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Home My WebLink AboutR7- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: ROBERT E.BOTTS,Manager SUBJECT: SHOCKLEY ENGINEERING Office of Business Development &MANUFACTURING,INC. DATE: June 24, 1996 ------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On June 20, 1996,the Redevelopment Committee recommended approval of an Employment Linkage Program Agreement in an amount not to exceed$22,000 in accordance with the terms and conditions set forth in the staff report;further,that the Agency Administrator be authorized to execute an Owner Participation Agreement with Shockley Engineering and; all other implementing documentation. -------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) (Mayor and Common Council) MOTION: That the Community Development Commission and the Mayor and Common Council approve an Employment Linkage Program in an amount not to exceed$22,000, in accordance with the terms and conditions set forth in the staff report; further, that the Agency Administrator be authorized to execute an Owner Participation Agreement with Shockley Engineering and; all other implementing documentation. /�- L Administrator ROBERT E.BOTTS,Manager Office of Business Development -------------------------------------------------------------------------------------------------- Contact Person(s): Robert E. Botts/Doris A.Daniels Phone: 384-5081 Project Area(s): Southeast Industrial Park Ward(s): First (1st) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $ 22.000 Source: C.D.B.G. funds Budget Authority: -------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------------------- SHOCKLEY.CDC(REB/dle) COMMISSION MEETING AGENDA MEETING DATE: July 1,1996 17"57 Agenda Item Number: ) ::) / ECONOMIC DEVELOPMENT AGENCY 0 OF THE CITY OF SAN BERNARDINO STAFF REPORT SHOCI LEY ENGINEERING &MANUFACTURING INC The City of San Bernardino has an opportunity to assist a plastic manufacturing company,known as Shockley Engineering & Manufacturing, Inc. The company is currently operating their business in Ontario and are considering relocating to 1493 East San Bernardino Avenue in San Bernardino. Shockley Engineering was formed in 1982 and serves the plastic industry. The company produces both high- pressure injection molding and blow molded products. This includes plastic quart containers for motor oil and plastic nozzles for paint spray cans. The company plans to purchase this 41,250 sq.ft. building and move their operations to this location. The reasons staff considers this an excellent opportunity for the City of San Bernardino are as follows: 1. Purchase Opportunity The company plans to purchase the facility and improve the property with tenant improvements. The purchase and occupancy of this facility by a viable and expanding company will add to the beautification of the area. 2. Utility Tax Increment Initially the company will pay approximately$13,855 in utility tax to the City of San Bernardino. 3. New Jobs According to Shockley, approximately 22 new, permanent jobs will be created by this venture, in addition to the 6 positions that already exist. 4. Local Employment Opportunities The San Bernardino Employment and Training Agency (SBETA), as the JTPA administrative entity for the City,will enter into an Employment Linkage Agreement with Shockley Engineering to provide on-the-job-training (OJT) for up to 22 employees from the local area. JTPA will pay 50% of an employee's salary for up to six months. In addition, the Agency's linkage program package will reimburse the company$1,000 per employee who remains on the payroll for a minimum of one year. ------------------------------------------------------------------------------------------------------------------------------- SHOCKLEY.CDC(REB/die) COMMISSION MEETING AGENDA MEETING DATE: July 1,1996 Agenda Item Number: OFFICE OF BUSINESS DEVELOPMENT/EDA-STAFF REPORT RE: SHOCKLEY ENGINEERING &MANUFACTURING,INC. June 24, 1996 page 2 The Senior Planner is working with the company to resolve planning and fireibuilding code issues relative to the new plant. The Manager of the Office of Business Development is coordinating efforts between the Agency, the Company and SBETA relative to the Employment Linkage Program. To assist in this transaction occurring,Shockley has asked for some assistance. The deal points are as follows: 1. Shockley Engineering will purchase the building with 41,000 square feet. 2. The Agency will provide $22,000 of Employment Linkage assistance (CDBG funds) through the terms established in the Employment Linkage Program and guidelines. 3. If at any time before completing five continuous years of operation,Shockley should cease operations, all CDBG funds must be repaid to the Agency. In conclusion,this is an excellent opportunity to secure a plastic manufacturing operation for San Bernardino. The improvements in utility tax and jobs are significant. The cost,relative to the economic enhancements to be derived, is minimal. This company clearly fits the Economic Strategic Plan. Based upon the foregoing, staff recommends adoption of the form motion. ROBERT E.BOTTS,Manager Office of Business Development ------------------------------------------------------------------------------------------------------------------------------- SHOCKLEY.CDC(REB/die) COMMISSION MEETING AGENDA MEETING DATE: July 1,1996 Agenda Item Number: ECONOMIC STRATEGIC PLAN POLICY STATEMENT ALLOCATION OF RESOURCES (Attach to all staff reports on projects