By Melissa Dunson
mdunson@joplinglobe.com
LAMAR, Mo. — On Monday, City Administrator Lynn Calton feared he was watching two years of negotiations to bring nearly 500 jobs to town go down the tubes.
Calton did not get his 8-0 vote from the Board of Aldermen, which was asked to approve tax increment financing and other economic incentives to bring Polymer-Wood Technologies to the O’Sullivan Industries building that was left vacant when that company closed earlier this year, putting 735 people out of work.
Instead, the board unanimously voted to table the motion until the developer, Structured Equity Advisors in Newport Beach, Calif., comes back with a proposal that does not require the city to put up $1.5 million in “seed money” until after the first phase of the project is complete. The California investment company plans to lease half the space in the plant to Polymer-Wood Technologies, a Dallas-based door manufacturer.
Calton said he feared the vote to table the measure, initiated by Alderman John Gilkey, would jeopardize the future of the deal.
“I don’t think the (board) knew what they did,” Calton said Tuesday. “They killed a deal that would have brought economic stability back to Lamar.”
$1.5 million
Gilkey said his major concern was that the deal required the city to put $1.5 million — 40 percent of its reserves — into the same tax increment financing fund that would be used to reimburse Structured Equity Advisors for improvements to the O’Sullivan building. The city also would have to agree to pledge $125,000 to pay half of the attorney fees associated with the sale of TIF bonds and the real-estate transaction.
Tax increment financing redirects a portion of new local tax revenues created by an economic development or redevelopment project to reduce the project’s costs. TIF project funds can take the form of either a bond issue paid back by increments or direct reimbursements to developers for approved costs.
Gilkey said Monday that he was concerned that the investment company would have access to the city’s money without any assurance that improvements would be made to the building, or that the door company would be successful.
“As the chairman of the public expenditures committee, I have a fiduciary responsibility to the taxpayers of Lamar,” Gilkey said. “I didn’t go into that meeting to nullify anything they were trying to do, but I wanted to see performance. They believe in their (business) plan, but I’ve known many businesses that did, and they didn’t all work.”
Evan Daniels, president and chief executive officer of Polymer-Wood, was visibly surprised by the vote Monday, and he declined to comment to the Globe after the meeting, saying, “It is not a good day to ask me questions.” He declined to comment again Tuesday.
Robert Duncan, a manager for Structured Equity Advisors, also was at the meeting and declined to comment. He would not provide contact information to the Globe.
Duncan said Monday that Structured Equity Advisors’ original plan includes buying 114 acres in Lamar, including the former O’Sullivan plant.
Total project costs are estimated at $215 million, according to a report from Lamar’s TIF Commission, including constructing several build-to-suit sites on the land. About $200 million of that would be paid by the investment firm and private investors, supplemented with TIF reimbursement of $14 million and $1.5 million given by the city.
The plan is estimated to create $58.6 million in net positive benefit for the affected taxing districts over a 23-year period by increasing the amount of taxable personal property.
Gilkey and another member of the board, Kent Harris, also raised questions about Daniels’ affiliation with another Texas door manufacturer, Trio Industries, that Calton acknowledged Monday has run into financial trouble.
Daniels said he left that company three years ago, selling his stock and resigning, but he didn’t provide any additional information about his role with Trio.
In response to questions, Daniels said Polymer-Wood is a new business that has never mass-manufactured a product before. And while Daniels said he has had conversations with representatives of the Ace and True Value companies, Polymer-Wood doesn’t have any current customers.
But the businesses and the city may not have to wait long to find out what happens.
Next meeting
A special meeting scheduled for 5 p.m. today brings an amended version of the TIF plan to the Board of Aldermen.
Calton would not go into detail about the new plan, but he said Gilkey and representatives from Polymer-Wood and Structured Equity Advisors have been involved. He said the investment company provides some degree of security to Lamar in the revised deal.
“I think both parties will be happy with this, but we won’t know until we vote,” Calton said.
Gilkey said he thinks the compromise might be something everyone can live with, but he said he isn’t assuming it will pass at today’s meeting.
“I think it will at least get a motion and a second,” he said. “I don’t know if it will pass. People keep forgetting that the council has to vote.”
‘They know’
“Of course, they know we need an employer. They know we are desperate for economic development.”
— John Gilkey, Lamar Board of Aldermen
