City gives local business more time to meet goals for tax breaks
The Clear Lake City Council gave its approval Monday to a request from a local employer to extend the timetable of its development agreement with the city and state.
In November 2005, the City approved the submission of a grant application to the Iowa Department of Economic Development’s (IDED) Economic Development Set-Aside (EDSA) program on behalf of Orange Tree Employment Services. The grant, in the form of a forgivable loan, was based upon the company’s intent to locate in Clear Lake and create 59 new jobs here over a three-year period. The request to IDED was in the amount of $125,000, which would be forgiven based upon the company meeting its performance standards. The City also received $8,000 for grant administration services. The EDSA grant between the Company and IDED expired at the end of November, 2008.
Orange Tree Managing Partner Craig Vinje told the Council Orange Tree has created approximately 32 new jobs. It is anticipated that, over the next 12 months, the company will be adding additional jobs to the Clear Lake facility. The company provides pre-employment and drug screenings for businesses.
Vinje noted that the nationwide economic downturn has impacted Orange Tree, but he is confident the company can “close the gap” and reach its employment number goals.
The City also approved a local economic development incentive package designed to assist the company located in Clear Lake and lease approximately 4,000 square feet of available space at the Kingland Systems Facility on 6th Avenue South. The city’s “Rental/Lease Payment Rebate Agreement” with the company was also predicated, among other things, on 59 new jobs being created. The agreement was to provide the company with lease subsidization payments of $100,000, over a three-year period, explained City Administrator Scott Flory. If the company is not able to meet the employment levels within the next year, the city would receive a pro-rated refund based on the number of new jobs created. To date, roughly $81,000 has been reimbursed by the city to the company,
Vinje said the company is very happy to be in Clear Lake and feels its location in the Kingland building is a good fit. Both companies rely upon secure technology to maintain confidentiality. Vinje said Orange Tree is also paying its employees an hourly rate of $14.90, which is more than the $13.19 the company projected when it opened. An extensive benefit package is also provided to employees, he noted. Next year’s payroll is expected to rise from $1 million in 2008 to $1.4 million in 2009.
“Overall, you have to be impressed with what they’ve done,” said Councilman Ben Furleigh after Vinje’s presentation to the Council. “It’s quite significant especially given the economic downtown.”
On a 4-0 vote the Council directed Flory to prepare a letter to IDED requesting an extension to the EDSA Agreement, to provide the Company with additional time to work towards the job creation goal. The Council also granted extensions on its agreements with Orange Tree.
