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HomeMy WebLinkAboutBasX Loan Docs BRIEFING PAPER FOR BasX Request for Deschutes County Forgivable Loan Company Request: $50,000 EDCO Recommendation: $50,000 Proposed Job Creation within 24 months of December 24, 2013: 50 new employees Average Pay for New Employees (all positions, excluding commissions): $46,866 Industry: High Technology Website: www.BasXSolutions.com Company Background: BasX, a manufacturer of clean-room technology products serving the medical, military, high technology and construction industries, was formed in March of 2012 and later merged the assets of DD Spinners and D-Velopment, manufacturers of components that are part of the BasX final assembled products. Specifically the company produces modularized units for surgical centers, custom air handling, evaporation units, power supply and data storage facilities. The CEO has property in Sisters, the President currently lives in Bend and the Vice President is in the process purchasing a home within Deschutes County. The President and Vice President will report to the facility daily and the CEO will be there several days a week. The company is owned by three principals (two of which are the President and CEO) and one partner organization. The CEO has significant background in this industry space following a successful multi-decade operation and exit from Huntair in Portland, OR. The firm has purchased the former Walmart facility off US 97 in South Redmond. The build-out of the facility is expected to occur over the next three months with potential occupancy by late May or early June. BasX will invest in the necessary manufacturing equipment to conduct operations in Redmond A portion of this equipment has been acquired and presently resides in Tualatin, OR where current operations and production are occurring. Roughly 10 people are employed there. If awarded, the funds from the Deschutes County Forgivable Loan Fund will be used to complete build-out of the facility, purchase additional capital equipment and assist with hiring. They plan to fill approximately 60 positions over the next 18-24 months and have committed to hiring (or transferring from Tualatin) 50 within 24 months of the application date (December 24, 2013) under the program. New employment will include positions at the administrative, engineering and middle management level as well as production positions including welders, assemblers, designers, electricians and sales. The aggregated average wage for all projected hires is $46,866. BasX provides benefits to their employees – not included in the wage noted above – including: medical, dental, 401K, profit sharing, holiday and vacation pay. EDCO built a recruitment package for BasX to show this entrepreneurial team that we wanted their next investment to happen in Deschutes County. The County’s Loan Fund was a part of that package. Due to the rapid need for expansion, EDCO is now expediting those incentive applications and approvals as part of our commitment to this project. The application was submitted on December 24th prior to the first official new hire being made. EDCO Recommendation A due diligence process was completed by the REDI (Redmond Economic Development, Inc.) incentives review committee on February 27, 2014. The participants in the review include, Joe Centanni CPA, Jim McConnell President/CEO McConnell Labs, Roger Lee Executive Director for EDCO and Jon Stark Manager for REDI. After thorough review of the application, project and historic financial review, the committee supported the following recommendation: EDCO is recommending to Deschutes County an award of $50,000 or $1,000 per job created by December 24, 2015 (24 months following the application date). Conditions include:  Company employs 50 FTE in Deschutes County by December 24, 2015 and maintains that employment until December 24, 2016.  Company provides quarterly employment updates and the ability to inspect complete financial statements from award date through termination of the yet-to-be executed agreement with Deschutes County. Failure to meet the above provisions would result in partial or full repayment of the loan, with interest.