Approval of Grant Agreement and Acceptance of Grant Award:  Consideration of a Grant Agreement between the City of Flagstaff and the Arizona Department of Transportation (ADOT) for economic development purposes.

The Arizona Department of Transportation (ADOT) supports economic development through its Economic Strengths Projects Grant (ESP), the procurement process for which was managed through the Arizona Commerce Authority (ACA). Joy Cone Company ("Joy Cone"), the world's largest manufacturer of ice cream cones, intends to improve a rail spur bed which is located on City of Flagstaff property on Butler Avenue. Joy Cone has a license to use the City property. The City of Flagstaff applied on behalf of Joy Cone for $90,000.00 based upon a $10,000.00 match from Joy Cone. There is not cost to the City of Flagstaff. Acceptance of the grant will allow Joy Cone  to fortify the bed of the rail spur which will enhance its operations related to transloading raw materials from rail to truck to its Flagstaff facility in the Pulliam Business Park adjacent to the Flagstaff Pulliam Airport.  

The grant award is in the amount of $90,000 with a $10,000 dollar match requirement for a total estimated project cost of $100,000.  The cash match will be provided by Joy Cone Company. 

The grant was not budgeted for; however, we have identified FY2023-24 budget appropriation in in account number 052-07-213-0835-4-4290 to cover this grant.

There are no policy impacts.

Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan: Priority Based Budget Key Community Priorities and Objectives
Priority: Robust Resilient Economy
Objectives:

• Grow and strengthen a more robust, diverse, and resilient economy
• Enhance understanding between the development community, the City and Flagstaff residents

Carbon Neutrality Plan
EP-1: Accelerate the transformation to a low-carbon economy that minimizes emissions and spurs innovation.
EP-2: Support the adaptation efforts of local businesses as the climate changes and the economic landscape shifts.

No.

1. Accept the Economic Strengths grant award of $90,000.00 from the Arizona Department of Transportation for economic development purposes matched by $10,000.00 from Joy Cone Company to enhance the rail spur bed. Accepting the award will result in Joy Cone Company improving the rail spur bed which enhances its ability access raw materials needed for ice cream cone production.
2. Reject the Economic Strengths grant award.

The City of Flagstaff Economic Development Offices work to enhance the economy and to assist businesses to locate, to invest, and to grow in Flagstaff. The City of Flagstaff has worked with Joy Cone Company specifically since Joy Cone Company purchased property in Flagstaff in the early 2000's. The Arizona Commerce Authority (ACA), formerly known as the Arizona Department of Commerce, has also assisted the City of Flagstaff in their efforts to help grow Joy Cone Company. After completing all of their five anticipated phases of expansions, followed by a sixth one, Joy Cone Company is planning to expand again adding ~80,000 square feet of warehouse space for production purposes. 

Joy Cone Company uses a rail spur which is owned by the Burlington Northern Santa Fe (BNSF) Railroad and is located on City of Flagstaff property at Butler Avenue. There is an Industrial Track Agreement (ITA) between the BNSF and the City of Flagstaff from 2003 and then from 2011 when Joy Cone Company extended the spur to allow four rail cars to be stored for delivery of the raw materials. The ITA is supported by a license agreement between the City of Flagstaff and Joy Cone Company and by an approved consent letter from the BNSF to the City of Flagstaff allowing the third-party use of the rail to Joy Cone Company. Over the course of time and seasons, the rail bed has degraded negatively impacting the ability of Joy Cone Company to transload their material from rail to truck for transport to their facility in the Pulliam Business Park. City staff worked with Joy Cone Company to learn of their proposed course of action to rectify the problem. Staff then contacted the ACA to learn of any programs that could assist the effort. The ACA directed staff to ADOT's ESP grant. Staff applied and was the application was approved unanimously by the ACA and by the ADOT State Board of Transportation.

Acceptance of the award supports the retention and expansion of an employee-owned company that employs almost 200 individuals all at no cost to the City of Flagstaff.

There is no cost to the City of Flagstaff or additional obligation to receive the benefits of improvements to the rail on City of Flagstaff property.

This rail spur is one of the last remaining rail spurs in Flagstaff. Such assets are critical to the viability of the Flagstaff community as a place to do business.

This Economic Development activity supports the community directly by employing almost 200 people. This project supports Joy Cone Company in supports their continued investment in Flagstaff. There was no additional public outreach.