RDA Annual Report 2016
Posted on December 31, 2016 – 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 2016
Bill Barnes, Emporia Enterprises Representative
Dan Slater, County Representative
Rob Gilligan, City Representative
Mel Scheller, At Large Representative
Mike Sikes, Emporia Chamber of Commerce Representative
Jim Kessler, City Representative
Pat Wiederholt, County Representative
Mark McAnarney, City Manager
Jeanine McKenna, President Emporia Area Chamber of Commerce
Marc Goodman, County Attorney, Lyon County
Christina Montgomery, City Attorney, City of Emporia
Casey Woods, Main Street Director
Allison Garrett, President, Emporia State University
Dean Hollenbeck, President, Flint Hills Technical College
Officers and RDA Staff
Rob Gilligan, Chair
Jim Kessler, Vice Chair
Jeanine McKenna, Secretary
Mark McAnarney, Treasurer
Kent Heermann, President
Robin Nelson, Executive Assistant
SPECIAL THANK YOU
RDA Board members Bill Barnes completed his three-year term. We thank him for his service to the region. Werner Golling, who has been a representative on the RDA Board of Directors since June 2015, will be moving to Wichita, Kansas in the near future. We thank Werner for his service.
The Return on Investment from 1995 to 2016 is $917,000,000 in new capital investment in buildings and equipment with over 2,245,000 sq. ft. in buildings. The job creation is over 2,000 jobs, which represents 12.3% of the total employment in Lyon County (16,205). The total employment has declined since 1994 because of bankruptcies, relocations, closings and downsizings. Some of the companies that closed were Didde Web Press, and Modine Manufacturing. Tyson Foods downsized by 1,300 jobs in 2008. Our diversi- fied economic base continues to experience primarily organic growth in jobs and new capital investment.
In last year’s report Emporia and Lyon County private-sector with 100 or more employees continued to ex- perience job creation. In fact, from January 1, 2013 to January 1, 2016, there were 929 full-time jobs creat- ed at those private sector employers of 100 or more employees.
Hostess Brands, Simmons Pet Food, and Birch Communications accounted for more than 800 of those new jobs. Increased sales and demand for goods and services created those jobs.
Top Private Sector Employers
in the City of Emporia with 100 or more employers
Job Growth January 1, 2013 to 2016
Note: Hostess Brands closed and liquidated in November 2012. The assets were purchased April 8, 2013. The new owners opened the plant in April 2013.
On May 4, 2016 Birch Communications celebrated their twenty year anniversary in Emporia. The roots of the company were a start-up company Valu-Line, created by the “serial” entrepreneur Steve Sauder. The
company was sold to Birch Telecom in early 2000’s and grew to nearly 500 employees in Emporia. With the change in telecommunications rules and regulations, the Birch Telecom business model experienced financial headwinds. The company declared bankruptcy twice in the early 2000’s. In 2007 Birch was acquired, and up through 2014, the employment numbers were in the upper 90’s.
Beginning in 2015, over 161 jobs were added in Emporia. On July 21, 2016, the employment was reduced slightly.
Cargill purchased the pet food plant on Graphic Arts Road in the spring of 2012 fr om American Nutrition, who purchased the operations from Safeway in 2007. In 1978 Safeway Pet Food began operations in Emporia.
In late 2015 a new plant manager with over 30 years of pet food manufacturing experience moved to Emporia. This past year, the production levels increased, older inefficient equipment was replaced with more updated equipment, and the pet food plant has increased its production. Emporia Cargill Pet Food plant has the potential to expand in the coming years.
Recently, Detroit Diesel Remanufacturing Central has rebranded to Detroit Reman, which is a Daimler Company. The first location of Detroit Reman was at 2828 W. 12th Avenue, which is currently the Emporia School District’s Transportation operations.
In the fall of 1993, Detroit Reman relocated to their primary location at 840 Overlander Street. Over the past twenty years, there have been multiple plant expansions. In August 2015, they leased a new 80,000 sq. ft. warehouse, west across Overlander Street. This new warehouse building allowed them to consolidate ware- house and storage operations from multiple locations throughout Emporia.
Over the years, their business has evolved from rebuilding Diesel Engines to rebuilding NAG1 automatic transmissions.
On September 1, 2015, Fanestil Meats held a ribbon cutting at their Fanestil Meats Fresh local market location at 4700 West U.S. Highway 50. The Farm Fresh Market is a huge success. In addition to Fanestil Meat products, local Kansas source foods, such as cheese, pecans, eggs, frozen pies, milk, vegetables, and many more food items are available.
On May 5, 2016, Dan & Jan Smoots, Fanestil Meat owners, received the Small Business Administration— Wichita District Small Business Persons of the Year award.
In addition to the west Highway 50 location, is the original plant on South Highway 99. Total employment has grown to nearly 100 employees, with a sales growth of 23% in the last two years. The goal of Fanestil is to relocate their entire operations to the west Highway 50 location in the near future. Fanestil will be celebrating 75 years in business in 2017.
On November 5, 2016, Hostess Brands became a publicly traded company on the NASDAQ with the trade symbol of TWNK.
