Loading...
HomeMy WebLinkAbout11-18-19 City Commission Packet Materials - C18. Res 5115, Supporting the Application to BSTF Program on Behalf of Gibson Brands Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Director of Economic Development SUBJECT: Resolution 5115 Supporting the Application to the Big Sky Economic Development Trust Fund Program, Administered by the Montana Department of Commerce, on behalf of Gibson Brands, Inc. [Gibson] MEETING DATE: November 18, 2019 AGENDA ITEM TYPE: Consent RECOMMENDATION: Adopt Resolution 5115 authorizing the City’s application for a Big Sky Trust Fund Category I job creation grant on behalf of Gibson and administered by The Prospera Business Network. BACKGROUND: The Montana Department of Commerce administers the Big Sky Economic Development Trust Fund Category I job creation program. This State-funded program is intended to incentivize the creation of net new higher paying jobs; also a Bozeman City Commission priority. The local governing body is required to apply for the grant on behalf of the business recipient as a co- applicant with the local Certified Regional Development Corporation (CRDC). The Prospera Business Network is local CRDC which includes Gallatin County. Should the grant be awarded, staff recommends that the City Commission appoint The Prospera Business Network, our local CRDC, to administer all aspects of the grant on behalf of the City of Bozeman. Gibson, the world’s most iconic guitar brand, has shaped the sounds of generations of musicians and music lovers across genres for more than 100 years. Founded in 1894, headquartered in Nashville, TN, with a manufacturing center in Bozeman, Montana, Gibson, has a legacy of world-class craftsmanship, legendary music partnerships and progressive product evolution that is unrivaled among musical instrument companies. The Gibson Brands portfolio includes Gibson, the number one guitar brand, as well as many of the most beloved and recognizable music brands, including Epiphone, Kramer, Steinberger, and the Gibson Pro Audio division comprised of KRK, Cerwin Vega, and Stanton DJ. Gibson Brands is dedicated to quality, innovation and sound excellence so that music lovers for generations to come will continue to experience music shaped by Gibson Brands. We are proud to host Gibson in Bozeman and endeavor to work with the company to assist in their local expansion. 227 UNRESOLVED ISSUES: None ALTERNATIVES: As proposed by the City Commission FISCAL EFFECTS: If the application is successful, Gibson may be awarded up to $5,000 per net new job with a target of eighty-one (81) net new jobs over the next twenty-four (24) months for a total grant award, if all eighty-one (81) proposed new jobs are filled, of $405,000. It is important to note that the Big Sky Trust Fund support provided by the City of Bozeman, in longstanding partnership with Prospera, is not without financial risk, although the City and Prospera work closely together with the assisted business to minimize the risk. If the number of jobs identified in the contract is not filled by the assisted business, but grant dollars are received by the assisted business, the contract between the assisted business and the City of Bozeman contains the following financial restoration sections: Section 8 Conditions on Method of Reimbursement: If the Assisted Business creates an eligible new job but fails to sustain that job for the requisite duration, then the Contractor shall reimburse the Department all funds received for that job. If the Assisted Business fails to create the required number of jobs, then the Contractor shall reimburse the Department the difference between the total amount advanced and the amount attributable to actual jobs created. If the Assisted Business ceases operation at the Project Site, then the Contractor shall reimburse the Department all funds received under this Contract. AND Section 3 Compensation and Consideration: c. The Assisted Business agrees that if the local government or tribal government request the funds before the jobs are created, and the Department agrees to that request, the local or tribal government and the assisted business receiving BSTF financial assistance are liable for the full amount of the award that is advanced by the Department, if the assisted business: a. Fails to create or maintain the number of net new eligible jobs as specified in the executed contract and assistance agreement, or b. Fails to inject the required amount of match into the project as specified in the executed contract and assistance agreement. Additionally the Department may recapture funds if: a. At the end of the contract period the Department has overpaid based on the number of net new jobs at the end of the contract period. b. The business ceases operations at the Project Site within the contract period. 228 The City of Bozeman is the guarantor of BSTF grants and is ultimately responsible for any defaults. In partnership with the Department of Commerce and Prospera, the City has supported multiple BSTF assisted businesses. ATTACHMENTS: 1) Resolution 5115; and 2) Gibson Signature Certification. Report compiled on October 30, 2019. 229 RESOLUTION NO. 5115 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO THE APPLICATION TO BIG SKY ECONOMIC DEVELOPMENT TRUST FUND PROGRAM ADMINISTERED BY THE STATE OF MONTANA, DEPARTMENT OF COMMERCE, ON BEHALF OF GIBSON BRANDS, INC [GIBSON]. WHEREAS, the Bozeman City Commission is committed to facilitating economic diversification in the City and the region; and WHEREAS, the Bozeman City Commission is committed to facilitating mid- and high- wage job creation and expansion, thus positively impacting the economy of the entire region; and WHEREAS, Gibson, desires to expand their business and create additional manufacturing jobs in Bozeman; and WHEREAS, the City Commission has determined that manufacturing has high growth potential, supports mid to high wage jobs and supports economic diversity; and WHEREAS, the Montana Department of Commerce administers the Big Sky Economic Development Trust Fund Category I job creation program, a state-funded program, to create good paying jobs for Montana residents, promote long-term, stable economic growth in Montana, create partnerships, expand existing businesses and provide a better life for future generations through greater economic growth and prosperity; and WHEREAS, the City Commission hereby authorizes and appoints The Prospera Business 230 Network to administer, on behalf of the City of Bozeman, all aspects of the Big Sky Trust Fund Economic Development Category I grant and provide administrative support and other responsibility for the management and appropriate reporting to the Montana Department of Commerce. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, the City agrees to submit an application, through The Prospera Business Network, to the Montana Department of Commerce, Big Sky Economic Development Trust Fund Program to assist Gibson in their expansion project and that The Prospera Business Network will manage all aspects of the grant. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 18th day of November, 2019. CYNTHIA L. ANDRUS Mayor ATTEST: ROBIN CROUGH City Clerk APPROVED AS TO FORM: GREG SULLIVAN City Attorney 231 232