JSDC waives requirement

The Jamestown/Stutsman Development Corp. Board approved waiving the benchmark requirement on its job incentive grants until Dec. 31, as most local manufacturing businesses are not meeting job numbers due to a shaky economy.

As part of their agreement to receive JSDC funding, each business had employment benchmarks to meet. The agreement included a clawback, or requirement, that if the business didn’t hire a specified number of employees by a certain date, the grant would become a loan and the JSDC would have to be paid back. However, Lisa Hicks, JSDC administrative program coordinator who did the job compliance check, said seven area manufacturing companies can’t meet their numbers. In all, the companies are short a promised 229 employees.

“No one is delinquent on their loans,” Hicks said. “But it would be a substantial amount of money they would have to pay back if we don’t waive this.”

Hicks said she recently talked to Lori Gabriel at the Bank of North Dakota and was told the bank is waiving all of its PACE low-interest loan counts until the end of the year. The JSDC Board had already waived the job count requirement until June 30. The Bank of North Dakota decision prompted another look at the job situation here to see if the waiver should be extended.

The seven local companies not meeting their employment numbers are Precision Results, DuraTech, Champ Industries, Agri-Cover, Realtruck, Goodrich and Dakota Brands. All of them operate nationally and most internationally. The amount owed to JSDC depends on how much funding the business received and how many employees the company planned to have by this time.

Of all the companies, Goodrich is short the most employees — 139.

JSDC Board member Duane Enzminger asked what the negative is for the JSDC. Ken Schulz, city councilman and JSDC Board member, said other companies that are meeting their quotas could complain.

“They could say, ‘what about me?’” Schulz said. “But we’re not forgiving the debt, we’re just giving them a little breathing room.”

Enzminger noted that by not providing this waiver, it could hurt companies struggling to stay afloat in the present economy.

“We’re just following the lead of the Bank of North Dakota,” said JSDC Board member Dick Geigle. “They owe us and the Bank of North Dakota money, but we can’t put pressure on them when the companies are struggling. I hope the Bank of North Dakota comes up with a formula to work this out.”

The JSDC is actively pursuing a couple of new companies to set up business in the Jamestown area. A couple of possibilities appear to be a good fit for the community, CEO Connie Ova said. Schulz noted the waiver might reassure a new business about moving here.

“This could be a positive — the JSDC could be seen as flexible, not rigid,” Schulz said. “If anything this is a plus.”

Browning Honey, which struggled economically after a disease killed off 35 percent of its bees, is rebounding, Hicks said. The company now employs two more than the promised number of employees.

The JSDC Board voted unanimously to waive the job counts until Dec. 31.

In other business, the JSDC Board:

* approved going back to direct mail as part of a marketing plan. Geigle said direct mail was the way to reach distributors and suppliers. Funding for it is included in the 2011 budget.

* received an update on the Dakota Spirit Ag Energy biorefinery plans and meetings from Ova. She said she had no cost estimate for JSDC involvement as none had been asked for.

* heard an update on exploration of the potential for a commercial greenhouse in the Spiritwood Energy Park.

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tonip@jamestownsun.com