September. The RDA staff visited four consultants prior to the KDOC event.
The RDA staff attended the Southern Economic Development Council (SEDC) annual Meet the Consultants event in Atlanta, GA in April 2013. Over 15 consultants presented at the events, several individual meetings were held with the various consultants.
Additionally the RDA staff attended the full IAMC event in Salt Lake City, UT.
This past year the RDA website was upgraded for desktop, mobile, iPads and iPhones. In November and December the RDA staff participated in online webinars in social media – LinkedIn, Twitter and Facebook. Our goal for 2015 is to utilize social media for communication for lead generation and updates on the RDA activities.
In February 2014 ESU Professor Sasidharan will assign a 4-member team to implement and assist in the social media upgrade for the RDA.
There are several economic development target marketing firms that contract with economic development groups to generate leads for recruiting new businesses to a community. We continue to work with those businesses and hope to implement a targeted marketing effort in late second or early third quarter 2014. In order to enter into proactive marketing plan over several years, the RDA will have to redeploy current marketing resources and increase its marketing budget.
The Committee of 50 was created in the 1950’s when the Emporia community decided to be more proactive in business recruitment and expansion. More than twenty years ago this committee became Emporia Enterprises.
The primary objective of Emporia Enterprises is to acquire and develop large tracts of land for Business Parks for manufacturing, distribution, warehouse and primary businesses where the majority of their sales are outside of the Emporia market area and outside of the State of Kansas.
An inventory of industrial sites is available in Park III and Park IV. Currently, there are no available sites owned by Emporia Enterprises with rail access.
Emporia Enterprises obtained a purchase option on a 318-acre tract in northeast Lyon County along the east side of the Burlington Northern Santa Fe railroad tracks between Road 200 and 210 and Road S. The site has rail access, a 100,000 gallon water tower on site, a 24” highpressure natural gas main adjacent to the property and close proximity to electricity.
Over the first half of 2014 this site will be evaluated and plans presented to the Lyon County Commission and the Emporia City Commission for the proposed acquisition and development.
It takes years to acquire purchase-options on sites, plan to install infrastructure to a site, budget the funding for the infrastructure. Once the infrastructure is in place or a plan to install infrastructure prior to development, then the sites are competitive.
As mentioned earlier in Park III, Warren Way will be constructed in 2014. That final infrastructure development has all the remaining lots in Park III “shovel ready: with all infrastructure to the lot lines.
With the development of Fanestil just west of Emporia on Highway 50 the City Commission is proceeding in constructing sanitary sewer mains to serve Fanestil’s needs and extend the sewer main to the southeast corner of Park IV, which is a 151-acre tract northeast of the intersection of U.S. Highway 50 and Road F.
Water will also be extended adjacent to the Fanestil development and will loop Park IV on the south and west of the park, then connecting to the water main on the north side, which will loop the entire Park IV with water.
Early in December 2013 the City of Emporia and Lyon County agreed to participate in a corridor study with the Kansas Department of Transportation on West Highway 50 adjacent to Industrial Park IV. The local match is provided by Emporia Enterprises, which needs the study to continue the orderly development of Park IV located on the north side of West Highway 50 east of Road F.
The Kansas Department of Transportation (KDOT) has jurisdiction over access to U.S. Highway 50 from Park IV. We are being proactive to have a plan in place when time is of the essence on working with an active prospective business.
FORWARD LOOKING STATEMENT
During the fourth quarter of 2013 we went through a planning process of the RDA for the future five years. We need to be forward looking in 10, 15, 20 and 50 years.
The Aquatic Center bonds were paid in full in 2013. The funding source was the industrial and economic development portion of the City of Emporia ½ cent sales tax. There will be between $450,000 and $500,000 available to utilize to create higher skilled and greater than average salary jobs and diversity of the local economy with more basic businesses that bring new wealth to the community.
The resources are available to strengthen the marketing program, develop our existing inventory of property to be ready for development with a closing fund in landing projects to Lyon County and the Emporia area.
We will need to broaden the fund participation from Lyon County in site acquisition and infrastructure development in order to be competitive.
We have several projects that are carryover to 2014. Next year appears to be quite promising.