Economic Development Grant Offer and AgreementCity of Salina
Economic Development Grant Offer and Agreement
Offer
This agreement entered into on thel DP day of NUgM�aer', 2012 is made by and between the
City of Salina, Kansas, 300 West Ash Street, Salina, KS, herein called the "City ", and Tischlerei — Fine
Woodworking, LLC, whose address is 2656 Scanlan Ave., Salina, KS 67401, herein called the
"Grantee."
WHEREAS, the Grantee has submitted to the City an application for grant of City economic
development sales tax funds for the reimbursement for major equipment purchases for the addition of
primary industrial jobs; and
WHEREAS, the City's Salina Economic Development Incentives Council (SEDIC) reviewed
Grantee's application and recommended to the Salina City Commission the granting of $45,000 in City
economic development sales tax funds for Grantee's project; and
WHEREAS, on November 26, 2012, the Salina City Commission approved the expenditure of
$45,000 as an economic development grant for Grantee's project consisting of the following:
The purchase of "Project Equipment" as included in the Grantee's list of Equipment Costs and.
Facility Improvements. This Project Equipment was procured by Grantee in an accelerated manner in
anticipation of grant consideration and in order to promptly commence operations on October 1, 2012.
The Project Equipment is described in more detail in the attached application letter dated November 20,
2012 submitted by Grantee, Excerpt of Minutes and copy of Resolution Number 12 -6947.
NOW THEREFORE, pursuant to City of Salina appropriations authority and Resolution 12 -6947
and in consideration of (a) the Grantee's acceptance of this offer, (b) the benefits to accrue to the City of
Salina and the public from the accomplishment of the project, and (c) Grantee's compliance with the
assurances and conditions as herein provided, the City of Salina hereby offers and agrees to pay $45,000
as the City's share of allowable costs incurred in accomplishing the project.
This offer is made on and subject to the following terms and conditions:
Terms and Conditions
1. Maximum Grant Obligation. The maximum obligation of the City of Salina under this Offer
shall be $45,000.
2. Project Equipment. The Project Equipment shall be installed and fully operational upon the
execution date of this Agreement, as certified by the Salina Airport Authority upon request of the
Grantee.
3. Grant Funds. Payment of the City's share of the allowable project costs as detailed in the
Grantee's attached application will be made pursuant to paid invoices submitted to the City by
Grantee. Grantee may request multiple drawdowns of grant funds.
4. New Jobs. On or before December 31, 2012, Grantee shall provide the City with an affidavit
stating its current number of new jobs on the basis of full -time employees as of October 1, 2012
( "Current New Jobs "). Grantee shall use every reasonable effort to meet the job creation
estimate of 25 (inclusive of those Current New Jobs reported in the October 1, 2012 affidavit)
total new full -time jobs retained for at least one year ( "Total New Jobs ") over the 36 month
period commencing January 1, 2013 and ending December 31, 2015 (the "Qualification
Period "). A full -time job is defined as an employee of Grantee that has worked a minimum of
2,080 hours during a calendar year.
5. Potential Repayment Obli ag tion. Grantee agrees to repay a proportionate share of the grant
funds if the job creation estimate of 25 Total New Jobs is not realized during the Qualification
Period. In order to determine whether Grantee must repay any grant funds, Grantee shall provide
an affidavit to the City reporting its Total New Jobs as of the end of each calendar quarter during
the Qualification Period. Each affidavit shall be due within 14 days following the end of each
calendar quarter. If at the end of any four sequential calendar quarters, Grantee shall have
attained 25 or more Total New Jobs for each of the sequential calendar quarters, Grantee shall
not be obligated to repay any of the grant funds and Grantee's obligations shall be fulfilled. If
Grantee shall not have attained 25 or more Total New Jobs for four sequential quarters during the
Qualification Period, Grantee shall be given credit for the highest number of Total New Jobs
sustained for any period of four sequential calendar quarters during the Qualification Period as
its Total New Jobs figure. Within 30 days after receiving Grantee's final affidavit for the
Qualification Period, Grantor shall calculate the number of New Jobs to be credited to Grantee
and notify Grantee of any amount of the grant funds to be repaid. Any grant funds to be repaid
by Grantee to the City shall be due and payable within 60 days of the date of the City's notice to
Grantee of the amount of grant funds to be repaid.