Apollo Global Capital and Metropoulos & Company are retaining 42% of the company ownership. Dean Metropoulos, the Chairman, and President William Toler, will keep their roles under the ownership.
This past year the Emporia Hostess plant continued upgrading equipment and adding robotics to the operations. It is the “flag-ship” plant of the entire bakery operations.
Simmons Pet Food
As mentioned last year, Simmons continues to add employees as the sales and production output increases. They have the capacity in place to continue job creation with current production equipment.
July 2015, the H.J. Baker project was announced and the Incentive Compliance Agreement (ICA) was signed in September 2015. With great anticipation, we believed that construction of their facility would begin in the first quarter or second quarter of 2016.
On April 12, 2016, the following statement was issued by H.J. Baker:
“H.J. Baker continues to be interested in the opportunity of building a facility in Emporia. The
timing of the construction has been shifted due to changes in the market conditions for the high tech
encapsulates anticipated to be produced there.
Currently we are looking at additional products to be made at the site which will influence the design, investment, and process. With that, we expect to move ahead with a more robust operation and business model to give this critical project the best opportunity to succeed in the long term.
The City of Emporia has been very gracious as our plans have changed and we hope to continue our association with them as time moves on.”
We continue to receive updates from H.J. Baker on the project.
On June 26, 2015, the Flint Hills Mall submitted a Community Improvement District (CID) application. The RDA reviewed the application for completeness and submitted it to the Emporia City Commission. The CID application and development agreement were approved by the City Commission on October 21, 2015. The CID sales tax collections began in the second quarter 2016. The renovation of B&B Theaters was completed and reopened on September 23, 2016. More improvements, such as exterior facades and parking resurfacing are continuing.
The Emporia Pavilions began in May 2013. In 2015 the Tax Increment Financing (TIF) was approved. In June 2016 the Community Improvement District (CID) ordinance was approved. In early September the site preparation work began. The proposed retail development will have up to 258,300 sq. ft. of retail space on the 39-acre tract. The project cost is estimated to be $38,836,951 with $6,069,235 in reimbursement from TIF and CID pay-as-you-go funds. The developer equity/private financing is $30,767,716.
NEW PROJECT LEADS
The Kansas Department of Commerce business recruitment office has been going through some transitions. Three years ago there were five full-time staff or contract employees in the business recruitment division. In 2013, Kansas had contract employees in Los Angeles, Chicago and New York, which covered business expansion and recruitment projects for west coast, the Midwest, and east coast markets. The other two employees were based in Kansas covering the Plains States from North Dakota to Texas and the Kansas City metro area. Many of my economic colleagues from Georgia and other state were somewhat envious of the Kansas Competitive Advantage.
As of Monday, August 15, 2016 there will only be 1½ employees working on business expansion and recruitment for the State of Kansas. With a 70% reduction of support staff, the overall recruitment efforts will change.
Kansas communities, including Emporia will need to start generating more of their own leads. In an average year, a good number of our leads came from the Kansas Department of Commerce (KDOC).
Companies that located here in Emporia from KDOC leads were CAMSO (which was originally Caterpillar, Inc.), and Norfolk Iron & Metal. Two other companies which leads came from KDOC and direct contact by the company were Simmons Pet Food (which originally was Menu Pet Food) and Hill’s Pet Nutrition.
This past year, the RDA participated in several Team Kansas/Kansas Department of Commerce marketing events. In March, at the Industrial Asset Management Council (IAMC) Spring Conference in New Orleans, a dinner was hosted with 24 consultants.
Attended a lunch in Dallas, Texas with guest speaker Michael Cramer, Executive Vice President of Hostess
Brands. That lunch had 14 site selection consultants.
Select USA 2016 in late June was a Team Kansas/KDOC event attended by RDA staff. This conference was hosted by the U.S. Department of Commerce for Foreign Direct Investment (FDI).
Earlier in June the RDA hosted six site selection consultants in Emporia, who were guests of Team Kansas/ KDOC at the Symphony in the Flint Hills.
Other independent site selector consultant marketing events attended by RDA staff was the Southern Economic Development Council (SEDC) Meet the Consultant event in Atlanta, Georgia. The Site Selection Guild meeting in Little Rock, Arkansas, and the Economix event in Atlanta, Georgia.
The RDA has contracted twice with Applied Marketing for a target marketing effort. The first contract began in 2014, through the end of the first quarter in 2015. The H. J. Baker project lead was developed by Applied Marketing.
The second contract, a twelve month contract, was from October 2015 to September 2016. Several leads have been developed. We are currently working on the active leads and several potential projects in the future.
We are strongly considering another contract with Applied Marketing for 2017. With few leads from the Kansas Department of Commerce, the RDA will have to be a more proactive marketing effort beyond retention and expansion, in the recruitment of businesses.
FORWARD LOOKING STATEMENTS
The past year, it appears that the future is quite promising with a number of companies considering multi-million dollar projects with quality job creation. Some of these projects may have renewed life in 2017 or beyond. We have several existing companies considering expansions, which hopefully will occur in 2017.
Most industry sectors are relatively strong with “headwinds” in the oil & gas industry, agriculture, and agriculture related equipment. Optimism continues to prevail.