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HomeMy WebLinkAboutCity Council Committees - Economic Development Corporation - 05/07/1987 (3) CITY OF KENT ECONOMIC DEVELOPMENT CORPORATION May 7, 1987 The regular meeting of the Economic Development Corporation was called to order at 7:30 a.m., by Chairman of the Board Berne Biteman, at the Kent Business Development Center (Venture Center) . Present: BOARD MEMBERS: Berne Biteman, Chairman Tom Bailey, Vice Chairman Steve Dowell, Board Member Walt Ramsey, Board Member Ted Knapp,Board Member OFFICERS: Marie Jensen, Secretary of the Board Sandra Driscoll , General Counsel Also Present: Brent McFall, City Administrator Clarence Smith, President, Kent Business Development Center Anthony Retford, General Manager of Kent Business Development Center MINUTES Ramsey moved to approve the minutes of the regular meeting of April 16, 1987. • Dowell seconded and the motion carried. TAX REFORM ACT Driscoll distributed a report from Roberts & Shefelman, entitled: The Future of Small Issue Private Activity Bonds for "Manufacturing Facilities," and her own report entitled: Statutory Authority of Economic Development Corporation and Effect of 1986 Tax Reform Act on Issuance of Industrial Development Bonds. Driscoll explained that her memo summarized the Reform Act as it affects this corporation. McFall noted that this would be more fully discussed at the next regular meeting after all had had the opportunity to peruse the information. KENT BUSINESS DEVELOPMENT CENTER - VENTURE CENTER Anthony Retford distributed a breakdown of the $10,000 grant from the EDC showing the expenditures for furniture and computer equipment. Clarence Smith distributed a description of the Development Center which will be used as a prospectus for fund-raising activities. He noted that the Center would require $125,000 over the next eighteen months, and that it was expected that in five years, the Center would be in a "break-even" position. He described the buildings under construction noting that options have been taken by several businesses. Green River Community College, the Employment Security Division and the Chamber of Commerce will be housed in the front building. About. $50,000 will be needed in order to make the other buildings ready for • clients. A professional film will be prepared to be used to tell about the Center and to raise funds. Services for clients such as reception, phones, clerical , and mail services will be supplied. Smith described the "business-to-business" plan of support noting that, support totaling $5,400 had been received from 182 local businesses. Publicity will be given to these businesses. Fund-raising plans include suggesting contributions from 300 businesses at $2.50 per employee. The Boeing Company will not provide money but will provide printing services in lieu of cash, and will consider providing a computer. Smith noted that the EDC' s $10,000 contribution was much appreciated, and that continued support would be needed. Major firms have been contacted and some will provide funds for this venture in their 1988 budgets. Short-term funding is therefore needed. The Private Industry Council , whose initial $50,000 started this program, has had some decrease in funding and may not be able to contribute as much as in the past. "In-kind" services have included work by GRCC students who installed sheetrock. Building materials are needed and Weyerhaeuser Corporation may be willing to contribute materials. Pay N Pak has already contributed, and Bailey suggested that the Home Club should be contacted. Smith noted that Weyerhaeuser is considering becoming an "anchor" tenant. At McFall 's request, Smith explained that this program was not for everyone. The service of this group is to advise prospective tenants as to whether their business proposal is viable. If approved by the Tenant Sglection Committee and then by the Board, the tenant is provided assistance in securing financial backing for the new venture. It is expected that tenants will not stay longer • than three years, some may only stay eighteen months. He noted that services provided would differ with each tenant and that the Center may become involved from the start, when the entrepreneur is in the first stage of planning. He noted that the Board would meet with local realtors, accountants, etc. to gain information so as to be able to help small businesses which are in trouble. It was noted that the Center would house offices as well as manufacturing or light assembly operations and provisions are made to have noisy operations grouped together in one building. The layouts for the buildings were shown, showing that tenants have various space requirements. It is expected that a janitorial service will be one of the first tenants. Retford noted that an incubator program is a growing process. It was pointed out that the incubator programs have been receiving good press coverage. Smith stated that the Board was now making a formal request for $10,000-$15,000 which was needed immediately to bridge the gap until other promised funds are forthcoming. The bank will issue a line of credit if the Center can show that the matching funds are available. McFall suggested that this be discussed at the next EDC meeting, after the reports distributed today had been studied. It was pointed out that the Center meeting room was available for EDC meetings as part of our agreement. Arrangements could be made for other groups to use these facilities for meetings. Biteman suggested that the EDC could be used as a resource for unusual needs, such as funds to bridge the financial gap for the Center. Ramsey and Bailey suggested that the Corporation should first • have a brainstorming session and then set the goals and objectives. Bailey noted that a loan with a repayment schedule could be considered. - 2 - The meeting adjourned at 8:40 a.m. and a tour of the site was then conducted. NEXT MEETING The next meeting will be held on Thursday, June 4, 1987, at 7:30 a.m. in the Kent City Hall, on the second floor. Mar e- ensen Secretary • 24C-lC - 3 - Kent Business Development Center RECEIVED Post Office Box 301 Kent, Washington 98032 MAC j {q Telephone 2061854-8744 'ITy ADMINIR00"" May 12, 1987 , Board of Directors Economic Development Corporation c/o Brent McFall City Hall 220 4th. Ave. S. Kent, WA 98032 Dear Members of the Board: The State of Washington Commission for Vocational Education has notified me that it will grant $10 ,000 to the Kent Business Development Center Foundation effective the first part of June, 1987 , contingent upon confirmed matching support. On behalf of the Board of Directors of the Kent Business Development Center Foundation I request matching support from your corporation at your earliest possible convenience. As the CVE requires • prior matching support, your consideration of our request needs to occur before the end of this month. As I stated during your last meeting, this is a critical time for the incubator. While indications of long-term funding are positive, the incubator faces a short-term need over the next three months of $25,000. With our Business to Business Plan and a contribution from REI , Inc. , we have raised $5, 000, and with your help and the CVE funding the incubator will be able to pursue its purpose. I have attached a summary budget detailing our use of the $25,000. Members of our Board are available to appear before you if more explanation is necessary. Thank you for your interest in and support of this important contributor to the economic development of our community. Yours sincerely, 6% arence 'Smmi�N/h4 President KENT BUSINESS DEVELOPMENT CENTER FOUNDATION SUMMARY BUDGET June through August, 1987 JUNE JULY AUGUST TOTAL ---- ---- ------ ----- REVENUE: Tenant rental $ 300 $ 480 $ 660 $ 11440 --- --- --- ----- OPERATING EXPENSES: Facility expenses $ 775 $ 775 $ 775 $ 2,325 Tenant services expenses 350 350 350 1 ,050 Salaries and wages 5 ,042 5,042 5,351 15, 435 Marketing expenses 200 350 350 900 Administrative expenses 547 580 11080 21207 ----- ----- ----- ------ Total operating expenses $ 6,914 $ 7,097 $ 7,906 $ 21,917 FACILITY IMPROVEMENTS : Construction materials $ 1 ,000 $ 800 $ 800 $ 21600 Contract labor 740 590 593 1 ,923 ----- ----- ----- ----- Total facility improvements $ 1 ,740 $ 1 ,390 $ 11393 $ 4,523 ----- ----- ----- ----- Revenue less expenses and facility improvements $ ( 8 ,354) $ ( 8,007) $ ( 8 ,639) $ (25,000) ----- ----- ----- ------ ----- ----- ----- ------