2018 RDA Annual Report

ABOUT US

The Regional Development Association of East Central Kansas (RDA) is the lead economic development organization for Lyon County and the Emporia area. It is a collaborative effort of the Emporia Area Chamber of Commerce and Visitors Bureau, Emporia Enterprises, the City of Emporia, Lyon County, Flint Hills Technical College, Emporia State University and Emporia Main Street. The RDA is located in the Trusler Business Center with the Emporia Area Chamber of Commerce and Visitors Bureau, 719 Commercial Street, Emporia, Kansas 66801. RDA President Kent Heermann may be contacted at 620-342-1600 or kheermann@emporiarda.org. For further information go to www.emporiarda.org.

Board Member At Large, Mel Scheller has reached his term limitation on the Board of Directors. We thank him for his service.

RDA BOARD OF DIRECTORS 2018

Voting Members
Rob Gilligan, City of Emporia Representative
Jim Kessler, City of Emporia Representative
Mel Scheller, At Large Representative
Jim Shepherd, Emporia Chamber of Commerce Representative
Dan Slater, Lyon County Representative
Rick Tidwell, Emporia Enterprises Representative
Pat Wiederholt, Lyon County Representative

Ex-officio Members
Allison Garrett, President, Emporia State University
Marc Goodman, County Attorney, Lyon County
Dean Hollenbeck, President, Flint Hills Technical College
Mark McAnarney, City Manager
Jeanine McKenna, President Emporia Area Chamber of Commerce
Christina Montgomery, City Attorney, City of Emporia,
Casey Woods, Main Street Director

Officers and RDA Staff
Rob Gilligan, Chair
Jim Kessler, Vice Chair
Jeanine McKenna, Secretary
Mark McAnarney, Treasurer
Kent Heermann, President CEcD
Robin Nelson, Executive Assistant

EXECUTIVE SUMMARY

The Emporia RDA celebrated its 25th anniversary on July 1, 2018. In November 2018, the Celebrating 25 Years of Service publication commemorating the accomplishments was distributed throughout the Emporia community. The digital version was posted on LinkedIn, Facebook, Twitter, and at https://issuu.com/emporiagazette/docs/rda_2018

Construction of Simmons Pet Food, Cargill, Bunge, and a water main began in late 2017 and will continue into 2019 and beyond.

The City of Emporia, with the Emporia RDA worked diligently from August 2017 to the summer of 2018 on an EDA infrastructure grant, and a Kansas Department of Transportation (KDOT) paving grant. The EDA grant was $1,341,000 and the KDOT grant is estimated to be $1,492,000.

The RDA participated with the Digital Sandbox KC in their i6 EDA grant funding application.

Job growth and demands continue with an unemployment rate in October 2018 of 2.9%. This unemployment rate is probably the lowest it’s been since the 1970’s.

RETURN ON INVESTMENT

Over the past six years (2012 to 2018), Hostess Brands/Dolly Madison closed in November 2012, which eliminated 543 jobs in Emporia. In April 2013, the new Hostess Brands was created and the bakery reopened. Of the top twelve private companies which include Tyson Foods, Hostess Brands, Simmons Pet Food, Hopkins Manufacturing Corporation, EVCO, CAMSO, Detroit Reman, Hill’s Pet Nutrition, Norfolk Iron & Metal, Birch Communications, VEKTEK, and Better Life Technologies, in 2013 there were 2,804 employees, which increased by 991 employees to 3,338 employees in 2018.

In the past six years nearly 554,500 square feet of new buildings have been constructed at a value of nearly $214,000,000.

Year to date totals are tabulated from the beginning of the sales tax in 1993. The year to date total capital investment $972,689,000 with the construction of over 2,616,668 sq. ft. in buildings and the creation of over 2,100 new full-time jobs. Since 2013, nine hundred ninety one (991) of those 2,100 jobs have been created.

The following table depicts the growth in employment of our top twelve private sector employers with 100 or more employees.

