Business Incubator Impact Discussed

By PATSY STODDARD Editor

The Emery County Municipal Building Authority met in their regularly scheduled meeting on June 4 at 2 p.m. Those present were Commissioners Ira Hatch and Drew Sitterud. Board members Dennis Nelson, Sharon Jensen and Randy Jensen were also present.
The first item of business was the presentation of the Emery County Industrial Incubator Project survey. Welles Cannon from Cannon and Cannon, Inc., a professional management group, was on hand to make the presentation. He brought copies of the Impact Study of the Industrial Incubator for the board members. The purpose of the study was to determine feasibility of manufacturing at the incubator site. “We have looked at the building and it has a few problems. Most manufacturing takes place in large factories or complexes. Labor is cheap in other countries and it is difficult to compete. We need a unique feature in people or raw material. I have searched the country over and looked at various types of manufacturing and there is a report included in the study. We have to find a need or introduce something new.
“The building will need the plumbing repaired and will need the roof replaced. The gravel portion of floor will need to be replaced with concrete. The ceiling in one part of the building is only eight feet high. Most manufacturing operations would need a higher ceiling than that. The rooms on the side can be used for offices and storage. The building does need some work and we did not determine what the upgrades would cost.
“Of the 4,300 surveys sent out we received back 349. A number of the people who responded did not know what an incubator was because they responded that stores or a bowling alley be put there. I have given those surveys to the economic director here to look at these businesses that people want outside the incubator.
“Of those responding, a significant number, 93 percent wanted to remain in the county and those who said they are leaving would like to stay but needed a job to do so. We also broke down the respondents by town and Huntington had the largest percentage responding with 24 percent. Sixty-one percent of the respondents were women. Of those surveyed 39 percent said, yes they would like to own their own business. The largest majority of those returning surveys thought a machine shop or welding business would do well in the incubator,” said Cannon.
Cannon also pointed out that a number of the respondents said they were currently unemployed. Many had mechanical skills, many were in education with degrees and 24 people with master’s degrees responded and 10 with phds. “This is very favorable news,” he said.
“The incubator will help people get started. Fifty-seven percent of the people returning surveys said they would help to get the incubator going. Many of them had skills in business, bookkeeping, auto repair and heavy equipment operation. Twenty-one people had experience in business management.
“We are sensitive to not competing with a business already existing in the county,” said Cannon. “We looked for something with a lower capital requirement that could utilize the incubator services. These services include: Subsidized rent for the building, forgiveness or reduced property taxes during the incubator period, assistance by volunteers and reduced rate bookkeepers and accountants, engineering services by volunteers and reduced rate professionals, management professionals that will volunteer to sit on a board of directors or a management council, special consideration by lending institutions and governmental agencies to help place appropriate financing, training arrangements for qualified owners and employees, mentoring, suggested business plan is provided in the booklet by Incubator study consultants, technology for this project has been researched and will be available to the incubator business, marketing training and guidance can be provided by professionals within the county by volunteers for reduced rates,” explained Cannon.
Cannon went on to mention a company named ReSyk from Brigham City which recycles plastics. This plastic is made into wheels for garbage cans, etc. Stepping stones for gardens with grippers on the back are also manufactured. Cannon explained the beauty of the operation is that you don’t have to clean the plastic. This recycled plastic could include milk cartons, oil cartons, etc. The plastic is ground into 3/8″ chips which are heated and blended and then molded into the various products. The TC-350 Compounder is patented by ReSyk there is a royalty charge on the use of the machine after its purchase. Cannon mentioned another company that wants to look at the plastic to be used for frames for the furniture they build instead of wood because the plastic does not split. He said there are many possibilities for the products.
Cannon estimated a business of this type would need to remain in the incubator for seven years. The estimated total capital needs for the first year would be $700,000. This includes the equipment purchases, start-up expense and working capital. The jobs created by a business of this sort would be on the higher end of the pay scale. Machine operators would be $12-14 per hour. Managers-$5,000 per month, sales person, $3,000 per month with possible bonuses, secretary- $14 per hour.
Cannon explained that the jobs created would be 10 after one year, 28 after five years and 44 after 10 years. An operator will be selected by application from interested parties who based upon their experience, training, credit worthiness and strong desire will be reviewed by the Emery County Economic Development Council and a selection will be made from those who filed an application or by recruiting a qualified operator if one cannot be found locally.
Commissioner Sitterud instructed board members to review the information compiled by Cannon and be ready to discuss how to proceed at the next meeting. The board expressed their thanks and appreciation to Cannon for the job he did on the incubator survey.
The next item on the agenda was the ratification of the petition for annexation of property into the city of Castle Dale. It was approved. The next item was the ratification of the special construction agreement between Emery Telcom and Emery County. It was explained that this was needed to allow the telephone line to the public safety complex property to be installed.
The next item discussed was the connectivity to the public safety complex, Jeff Guymon explained the situation. For now the connection will be plugged in at the current jail facility and two wireless antenna bridges will be used to bring the connection to the new complex. This method could change in the future as conditions change. Concern was expressed over this plan after the current jail facility is vacated and they move into the new complex. The equipment will be checked on a regular basis.
Todd Kitchen, project manager for the safety complex was on hand with an update. He said, “We are still on schedule and the complex will be completed by July 1. There is still a lot of work to do. We are on budget for the jail basically as planned and everything is fitting. The courts building is moving along. We have finalized the drawings with the state courts in Salt Lake and that is a big thing. We are moving on the construction of the outer shell and working ahead of schedule, so there are no problems there.”
The next item on the agenda was the approval of the bills. Clerk Bruce Funk presented the bills. He said he still has questions on some of the charges from Sahara. Some of the truck charges were deducted from the public safety side and added to the court side of the project. Also charges for computer use and other items purchased for the computer were questioned by Funk. Commissioner Hatch said he would check with Sahara and clarify the items. Funk also said he needed detailed receipts from Sahara.
It was determined that all but the bills in question would be paid at this time. The next meeting of the Emery County Municipal Building Authority will be on July 2 at 2 p.m.