Consideration and Approval of an Agreement: 2013 Rural Economic Development Grant Agreement from the Arizona Commerce Authority to the City of Flagstaff providing for a $100,000 grant award for the expansion of Joy Cone Company.

Approval will enable the City of Flagstaff to accept funds from the Arizona Commerce Authority for business expansion purposes at the Joy Cone Company. The Joy Cone Company currently employs 125 people; provides health insurance coverage to all full-time employees and their dependents; and wages are above the County median wage.

The City will incur nominal costs in the form of administrative oversight of the grant.  Oversight of the grant will be performed by the Management Services Division and Economic Vitality Division staff. There is no cost allowance for City staff time in the grant.

Retain, expand, and diversify economic base.

No.

1) Approve the acceptance of the grant from the Arizona Commerce Authority to the City of Flagstaff for business expansion purposes in Flagstaff.

 
2)  Reject the award of grant from the Arizona Commerce Authority to the City of Flagstaff.

Joy Cone Company was originally founded as the George and Thomas Cone Company in 1918 and continues to be a family owned company to this day. Joy Cone Company acquired property at the Flagstaff Pulliam Airpark Business Center in 1996 to build their first phase. After several expansions, bringing their facility to over 200,000 square feet, Joy Cone Company is now the largest ice cream cone manufacturer in the world with total annual production exceeding two billion cones.

Currently, Joy Cone Company is experiencing growing demand that exceeds their current production capabilities. Joy Cone Company and the City of Flagstaff developed an application to the Rural Economic Development Grant Program offered by the Arizona Commerce Authority for the purpose of addressing increased production capabilities. The Arizona Commerce Authority notified the City of Flagstaff on December 11, 2012, that the project was selected to receive $100,000 for expansion purposes. The project will decommission an incinerator which is no longer necessary for operations and expand production capabilities, as well as allow for the hiring of five (5) new employees. Joy Cone Company will match the grant amount of $100,000 with $900,000 of Joy Cone Company funds.

This project expands business operations, increases low impact high-wage jobs and supports our base economy. This project supports environmental stewardship by decommissioning their old incinerator resulting in less energy being used for burning waste and reduced emissions related to the process. All the waste that was formerly processed through the incinerator will now be sold to other industries that are able to convert that food waste into commercial product.

The City of Flagstaff Business Retention and Expansion Office requested $100,000 from the Arizona Commerce Authority on behalf of Joy Cone Company for the project. Joy Cone Company will match the $100,000 grant funds with $900,000 resulting in a $1,000,000 project.

While there is no allowance for the oversight of the project for City staff, oversight is seen as minimal. Joy Cone Company will be required to report progress to the Arizona Commerce Authority through the City of Flagstaff. City staff will receive, review, and deliver reports to the Arizona Commerce Authority. As a reimbursement program, Joy Cone Company will invoice the City for expenditures. The City will confirm expenditures and then invoice the Arizona Commerce Authority.

The community derives great benefit from the continued presence and growth of a company that empowers employees, and compensates employees with a livable wage and health insurance coverage. Joy Cone Company also demonstrates environmental stewardship consistent with the values of this community by eliminating their use of an incinerator.

None required.

Approved by CC 02/05/2013 - EAB