If so, what about money?

Off the Editor’s Spike by Darryl Wilkinson

Is it a good idea for the Gallatin Industrial Development Corporation to sell its only asset, the cap factory building?

Better question: If the sale is made, what becomes of the money?

Over four decades ago a group of local citizens incorporated for the purpose of bringing jobs to Gallatin. A building was constructed and Lambert Manufacturing moved in. When finances grew tight, shares in the corporation expanded. Employees diverted portions of payroll to stock purchases, and the business stabilized, even grew. Two additions were made to the building.

Well over 100 people were employed when the business thrived. Times changed. In more recent years fewer people have worked there. The not quite 25,000 sq. ft. building is underutilized.

Terms of the lease would embarrass any businessmen if the idea was for the GIDC to make money off the lease. That was never the case; the goal was, and continues to be, jobs. But increasingly, Lambert faced rising utility bills in an oversized work space while the GIDC faced worries about paying insurance and maintenance without any cash flow if the building were to become vacant.

The Daviess County Commission faced another issue. The settlement on the sale of the nursing home here specified that proceeds be spent on health care for Daviess Countians.

The Daviess County Health Department has been shopping to relocate into larger quarters for quite some time. Naturally, the desire was to build new. Their budget, however, doesn’t make new construction a realistic option (their operational budget is so tight that office hours are affected, but that’s a separate discussion). But what about using the cap factory?

Discussions pointed to a win-win-win conclusion — if the price of the cap factory plus necessary remodeling costs kept within the county’s pocketbook. The GIDC wins by getting close to the appraised value of a large, older building in Gallatin without uprooting the business tenant. Lambert wins through utility efficiencies and more practical work space. The health department wins new expanded office space with a great Main Street location to be enhanced by a new driveway and handicapped accessible features. The county commission solves its nursing home obligation while improving county health services.

There is confusion in the details, as you might expect with this many players involved. The first question, however, is answered. Four remodeling bids were received by the GIDC board. The decision now has been narrowed to two, and the construction costs are expected to be within the pocketbook limits. This project can be done.

Among the financial details are questions about prevailing wage regulations. Nobody wants a repeat of the City of Gallatin’s mistake in failing to meet terms of the law on the natural gas project. At the same time, nobody wants to add $20,000 to $30,000 onto the price tag to relocate the health department if Missouri’s prevailing wage law doesn’t apply.

The project is stalled while this is being resolved. The GIDC is a “for profit” entity which plans to perform the remodeling, then sell to a public entity. There is case law which lawyers refer to and, with lawyers involved, there are differing opinions.

Some are anxious. Contractors making bids would like nothing better than an indoor job with 6-8 inches of snow on the ground. The necessary discussion leading to the bid process was priority, knowing that prompt action this time of year would lower costs. And, naturally, the health department is excited about getting into new offices. But all concerned are more interested in getting things right than getting it right away.

Let’s assume things develop as planned. The GIDC lets the bid, the remodeling gets done within 60 days and the relocation is completed with everyone happily sitting in the warm spring sun. What should the GIDC do with its money?

For decades stockholders of the GIDC could not easily assign any real value to each share. Stockholders moved away or even died; the paperwork ignored. A few inquiries mostly from executor of estates were handled down through the years but most lost interest when acquainted with the considered value of each share.

Now identifying stock value becomes easy — just add the proceeds from the sale (estimated at $70,000) to what little has piled up in the bank account.

The real problem is identifying the stockholders. Current board members are caretakers of a long dormant, and by now inaccurate list, of stockholders. At best, a meeting could be declared and enough stockholders would attend to make decisions. At worst, more confusion and indecision.

Bylaws indicate the intention of the organization is to promote economic development and that the board take steps necessary to meet that general goal. That could mean that the board, energized by its new cash assets, should renew its efforts toward its original responsibilities — work on ways to create jobs in Gallatin.

What do you think? Should the GIDC dissolve by dispersing its assets to stockholders as best as can be determined, or should the effort continue for economic development in Gallatin?