6. Equipment Resale. Grantee agrees not to resell or dispose of project equipment during the
Qualification Period without the written permission of the City.
7. Insurance. Grantee agrees to maintain all insurance coverages as required in its October 10,
2012 Lease Agreement, including all amendments with the Salina Airport Authority and
continue to name the Salina Airport Authority and City of Salina as named co- insurers.
8. Contact for City. The official contact for the City is:
Lieu Ann Elsey
City Clerk
300 West Ash, P.O. Box 736
Salina, KS 67401
785- 309 -5735 (0)
785- 309- 5738(F)
lieuann.elsev(n salina.org
9. Contact for Grantee. The official contact for the Grantee is:
Olaf Gerhardt
President
Tischlerei — Fine Woodworking, LLC
2656 Scanlan Ave.
Salina, KS 67401
(785) 346 -2036
info@tischlerei-inc.com
10. Grant Agreement. The Grantee's acceptance of this offer, ratification and adoption of the project
application incorporated herein shall be evidenced by execution of this agreement by the
Grantee, and the offer and agreement shall comprise a Grant Agreement. Such Grant Agreement
shall become effective upon the Grantee's acceptance of the offer and shall terminate upon
fulfillment of its terms by the City and Grantee.
City of Salina
�r-
JPRon Gage ty Manager
Acceptance
Attest:
Lieu Ann Elsey
City Clerk
The Grantee does hereby ratify and adopt all assurances, statements, representations, warranties,
covenants and agreements contained in the project application letter and incorporated materials referred
to in the foregoing offer and does hereby accept the offer, by such acceptance, agrees to comply with all
of the terms and conditions in the Offer and in the project application letter.
Evidenced this 4V4 day of bev > 20 /L
Tischlerei — Fine Woodworking, LLC
By:
O Gerhardt
resident
Attest:
By: ,.ti.-e._ z�
7rtror 4atmen (Name)
Dnu4, ,,f (Title)
November 9, 2012
Mr. Jason Gage
City Manager
City of Salina
300 West Ash Street
Salina, KS 67401
Re: SEDIC Grant Application
Dear Mr. Gage:
Tischlerei — Fine Woodworking, LLC requests Salina Economic Development Incentives
Council consideration of an $84,000 grant from the City of Salina special sales tax fund for
economic development. The grant funds would assist Tischlerei to proceed with additional
expansion and job creation over the next three years.
As you are aware, Tischlerei relocated from Osborne, KS to 43,600 SF of manufacturing space
leased from the Salina Airport Authority. Our new location is in a portion of a building formerly
occupied by Hawker Beechcraft. The cost of the relocation was in excess of $250,000 and
created nine (9) new jobs for Salina and Saline County.
Our relocation and move into building B655 at the Airport Industrial Center was aided by an
Airport Authority expenditure of $58,000 to build a new loading dock serving our leased space.
The relocation and start-up at the Airport Industrial Center was completed without the benefit of
an SEDIC grant.
In order to expand operations and hire more workers, Tischlerei does need an SEDIC grant to
help fund additional equipment to be installed. The dust collection system must be expanded and
the air make up equipment upgraded and improved before new hiring and increased production
can occur. The estimated cost of the equipment purchase and installation is $95,000.
After the dust collection and air make up systems are expanded, Tischlerei will be able to hire
another 25 employees at an average wage of $15.00 per hour. Total employment of 34 employees
is expected within 36 months after the new equipment is installed and operating.
An $84,000 SEDIC grant would fund 88% of the equipment upgrades need for our expansion.
Tischlerei will fund the remaining cost of the project cost.
Thank you for your consideration of our request.
Sincerely,
Olaf Gerhardt
President
Tischlerei — Fine Woodworking, LLC.
Salina Economic Development Incentives Council Minutes
November 20, 2012
City - County Building, Room 107B
2:00 p.m.
Members present: Jerry Fowler (presiding officer), Stephanie Klingzell Carlin, Dale Heuszel, and Jeff
Maes
Members absent: Mayor Jennings and Dan Mendicina
Others present: Jason Gage, City Manager, Tim Rogers, Salina Airport Authority, Rita Deister, County
Administrator, Dennis Lauver, Chamber of Commerce, and Lieu Ann Elsey, City Clerk
1. Call to Order and Roll Call
Jerry Fowler called the meeting to order at 2:00 p.m.