Top Private Sector Employers
In the City of Emporia with 100 or more Employees
Job Growth January 1, 2013 to 2018

							Variance from
COMPANY	2013	2014	2015	2016	2017	2018	2013-2018
Tyson Fresh Meats	950	950	964	914	914	934	-16
Hostess Brands	0	412	535	535	5577	557	557
Simmon Pet Food	315	317	360	420	460	627	312
Hopkins Manufacturing Corp.	214	221	240	244	252	232	18
EVCO Wholesale Food Corp.	149	140	127	127	132	122	-27
CAMSO	120	110	139	141	141	170	50
Detroit Reman	117	121	126	132	133	125	8
Hill's Pet Nutrition	111	123	128	125	128	122	11
Norfolk Iron & Metal	120	144	161	164	151	147	27
Birch Communications	85	102	226	246	138	134	49
VEKTEK, Inc.	91	88	102	110	105	110	19
Better Life Technologies	75	75	123	118	118	58	-17
TOTAL	2,347	2,803	3,231	3,276	3,249	3,338	991

Note: Hostess Brands closed and liquidated in November 2012. The assets were purchased on April 8, 2013. The new owners opened the plant in April 2013.

SIMMONS PET FOOD EXPANSION

On November 1st 2017 Simmons Pet Food announced their expansion project. The construction of a new 200,000 sq. ft. manufacturing facility north of their west facility on Warren Way. Simmons also added 125,000 sq. ft. of warehouse space on their east building, and renovated the west building into the Simmons Pet Food Medical Clinic. Refer to the Appendix Figures 1 through 5 for the progress photos.

To date, the warehouse addition, and clinic construction has been completed. The new building will be complete in December 2018. All three projects had a significant economic impact locally by utilizing local contractors. BlueScope Construction constructed the building and installed the pre-cast concrete panels. Evergreen Design Build assisted BlueScope on the building interior, and office finishes. The new building will be producing products in the first quarter 2019.

The total capital investment in this expansion has increased to over $50 million with additional equipment and building modifications. Simmons employment is well over 600 employees. The new building will be exclusively for wet pet food cups, tubs, and pouch packaging, which will allow for more wet pet food can production volume.

BUNGE RAIL SPUR EXPANSION

Bunge has acquired land adjacent to and on the north side of the Burlington Northern Santa Fe (BNSF) railroad main line and the BNSF Emporia to Topeka line for a rail spur to better serve the rail tanker car capacity at their plant. Construction on the rail spur will be beginning as weather permits, to be completed in 2019.

BIRCH COMMUNICATIONS PURCHASED BY FUSION

Fusion, a publicly traded company (NASDAQ: FSNN) completed the acquisition of Birch Communications and the Emporia Birch facility in early May 2018. This acquisition could stabilize and create additional job growth in Emporia.

CARGILL PET FOOD

On May 2, 2018 the Incentive Compliance Agreement was signed with Cargill, and the City of Emporia for their 50,500 sq. ft. warehouse project – a $4 million project. The project will add 10 jobs over the next 18 to 24 months.

In 2016 Cargill installed $5 million of production equipment in their facility with the addition of 19 new full-time jobs.

The warehouse addition is being constructed by Evergreen Design Builders with a completion date of first quarter 2019.

CAMSO

The Lenze building, located northwest of the intersection of East Logan Avenue and Weaver Street, has been leased by CAMSO. They have been utilizing the space for a research & development project, which was announced this year. CAMSO is remanufacturing, or retreading the agriculture off-road rubber tracks. The “recap” or retreaded tracks are 40% less than a new track, thus appealing to the argic-producing at a low commodity price environment.

On July 12, 2018 Michelin, based in Clermont-Ferrand, France announced the purchase of the Magog, Quebec-based off-road tire and rubber track producer and continue their over-the-road (OTR) tire division based in Canada. The $1.45 billion acquisition should be completed in late 2018 or early 2019.

RENEWABLE ENERGY GROUP (REG)

The Incentive Compliance Agreement (ICA) between the City of Emporia and REG expires on December 31, 2018. At the December 5, 2018 Emporia City Commission meeting, a revised ICA was renewed. The highlights of the agreement are:

• The term is five (5) years expiring on December 31, 2023.
• The bio-diesel plant must be completed and operational prior to the deadline, and
• If the project is not complete, then REG will removed the structures above the ground with the exception of a metal storage building; and then transfer the real estate to Emporia Enterprises.

