Group resists city request to boost incentive for firm
A plan discussed by Grand Junction city councilors in a closed meeting to press the Grand Junction Economic Partnership into granting more incentive dollars to a local company has backfired.
Lewis Engineering had applied for funding and was offered $20,000 by GJEP to initiate an anodizing process. On June 12, a day after an executive session called by councilors, GJEP received a letter from councilors requesting the group to direct an additional $25,000 to Lewis Engineering.
GJEP board members said Lewis Engineering ultimately did not accept GJEP’s $20,000 offer because the company felt it was inadequate, although it was $5,000 more than the group normally would grant, according to a funding model based partly on job creation. Lewis Engineering told GJEP it could add five new jobs if it created an anodizing process.
GJEP denied councilors’ request to offer Lewis Engineering the additional incentive dollars.
GJEP was created to collect and distribute public dollars for the purpose of economic development. GJEP received $60,000 each year between 2006 and 2008 from the city through sales tax revenue to use as incentive dollars. The group hasn’t received incentive dollars from the city since then.
Lewis Engineering in 2008 received $51,000 from GJEP to help with another project that created 17 new jobs. GJEP’s remaining incentive fund balance from the city’s contributions is $129,000, according to Flenniken.
During a meeting earlier this month, GJEP board members said they felt blindsided by the councilors’ request and were uncomfortable because it showed favoritism for one business over another.
“How do we pick winners and losers? We want an objective process,” GJEP board member Mike Stahl told several councilors who attended the meeting.
To create parity among businesses that want to compete for incentive dollars, GJEP plans to open a bidding process for an anodizing process because the service is needed here.
Some of the criteria for the proposal could be that an anodizing line be created to accommodate other businesses and be available to them at reduced rates. Other criteria may include that the company receiving the incentive dollars must earn certification within a year and a half.
GJEP board member Denny Granum said after the GJEP meeting that the group does not receive an abundance of incentive dollars and must maintain a fair process for redistributing the funds to the community. Adopting a bidding process to distribute some funds appeared to be a fair way to do that.
“How do you justify giving one business money and the other not? We have really stick to the rules,” he said.
In the past, GJEP needed to offer about $100,000 in incentives for a local company to take on the risk of starting an anodizing process, Granum said.
GJEP Executive Director Kelly Flenniken said creating a bidding process is a new way for an economic development group to operate.
“I’m really excited about this, even though what brought us here might be a little icky,” Flenniken said during the GJEP meeting. “I think it has the potential to be a huge win for our community.”