Paris Economic Development Corporation met Tuesday to discuss obtaining approval from the Paris City Council to use funds from PEDC reserves to finance the construction of a spec building at 2305 NW Loop 286 that it plans to use to court future industries.
Google maps shows the site at 2305 NW Loop 286 before the old structure was torn down. A bare concrete slab with sewage and eight-inch water line remains.
“When I went to our city council with regards to our 2016-17 budget, there was some consternation with the city council about the spec building and the process of what we went through,” PEDC Executive Director Michael Paris said.
“What we want to convey is, this building is being built for the creation of primary jobs. And that indicates if somebody were to (be interested in it for a) short term, we would go and pursue approval from the council. The City Council would be involved in that decision making process,” he said.
Paris asked the board to discuss how they wanted to move forward and explained that he needed the PEDC’s permission to take the issue to the council meeting Monday.
The corporation’s bylaws state that any spending over $400,000 must be taken to the city council for approval.
“So what I’m asking y’all to do is to go ahead and approve not only the bid, but also the other expenses related,” Paris said.
The PEDC plans to take the following items to the city council for a general discussion Monday:
- approval for the bid for $738,380 from Bobby Smallwood
- a construction contingency of $25,000
- a bid bond at $10,880
- builder’s risk insurance of $2,040
This puts the total at $776,300. This could be tweaked, Paris explained, depending on feedback from the council.
What if someone wants to buy it for less than we spent building it?
“We’d like to present two conditions to City Council,” Paris said.
If the building is ever proposed for sale, or if someone is interested in buying it, we would then come to City Council and ask for their approval in that selling process,” PEDC Executive Director Michael Paris said.
‘Comparing apples to apples’
“(Everything you read, it says) don’t expect anything quicker than three to five years,” PEDC Secretary and Treasurer Don Wilson said. “The other side of the coin is, if you’ve got 100 people that’s (bringing their business to) Texas this year, there’s 75 of them that will not even look at Paris, Texas. Period. We don’t even know about ’em. Because it says, do you have a building? No, we don’t.”
Michael Paris relayed to the ‘neighborly’ advice given to him by another regional economic development board, “We’re missing out on 75% of the prospects…that come to Texas,” who are looking for an existing building. Paris said he received the same advice from the Mount Pleasant Economic Development Corporation.
Sherman, Bonham, Mount Pleasant and Sulphur Springs all have vacant buildings to market, he said.
Wilson referenced an editorial which ran in the Longview News-Journal last month. It talks about the $750,000 spent by the Longview Economic Development Corporation to bring in a call center which promised to create 300 new jobs.
And to oranges
“It might sit there for three to five years. I’ve heard it said, ‘why don’t you take that $750,000 and offer a big, big deal to somebody to come around here?” Wilson said.
But, Wilson explained, we can’t offer any deals if no one’s looking in our direction.
“It’s trying to open the door to that other 75%,” he said.
Derrick Hughes agreed.
“As a board, what can we put together as a marketing package for the council?” Hughes then asked.
“How do you be more specific than saying: we’re never going to get 75% of the industries that are coming to Texas,” Wilson responded.
“We keep that line of communication wide open,” Paris urged the board to communicate with council members, explaining they would not ask the council for a vote on Monday.
Why aren’t we building it in the business park?
Paris explained that the current site at 2305 Loop 286 already has power to the property, sewer and eight inch water line to the slab, gravel, a 3,700 square foot metal building, whereas the business park is an empty lot.
To bring a lot at the business park to that level of readiness, the PEDC had previously estimated a cost of about $175,000 for those upgrades alone. The cost for the current plan at 2305 NW Loop comes out to about $28 per square foot, Paris said. If the PEDC were to build a building at the business park, he estimated the cost would be closer to $50 per square foot.
“So what we’re trying to figure out is this a good deal– comparing apples to apples,” Wilson said.
Wilson wanted the board to be clear about the difference between the two options.
“If we built a 20,000 square foot building out there (at the business park)–” Wilson began. “A shell just like we’re doing here– using the bids that we got in. You see that it was $411,000 for the slab and $280,000 for the building. So that’s a total of $691,000 for 20,000 square feet– not 38,000 square feet.”
“That’s only $40,000-$50,000 (less for the smaller building), and we’ve got double the square footage out of this (spec) building,” he said.
Why build a building that might not be what somebody wants?
“One of the concerns that was brought to my attention was that if someone want’s to build a new building, they’d want to get it the way they want it, and not an existing one,” Hughes said.
Hughes opined an existing building is easier to sell to an industry than a vacant lot.
Vice President John Brockman explained to Hughes that this would be their only building that is zoned for heavy industrial, adding that the building would be up to current height requirements.
“And we don’t finish the interior. It will just be the shell. So (the prospective business) can come in and basically offer a design to finish building it out for whatever will meet their needs,” Brockman said. Electrical work would be done at a later date.
“I keep hearing that 75%,” Ray Banks said.
“Of that 75%, what other stipulations do they have on there to include interstate highways or access to international airports,” he asked.
Wilson agreed to that point.
Banks said he didn’t want to mislead anyone with that number.
“At the end of the day, (even) if we’re missing out on 40%–” Paris started.
“Or 25%,” Wilson said.
PEDC President Richard Manning said Paris was missing out on opportunities.
Why is Turner (Industries) here today? Because we had a vacant building. Why is (J. Skinner Baking) here today? Because we had a vacant building,” Don Wilson said.
“(The money is) there, and I’d rather have it invested than laying in the bank drawing 1%,” Wilson said.
“We want to keep this asset, and use this asset as a leverage point in the creation of those jobs,” Paris said. “It adds a much more comprehensive marketing aspect to our community to highlight this building to other folks.”
Brockman voted to take the discussion to the City Council.
After the open discussion that takes place Monday, the PEDC plans to bring the issue back before the council for a vote in October.
The PEDC then went into executive session to deliberate on possible incentives for three businesses: Daisy Dairy, The Results Companies, and Project White Rock. After reconvening into open session, they announced that no action would be taken.
During the regular meeting the PEDC also:
- approved minutes from the meetings on Aug. 16 and 23
(Banks motioned, Hughes seconded; none opposed)
- approved August 2016 financials
(Brockman motioned, Banks seconded; none opposed)
- approved final budget amendments on 2015/16 budget
(Banks motioned, Hughes seconded; none opposed)
- discussed the Executive Director’s monthly report*
- Lamar Co. Chamber of Commerce announced Ken Higdon as their new ex-officio representative to PEDC