On December 6, 2018 REG announced that Cynthia (C.J.) Warner will be the company President/CEO effective January 14, 2019. She succeeds Randy Johnson who served as interim President/CEO after Dan Oh resigned in July 2016.

CLOSURES

In July 2015, H.J. Baker & Brothers announced an expansion project in Emporia. The project was delayed indefinitely in the second quarter 2016. In the first quarter 2018, the City of Emporia and H.J. Baker & Brothers terminated the Incentive Compliance Agreement.

Kansa Technology ceased operations in August 2018.

GRANTS – FEDERAL, STATE & LOCAL

U.S. Department of Commerce EDA Infrastructure Grant
August 2017 the RDA staff, City staff, BG Consulting, and environmental consultants submitted the pre-grant application. We were invited to submit a grant application. In late November supporting documentation was submitted before the end of January 2018.

On April 11, 2018 we were informed by the U.S. Department of Commerce – EDA, the award of a $1,341,000 EDA Infrastructure Grant. The City of Emporia will be matching the $1.3 million grant for the water tower construction, plus the additional engineering expense.

Many water main improvement projects related to the Simmons project to increase the water volume, capacity, and pressure in Southeast Emporia have been ongoing in 2018. Those projects should be complete by the end of the year. The million gallon water tower project should begin construction in 2018, and is scheduled to be completed within 12 to 16 months.

Kansas Department of Transportation (KDOT) Access Grant
On June 1, 2018, in a collaborative effort between the RDA, and city staff, an Access Management Construction Reimbursement grant was submitted for the paving improvements and traffic control of Road F from U.S. Highway 50 to Road 180.

On June 14, 2018 the Kansas Department of Transportation (KDOT) informed us that the construction funding had tentatively been approved for fiscal years 2020-2022.

The total estimated project cost is $1,760,000 with the state’s share being $1,492,000 and the local match being $268,000. The City Engineering Department will design the project in house which is $224,000 of the local match. The accrual local cash would be for right-of-way acquisition and infrastructure relocation costs.

Digital Sandbox KC
Digital Sandbox KC approached the RDA in August 2018 requesting matching funding of $100,000 over a three-year period (2019-2021) for an i6 EDA grant to provide grants to qualified entrepreneurs who need funding for proof-of-concept or commercialization for a business venture with job creation that is scalable in a regional or national market.

The grant application was submitted in late August by the KC Digital Sandbox. The $100,000 local match would be matched by $750,000 from the EDA if awarded. Several KC metro area communities submitted the $650,000 local match.

On December 4th, we received notification that the i6 EDA grant request by Digital Sandbox KC had not been approved. The plan is to reapply for the next round of i6 EDA fund deadline, or February 1, 2019 or pursue other funding sources in the Kansas City metro area.

The RDA submitted a grant request on November 1st to the Emporia Community Foundation, Trusler Foundation requesting funding for a three-year time period. We received notification from the Emporia Community Foundation they did not approve funding at this time. They requested more information and strongly encouraged reapplication on April 1, 2019.

EMPORIA RDA WEBSITE

The past year, the RDA website had a major upgrade. We are utilizing the LocationONE/LOIS website to list all of the available commercial and industrial buildings and sites. The LOIS system is owned and managed by Great Plain Energy, which owns and operates Kansas City Power & Light (KCPL) who merged with Westar Energy.

The new merged company, Evergy, has combined business development and economic development divisions of both Westar and KCPL, they will be more proactive than in the past.

At a recent IDEC annual meeting in Atlanta, I met with economic development professionals from KCPL. We are researching our existing owned and option sites for electric service capacity of those sites.

Evergy hosted a meeting in Wichita on November 13th highlighting the various economic development assistance and funding available for site/product development.

APPLIED MARKETING

The 2018 contract will be complete at the end of the year. This year’s contract focused through LinkedIn. Based on the activity report for November 2018, Applied Marketing developed 385 Smart Leads, from those leads, 381 companies were contacted through LinkedIn.

Over 145 companies connected to the RDA President’s LinkedIn account, over 1098 individuals of the 381 companies were contacted by email message through LinkedIn. The goal of seven conference calls/meetings was exceeded with a total of 13 conferences calls with the RDA President.

