City approves forgivable loans

In a manner of minutes, the Pittsburg City Commissioners approved three forgivable loans worth close to $1.7 million. But while the final action took just minutes, the work leading up to approval of these loans took months and even years to take place.

Jake’s Fireworks, Via Christi Hospital and the Community Health Center of Southeast Kansas were each approved for a large forgivable loan provided they meet certain conditions in capital investment and job creation. City commissioners were pleased with the results of each project.

Although the consideration of the motions took a few minutes, Commissioner Marty Beezley noted that the commissioners have been studying these proposals for some time.

“We are furnishing several hundred thousand dollars tonight,” Beezley said. “We’ve been to the Economic Development Advisory Committee meetings. This is not the first time for us to see these projects. These are the biggest projects since I’ve been here, and the most the commission has been involved the entire way.”

The largest of the forgivable loans is for Jake’s Fireworks to purchase and move into the former Superior building in the Northeast Industrial Park. Jake’s was approved for a $700,000 forgivable loan at 3 percent interest on a three-year term, forgivable if the company a) invests at least $3 million in the project and b) adds five new jobs each year of the three-year term while retaining the 82 jobs already in the company.

The property, which consists of more than 500,000 square feet, would be used to warehouse and distribute Class C fireworks.

“It’s truly been a pleasure to work with everyone in the city,” said Jason Marietta, retail sales director for Jake’s. “It’s been very good and a hand-in-hand process. The city wanted us to stay here, and we wanted to stay here. This is our hometown. It’s a win-win for everybody. The building was not being used, and it will help us grow and get it back on the tax rolls. We’re Pittsburg through and through. This will be safer. [With the fire last week], this is great timing for us. It will actually be better safety here. There will be some significant expenses on our end so we can store fireworks in that building.”

The company, once it completes the formal contract with Superior Industries, will embark on a six-month process of renovating and improving the facility to meet fire codes.

Mayor John Ketterman and Commissioner Patrick O’Bryan thanked Marietta for investing in the city and expanding the company’s business.

The commission approved a $500,000 forgivable loan to Via Christi Hospital for the creation of a new 40,000-square foot surgical center to the southeast of the current location. The forgivable loan is also at a 3 percent interest rate, but is forgivable if the hospital a) invests $20.5 million into the facility, and b) hires at least 61 new, permanent jobs because of the expansion.

“We’re excited about the opportunity to serve this community and the opportunity to grow ourselves,” said Randy Cason, Via Christi CEO. “We find ourselves at the point of being able to grow. The facility is reaching the time it needs to be upgraded. It was built in 1971. We’ve been systematically investing quite a bit of capital into the organization. There is a need to invest in the surgical services. We’re embarking on the biggest major expansion in the hospital’s history.”

Hospital officials estimated that the project will have a total direct economic impact of about $16 million. Much of the rest of the $20.5 million investment, about $18.5 million, will come from bonds passed by Via Christi’s parent company.

The commissioners also approved a $460,517 forgivable loan to the Community Health Center-Southeast Kansas in return for a major expansion of their facility, as well.
The loan is also at a 3 percent interest rate and will be forgiven if CHC-SEK invests $5.7 million worth of capital and creates 42 new jobs over a four-year period.

The loan, CHC-SEK leaders said, would be used to construct a road required by the Crawford County Commission to the back of the property when they donated the property to CHC-SEK.

CHC-SEK leaders anticipate the expansion to allow the site to process 8,200 more patients each year.

In other action, the Pittsburg City Commission approved:

• awarding the 2012 sanitary sewer line repair project to the low bidder of Layne (Reynolds) Inliner of Kiowa, Colo. Commissioners had asked city engineer Bruce Remsberg to look into recommendations and references for the company after their bid came in well below all others at $253,304. Remsberg said a check had come back clean for Layne Inliner.

• approved an ordinance banning parking on the south side of E. Washington Street from Rouse Street to the Kansas City Southern railroad, and on the west side of S. Olive Street from Jefferson to Webster streets.

• heard a presentation from Public Utilities Director John Bailey about a proposed waterline replacement project to improve the city’s water lines over a five-year period. The Morning Sun will have more on this story later this week.

• approved paying PEC $6,500 for engineering services for the design of the Armory Storm Shelter project.

• approved giving access through city property to Metso Minerals and August Mack Environmental to 1308 N. Walnut for soil and groundwater sampling.

Andrew Nash can be reached at andrew.nash@morningsun.net or by calling 231-2600 ext. 140.