10.E.
City Council Meeting - FINAL
- Meeting Date:
- 02/05/2013
- Submitted For:
- Stacey Brechler-Knaggs, Grants Manager
- From:
- John Saltonstall, Business Retention & Expansion Manager
Information
TITLE:
Consideration and Approval of an Agreement: Sub-Recipient Agreement with Joy Cone Company providing for Joy Cone to receive a $100,000 grant award from the Arizona Commerce Authority for the expansion of Joy Cone Company’s Flagstaff facility, subject to City oversight and contingent upon Joy Cone's compliance with the grant and related conditions.
RECOMMENDED ACTION:
Approve Sub-Recipient Agreement with Joy Cone Company, and authorize the Mayor to execute the required documents.
Policy Decision or Reason for Action:
The Sub-Recipient Agreement enables the City of Flagstaff to pass through Arizona Commerce Authority grant funding for economic development purposes to Joy Cone, while requiring Joy Cone to meet the grant conditions. The expansion is promised to assist in the creation of low impact, high wage manufacturing jobs. The Joy Cone project will also remove a source of emissions (an incinerator).
Financial Impact:
The City will incur nominal costs for administrative oversight. Oversight of the grant will be performed by the City Management Services Division and Economic Vitality Division staff. There is no cost allowance for staff time in the grant.
Connection to Council Goal:
Retain, expand, and diversify economic base.
The grant award supports the expansion of the local and regional economic base. The project funded by the grant will result in five (5) new jobs at Joy Cone Company. Joy Cone will be conributing approximately $900,000 towards the project cost, with total project cost of approximately $1,000,000.
This grant award also fosters environmental stewardship by reducing emissions through the decommissioning of an incinerator, and by contributing to industries that convert waste from the cone making process to commercially viable filler product for other industries.
The grant award supports the expansion of the local and regional economic base. The project funded by the grant will result in five (5) new jobs at Joy Cone Company. Joy Cone will be conributing approximately $900,000 towards the project cost, with total project cost of approximately $1,000,000.
This grant award also fosters environmental stewardship by reducing emissions through the decommissioning of an incinerator, and by contributing to industries that convert waste from the cone making process to commercially viable filler product for other industries.
Has There Been Previous Council Decision on This:
No.
Options and Alternatives:
1. Approve the Sub-Recipient Agreement between the City of Flagstaff and Joy Cone Company.
2. Reject the Sub-Recipient Agreement.
2. Reject the Sub-Recipient Agreement.
Background/History:
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.
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.
Key Considerations:
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 products.
Expanded Financial Considerations:
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.
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.
Community Benefits and Considerations:
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.
Community Involvement:
None required
Council Action:
Approved by CC 02/05/2013 - EAB