2. Approval of the August 2, 2012 minutes.
MOTION: Moved by Maes, seconded by Klingzell Carlin, to approve the minutes. Aye: (4). Nay: (0). Motion
carried.
3. Financial Report
Tim Rogers summarized the financial report and it was accepted by the Council.
4. Action Items
a. Request for executive session.
MOTION: Moved by Klingzell Carlin, seconded by Maes, to recess into an executive session until 2:15 p.m. to
discuss confidential data relating to financial affairs or trade secrets of a corporation for the reason
that public discussion of that information would unfairly disadvantage the business in relation to its
competitors. Aye: (4). Nay: (0). Motion carried.
b. Tischlerei Fine Woodworking grant recommendation.
Gage summarized the request, equipment purchase, and net jobs to be created.
A discussion followed between Gage and Klingzell Carlin regarding the overall number of jobs to
be created.
Gage and Rogers continued to explain the request for reimbursement, average job wages,
qualifications for the Kansas Peak Incentives and the cost analysis.
Olef Gerhardt (applicant) noted that they have committed to an overall increase of 25 jobs, but
could not wait on the funding prior to hiring.
Rogers further explained the building improvements, economic impact, increase of jobs, and the
proposed grant agreement.
Heuszel felt that it was important to define full time employment within the agreement. Gerhardt
and Rogers responded to Heuszel.
A discussion followed between Maes, Gage, Lauver, Gerhardt, and Rogers on the cost analysis,
proposed agreement, and available state incentives.
Gerhardt responded to Fowler's question on whether their business was still operating in
Osborne, Kansas. Gerhardt confirmed that they are not.
Discussions occurred between the Council members, Rogers, Gerhardt, and Gage regarding grant
start date, overall jobs to be created, process of applying for SEDIC funds, building
improvements, and the proposed agreement.
Maes expressed his concerns with the fund balance and whether there would be adequate funding
available for future projects. He also felt that the improvements that have been made would need
to stay with the building if the business was to relocate. Maes supported funding the request, but
not the entire amount requested.
A discussion followed between the Council, Gage, Lauver, and Gerhardt regarding previous
SEDIC grant awards given, immediate economic impact, number of jobs created through the
requests funded, and the building improvements.
MOTION: Moved by Maes to recommend award of $45,000 and direct the Salina Airport Authority to add a
clause to their lease agreement with Tischlerei — Fine Woodworking, LLC that the dust collection
system remains in the building and the City to modify the agreement to include a full time
employment definition. Maes withdrew the motion.
MOTION: Moved by Maes, seconded by Heuszel, to recommend to the City Commission the award of $45,000
and to modify the proposed agreement to include full time employment to 280 hours.
Klingzell Carlin questioned whether discussion between the governing bodies and the applicant
occurred prior to the SEDIC consideration. Rogers and Gerhardt also responded to her questions
regarding the building improvements.
A discussion followed between Heuszel, Lauver, Gage, Rogers, and Klingzell Carlin regarding
applying specific standards (number of jobs, hourly wages, analysis ratio, etc) when reviewing
requests.
Fowler called the question. Aye: (3). Nay: (1) Klingzell Carlin. Motion carried.
5. Other Business
None
6. Adjournment.
Meeting adjourned at 3:12 p.m.
RESOLUTION NUMBER 12 -6947
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN
ECONOMIC DEVELOPMENT GRANT OFFER AND AGREEMENT WITH TISCHLEREI-
FINE WOODWORKING LLC.
a
w
II BE IT RESOLVED by the Governing Body of the City of Salina, Kansas:
N
H II Section 1. That the City Manager is hereby authorized to execute an Economic Development
0
U II Grand Offer and Agreement with Tischlerei — Fine Woodworking LLC for reimbursement for project
equipment purchased in order to accelerate commencement of business operations, resulting in the
addition of 25 new jobs over the next 36 months, in an amount not to exceed $ 45,000, subject to the
terms and conditions of the agreement.
Section 2. That the City Clerk is hereby directed to file the original agreement and retain
according to the City of Salina Records Management Policy.
Section 3. That this resolution shall be in full force and effect from and after its adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 26'b da fNovember, 2012
Norman M. Jennings, Mayor
(SEAL)
ATTEST:
Lieu Ann Elsey, CMC, Ci Clerk