EUROPEAN AMERICAN INVESTMENT COUNCIL

The RDA joined the European American Investment Council (EAIC) as a community partner in 2017. The EAIC is organized to connect Foreign Direct Investment (FDI) from European nations into the United States. The RDA has partnered with EAIC on their domestic (USA) market efforts, some of the events are 2018 SelectUSA in Washington, DC, meeting with actual company representatives during the event. Emporia has an active lead, which may make an expansion in the U.S. in two to three years.

Over the past year, we have received three leads on European companies seeking locations for their U.S. operations. One of those projects is still considering Emporia.

In October is the annual EAIC meeting in Fort Wayne, IN, in conjunction with a European automotive delegation that will be visiting the U.S.

The newly named U.S.-Mexico-Canada trade agreement (USMCA), formerly NAFTA, was signed on October 1, 2018. The agreement was ratified by all three countries, goes into effect by 2020. According to our EAIC partner, several changes to the agreement would encourage more FDI from automotive supplier companies from Germany.

EAIC will be rebranding itself as Transatlantic Business Investment Council (TBIC) in 2019.

TEAM KANSAS/KANSAS DEPARTMENT OF COMMERCE

We continue to support Team Kansas marketing efforts and participate in the Kansas Department of Commerce (KDOC) events. We generally participate in four events per year.

The KDOC has added a business consultant in the Chicago area, who works with businesses located in the Midwest, and an East Coast representative is now in place.

KDOC prospect leads continue to be received. Generally, projects search for existing buildings first, then consider green-field sites/new construction.

In 2018, we received eighteen leads from the Kansas Department of Commerce (KDOC), two leads from Kansas City Area Development Council (KCADC), three from European American Investment Council (EAIC), and one carry-over lead from the RDA. Five of those leads are still active, two from KDOC, one from KCADC, one from EAIC, and one from the RDA. The RDA President made an out of state company visit.

This year leads are two less than last year. The majority of the leads were searching for existing buildings much larger than available buildings in Emporia.

With the new Governor taking office in January 2019, we believe that Governor-elect Kelly will appoint a Secretary of the Kansas Department of Commerce (KDOC) in the first quarter 2019.

The KDOC Business Recruitment Team now has 4 ½ employees, increased by two from the beginning of the year.

OPPORTUNITY ZONE

In late 2017 federal tax legislation was approved with the provision for Opportunity Zones in qualifying low income and poverty census tracts.

In February, the RDA was contacted by the Governor’s office suggesting that Emporia apply for the Opportunity Zone designation. The RDA submitted two qualifying City of Emporia census tracts to be considered for designation.

We were contacted by Governor Colyer’s office indicating that Emporia could have one census tract designated as an Opportunity Zone. The census tract in southeast Emporia was submitted and approved by the Governor in mid-April. The census tract is generally that area south of the intersection of 6th Avenue and Neosho Street. The designated census tract map located in Appendix Figure 8.

EMPORIA ENTERPRISES

Emporia Enterprises is the land management and development entity for our large tract industrial/business park sites.

With the Simmons Pet Food expansion project announced on November 1, 2017 and Cargill Pet Food expansion in April 2017, 45 acres of land in Park III were transferred to Simmons Pet Food as per the Incentive Compliance Agreement, and 5.8 acres were transferred to Cargill as per the Incentive Compliance Agreement.

The land inventory was reduced by 50 acres in 2018. The amount of industrial real estate under control is approximately 179 acres.

Industrial Park III has two 8 acre lots and one 15 acre lot available for development. These three lots have all utilities and paved access. They are smaller than the typical project requests.

Park IV has 148 acres with a 100 acre tract, a 26 acre tract, and a 22 acre tract. These tracts are not totally ready for development. This past summer, with the cooperation of the City of Emporia staff, a Kansas Department of Transportation grant to fund the construction of Road F from Highway 50 north to Road 180 was applied for. The project design may start in 2019 with construction as early as 2020.

Emporia Enterprises continues to seek future sites for future business and industrial parcels. We ae working with existing landowners in securing firm purchase prices on real estate in the event an existing or new business is considering a site.