City Jobs Program to boost economic development

Jun. 15—City of McAlester Economic Development Director Kirk Ridenour is confident having an approved McAlester Jobs Program document in-hand will prove helpful in convincing businesses and industries to come to the city.

It can also be utilized to help local businesses expand.

The proposed McAlester Jobs Program, created by the Local Economic and Advancement Committee, has been approved. It includes a change put in place by the city council, which Ridenour addressed while meeting with the LEAD Committee.

Previously, the proposed McAlester Jobs Program required a business, if in an incentives agreement with the city, to create at least $500,000 in new payroll within 24 months from the date of the agreement to qualify for an award from the city.

That has now been changed to "The Business must create at least 10 jobs with an average pay equal to the average pay of the non-uniformed employees of the city of McAlester.

"These jobs must be created within 24 months of the date of the agreement to qualify for the award," the McAlester Jobs Program states.

Ridenour said the McAlester Jobs Program resolution was purposely kept relatively brief, covering a few pages.

"It is a very simple document at this point," Ridenour said Tuesday. He said if a business or industry approaches the city and wants to know what kind of economic incentives are available, he will have something with which to work.

"It has the basic requirements when we're talking to a business of who would be eligible," Ridenour said.

It also puts a cap on the incentives offered compared with the payroll created by the company or business wanting an agreement with the city.

"We're not going to offer anything more than 5 percent of the annual payroll created," said Ridenour.

Purpose of the brief document is to encourage the creation of permanent full-time and part-time jobs in the city.

Another goal is to invite private businesses to make capital investments in the city.

Perpetuating a business climate that attracts startups and expansions is a goal, along with promoting a diverse mix of employment opportunities in the city.

The McAlester Jobs Program will serve only those businesses or industries within the incorporated city limits of McAlester. Those outside the city limits will not be eligible to participate.

Businesses applying to participate in the McAlester Jobs Program may work through city staff to prepare an application and supporting documentation needed for review.

"The LEAD Committee will review and make a recommendation to the city council on whether to accept the business into the program, based on certain criteria, including the type of business, the number of jobs created or retained, the amount of capital being invested, and the financial history of the business," the MJP states.

City councilors will make the final decision on whether to approve the business for the Jobs Program. If approved, an agreement will be drawn up to specify the incentive's requirements.

The McAlester Jobs Program includes a set of definitions to clarify matters, such as:

—Program — Refers to the McAlester Jobs Program.

—Agreement — Refers to the contractual incentive agreement signed between the applicant and the McAlester Economic Development Authority.

—Business — Refers to the program applicant or to the business that is accepted into the program and has signed an agreement.

—Award — Refers to the value of an incentive described in the agreement.

—Term — Refers to 60 months after the projected employment is created.

Purpose of the brief document is to encourage the creation of permanent full-time and part-time jobs in the city.

A header titled Incentive Options and Regulations address several matters, including a donation of property:

"An award may include the full or partial donation of city-owned property to the business, including sites at the Steven W. Taylor Industrial Park."

An Initial Payment header states that "Following the signing of the agreement, the city will sell the property to the business, for an amount at or below its appraised value. The business will make no additional payments until the final payment, at the end of the term."

Another entry addresses what is known as Clawback. "If the business performs no site development, makes no investment in facilities or capital, and generates no payroll within 12 months of signing the agreement, the ownership of the property shall revert back to the city," the document states.

"At the end of the term, the business will make a final payment equal to the appraised value (100 % of the percentage of the projected payroll created).

A section on Performance Incentives states an award from the city can include cash payments to a business.

During the term of the agreement, a business shall submit annual reports that sufficiently demonstrate total payroll and employment expenses. The city shall then submit a payment to the business pro-rated for the payroll created.

At the end of the agreement term, following any final payments made by the city, the business shall forfeit any unclaimed portions of the incentive.

If at any point during the term, the business reduces total payroll to 50% of the previous year, the city may terminate the agreement and the business shall forfeit any remaining performance incentive. Under extraordinary economic economic circumstances, the city may grant an exemption.

An award under $50,000 in value may be provided to the business in the form of a zero-interest forgivable loan.

During the term of the agreement, the business shall submit annual reports detailing total employment and payroll expenses over the previous year. The city shall credit the loan 1%of the value of the total payroll during that period.

Also during the term, the business will not be required to make any payments. At the end of the term, following any final credits applied to the loan the business shall repay to the city any unforgiven portions of the loan.

Contact James Beaty at jbeaty@mcalesternews.com.