The Stillwater City Council — with a 3-2 vote — on Tuesday approved a proposal giving Vista Technologies a $250,000 forgivable TIF loan to relocate to the former UFE site on Greeley Street.
“This is exciting,” Stillwater Mayor said of the months-long process of coaxing the high-quality manufacturing firm to relocate to Stillwater.
Vista Tek was established in 1996 and currently located in Vadnais Heights.
“We believe it’s a good fit for the city,” Community Development Director Bill Turnblad said. “It’s a building that has been vacant for five years. It’s a good location, it’s a good building and we would like to see it productive again. We think this is a fair offer.”
The TIF funds would be used for down payment, renovations and to help offset the cost of moving the business, Managing Director of Vista Tek Dan Mishek said.
Council members Tom Weidner and Ted Kozlowski wished Vista Tek well, but said they didn’t have enough quantifiable information showing a benefit to the city to vote in favor of the forgivable loan.
The value is in improvements to the building, future expansion, bringing high-paying salaries and clientele into the city, Turnblad said. In order for the deal to happen, the current property owner has to complete a $1 million environmental clean-up project.
“I think you’ll see a real impact,” Turnblad said.
An analysis done by the city states that each job would bring about $8,240 into the community annually, City Attorney Dave Magnuson said.
The loan is tied to job creation, in part Turnblad explained because that is what manufacturing is all about, and it is one criteria for use of TIF financing.
By July 1, 2013 VistaTek expects to employ the equivalent of 28 full-time positions; by July 1, 2014 this would increase to 35 full-time equivalent jobs.
Beginning Jan. 1, 2015, and for each subsequent year until 2019, VistaTek will report the number of employees to the city. If a level of 35 full-time positions is maintained, no payment to the city will be required. If the number of employees falls below the minimum, Vista Tek will be responsible to repay a pro-rated portion of that year's $50,000 TIF loan value.
The movement of manufacturing jobs back to the United States is called reshoring, Mishek said.
“We have six open positions right now,” he said. “We’d have 31 people on staff today, if we could find the talent. Manufacturing is alive and well, we have to kind of make it sexy again — and this is our way of doing that.”
The employment numbers tied to the loan are on the low side of what can be expected of Vista Tek, Mishek said.
“My goal is to have 50, 60, 70, 100 employees,” he said. “That’s the goal of doing this — and this is the prefect building to do that. It was made for making plastic parts.”
Mishek said he hopes to close on the deal in April and be moved into the space by July.
“This is interesting. It was maybe a year ago when 834 was looking at the property, it was said, you know, manufacturing is dead—and you might as well face it, that will never come back to Stillwater,” Harycki said. “Here we are a year and a half later and there’s a perfect fit coming in—in the form of Vista Tek.”
Sometimes things seem fortunate, Turnblad quipped.
“All economic development for cities comes with risk,” City Administrator Larry Hansen said. “You either accept that risk or you don’t. We have tried to minimize that risk by tying the loan to a mortgage and a personnel guarantee. It comes with risk, but we’re trying to bring a new, stable company to town. These people don’t want to fail. We hope, as is always the hope with economic development, that we bring in a company and they do what they say they were going to do, and then they do much more.”
Weidner said he understands the risks and rewards, but questions the proposal in an attempt to “flesh it out.”
“What was in this packet doesn’t have the numbers Mr. Magnuson is talking about,” Weidner said. “I understand there is a risk in business and a risk with economic development, but there are a lot of soft answers to the benefits to this community. My question is, can you quantify it? Without those numbers, I can't justify voting for this.
“I’d love to have this business here,” Weidner continued, “But it is my duty to the public to ask these questions.”