requesting assistance.) As adopted and approved by the San Bernardino City Council and Community Development Commission THE TOP PRIORITY AND FIRST CALL ON CITY OR ECONOMIC DEVELOPMENT AGENCY FUNDS SHALL BE THE DEVELOPMENT,EXPANSION AND RECRUITMENT OF BUSINESS AND INDUSTRY WHICH BRING JOBS AND DOLLARS FROM OUTSIDE SAN BERNARDINO'S ECONOMY OR PROJECTS THAT SUPPORT THE FOREGOING! This PRIORITY ONE (1) is made up of the BASIC economic activities which are"Net Importer's of Dollars (NID's) as defined in the adopted Economic Strategy. PRIORITY ONE companies produce a product or service, sold outside San Bernardino which then brings new jobs and dollars into the City. Examples are industrial and manufacturing companies that sell products outside San Bernardino such as COBRA or Accent Furniture which manufacture products and sell them throughout the U.S. An organization such as the USPS Remote Encoding Center which provides a service,but derives it's revenue from outside San Bernardino fits Priority One. *** THIS BUSINESS/PROTECT FITS PRIORITY ONE YES [ ] NO [ ] *** ANY COMPANY OR PROJECT THAT DOES NOT FIT THE FOREGOING CRITERIA SHALL BE CONSIDERED A SECONDARY CATEGORY (Please complete the attached. Detail why this project should be considered for funding.) To support consideration for funding this 12roject the following information is required: 1. Does the business entity produce a product or service that is sold outside the City of San Bernardino? YESN— NO [ ] (If not a business, does this project support the adopted strategy as a PRIORITY ONE project?) YES [ ] NO [ ] 2. If YES to number 1, above, do all sales/revenue come from outside San Bernardino? YESY NO [ ] If NO,what is the percentage of sales/revenue that comes from outside San Bernardino? EDA Form#-Fp�–F-5p allocatn.esp(dle) ra 3. Total sales/revenue for the company- $ Total sales/revenue from inside the City-$ Total sales/revenue from outside the City-$ Ada, 606 Seconda�business or roject category. This company/project does not fit Priority One,however it should be considered for approval and/or funding. YES [ ] NO [ ) If yes,please explain in detail how this business/project fits or supports Priority One or other Priorities as approved in the adopted Strategy Plan: Approved for consideration: -- Agency A ini trator EDA Form# allocatn.esp(dle) ECONOMIC STRATEGIC PLAN POLICY STATEMENT r' COST-BENEFIT (Use this form if the project fits the Economic Strategic Plan-Priority One) *** THIS BUSINESS/PROTECT FITS PRIORITY ONE AS ADOPTED AND APPROVED IN THE ECONOMIC STRATEGIC PLAN? YES [ ) NO[ ] *** Name of Business: e N p✓Q-2 / Type of Business: 1 C,SI /�% � i kJ� Gross Sales: �� , 00 *** BENEFITS*** Number of Jobs Number of relocating employees? _ Number of projected new hires in year one? �� Total number of new jobs to San Bernardino? S, Number of entry level positions? O Wage Scale$ Number of supervisory level positions? _ Wage Scale$_ Number of management level positions? _�_ Wage Scale$ � Ooo - Capital Investment ' Total purchase price of building? ' ` C0 000 Total cost of Tenant Improvements by the company? Revenue to Cite Total sales tax paid? X I%=$ Lnet to e City Total tax increment? rt,�,q- � — /(/-zl 0�0 / fr 1 1�4 Total utility bills? � �0 f� X 8.50% _ $_ 3� �5 net to the City EDA Form#—E-0�-F W 3 costbene.esp(dle) ***COSTS *** Proposed assistance Loan$ Rate —` Term Loan Guarantee$ Term (Contingent Liability) Grant $ for Employee L' a ge Pr o-91 Number of new employees oZ during year one of operation @ $1,000 per employee $ 0 0 Off-site improvements? Industrial Revenue Bonds (pass through) $- �� Ul C:P,4 '),tij \S \k4- C il2,)A h, �- `� ftp`S d—" I l� EDA Form# costbene.esp(dle) �`l n O fy,3 May 17, 1996 Mr. Robert Botts Ms. Doris Daniels CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY 201 North"E" Street,Third Floor San Bernardino, CA 92401-1507 RE: 1493 E. San Bernardino Avenue, San Bernardino, Shockley Eng. &Mfg., Inc. Dear Bob and Doris, Thank you for our meeting on May 14, 1996 at your office. Shockley Engineering is interested in moving to the city of San Bernardino, and has entered into an agreement to purchase the above referenced 41,250 square foot industrial building from Bassett Mirror Company. Our company is in the business of manufacturing plastic bottles and is currently located in the city of Ontario. We have been in the Ontario/Pomona area for the past fifteen years and our m a J o r clients include T esto r Corp.,. W.M. Barr, Blue Cross Labs and La Porte/Leisure Time. Our manufacturing process involves blow-molding of plastic bottles and injection molding to make various small parts. Currently we have six employees in Ontario, but will need to hire twenty-two(22)new employees in San Bernardino for the new facility. The majority of these jobs will be technical in nature, paying in the $10.00 per hour range. This move will be very costly for our company as we must put a down payment on the building, move all our machinery,upgrade the electrical capacity of the building and train new employees to understand our manufacturing process.We are requesting assistance (financial, administrative, employee hiring programs, etc.) from the city to help with the cost of moving our business to San Bernardino. Please inform us as to what assistance the city can provide. We are committed to making this move and look forward to a successful business relationship with the city of San Bernardino. Sincerely, SHOCKLEY ENG. & MFG., INC. Patricia DeLeon 2¢L¢�/to�r¢ 909-986-6078