- Real Estate
- Paris Flash
- About Us
A split Paris Economic Development Corp. board of directors adopted a budget Monday that retains a couple of items that have proved controversial.
Both Red River Region Business Incubator and Retail Attractions remain in the budget, a fact that prompted Chair Rebecca Clifford and board member David Turner to vote against it.
Clifford said that her objection is not with the incubator itself, but she feels the law prohibits a Type A economic development corporation from funding such an endeavor.
“I think any competent lawyer looking at the law and facts would conclude, as I have, that the incubator exceeds the mandate of this organization,” said Turner, who is an attorney. “Retail Attractions by its very name and very definition exceeds what this board is authorized to do by the voters.”
Clifford and Assistant Director Shannon Barrentine attended an economic development sales tax workshop last week. Clifford said she asked one of the speakers – Assistant Texas Attorney General Zindia Thomas, who works with economic development – about R3bi.
“Her response was, ‘I don’t see how it works,’” Clifford said. “But, I thought we would go ahead and get an attorney general’s opinion.”
The board voted last week to seek an official opinion about whether or not PEDC as a Type A corporation could legally fund the incubator. The process is expected to take around half a year.
They were not the only ones to take issue with the budget. Former City Manager Michael Malone spoke to a small group of board members and residents after the meeting.
“It is clearly illegal to spend this money on the incubator and Retail Attractions. It cannot be done,” he said. “I helped write the bylaws of the PEDC. I know what I’m talking about.”
Vice-Chair Toni Clem brought the discussion about R3bi to a halt, pointing out that the board voted last week to keep the incubator in the budget.
“This line of questioning is really out of order because it’s something we already voted on,” she said.
She then made a motion to adopt the budget, seconded by board member Bruce Carr. Clifford and Turner voted against, deadlocking the matter for a moment until board member Vicki Ballard announced her vote as a “Yes.”
“We had discussed weaning the incubator,” Ballard said after the meeting. “It’s the council’s decision whether to pass the budget or not. We can just submit it.”
It was the second vote on the same budget. Media reports during the weekend said some PEDC staff and board members believed the budget had passed 4-1 at last Thursday’s meeting. A review of Barrentine’s notes showed a motion to adopt the budget failed 2-3.
“There was some confusion from some parties whether the budget was passed last time. I assume because we’re all here we know it wasn’t,” Clifford said. “From now on, so there is no more confusion, each motion will have a roll call vote.”
At the board’s request, Director Steve Gilbert reworked his budget to reclassify some expenditures as promotional, such as implementation of PEDC’s business plan and the contract with Rickey Hayes of Retail Attractions to draw more retail business to Paris.
Under state law, Paris Economic Development Corp. is limited to 10 percent of its budget to promotional activities, or $120,000. As submitted and approved, the budget had $108,000 in promotional activities.
Clifford said based on her research, anything that is not a direct operational cost or part of an industrial project should fall under promotional. By that count, she said, PEDC has already spent more than $200,000 there.
“Clearly, there was a lot of tension in the meeting today – on the part of everyone,” Gilbert said after the meeting. “Now that we have a budget passed, I hope cooler heads can prevail. We have a lot of work ahead of us that includes supporting our local industry and recruiting new industry. At the end of the day, those are the things we need to be focusing on.”
The budget is to be submitted to the city finance director by the end of the day. It will then be incorporated into the city’s own proposed budget and submitted to the City Council. The council will conduct its own hearings and adopt a budget before the end of September.
Paris City Council can make changes to PEDC’s budget along the way, Gilbert said.
By Jeff Parish, eParisExtra
The Green Boutique plans to launch a new line of eco-friendly jewelry at an event downtown Saturday.
The public is invited to the launch party for Terra Natural Designs with jewelry, chocolate and wine. The event is slated for 5 to 7 p.m. at Creative Candy Designs, 115 S. Main St.
The Green Boutique has added Terra Natural Designs to its merchandise. The jewelry is made from the tagua nut found in South America. When smoothed out, the material strongly resembles ivory and has been promoted as a means to help stop poaching of elephants for their ivory.
It appears the Red River Region Region Business Incubator gets to keep its funding from Paris Economic Development Corp. for at least another year.
Although the budget has not been adopted yet, a split PEDC board voted Thursday to keep $90,000 for R3bi while trying to find a way to help the incubator stand on its own. The board also decided to seek an attorney general’s opinion about whether PEDC can legally fund a mixed use incubator.
“The incubator is helping to create companies and create jobs,” PEDC Director Steve Gilbert said. “That’s what we do.”
R3bi currently has 10 clients that include graphic design, hydroseeding, commercial piping, web design and agribusiness. Two others have graduated. In all, the incubator has added about 50 jobs.
Board Chair Rebecca Clifford said she does not have a problem with the incubator as an entity. The issue, she said, is that the businesses housed there don’t appear to be the type of industrial and manufacturing companies a 4A corporation like PEDC can fund.
“I have a problem with it because I don’t think we’re getting the bang for our buck,” board member David Turner said. “I don’t see that it does what our mission is – bring industrial-type jobs to Paris.”
“I think he’s wrong,” Vice-Chair Toni Clem said. “There are scores of A organizations that support incubators throughout the state.”
Two examples Gilbert mentioned are Athens and Marshall. Athens is home to the Biotech Manufacturing Center. Marshall has two incubators. One is the Center for Applied Technology with 15 tenants that include law firms, land management, home medical supply and general contractors. The other is called the Business Development Center, which houses 17 companies, including lawyers, diabetes education, a photography and web design firm, and an electric company.
Some comments from board members have drawn the ire of those at the incubator. John Lee, a volunteer business mentor, said he appreciates Clem’s support. He took issue with Turner’s statement Wednesday that if someone “doesn’t know how to run a business, they don’t need to be doing it.”
“It’s an insult to hard-working American entrepreneurs,” he said. “I am profoundly disappointed that otherwise educated people could reach that kind of uninformed conclusion.”
Lee also said such comments completely dismiss volunteer efforts, not only at the incubator, but across the city.
Clifford asked Gilbert and board members Bruce Carr and Vicki Ballard to work with the R3bi board of directors to develop a plan to transition the incubator away from PEDC’s budget.
“I don’t think we can fund them. I think it’s prohibited by the statute,” Turner said. “I don’t see how that is a reasonable, prudent use of PEDC money when we are strapped for cash.”
R3bi has received all of its money from PEDC for this fiscal year, which ends Sept. 31. Turner suggested axing all R3bi funding from next year’s budget.
“They’ve got the funding through the first of October,” he said. “Give them that time to seek other funds.”
Clem made a motion to keep the incubator in the budget and move forward with plans to make R3bi self-sufficient. Carr seconded the motion, but the vote stalled at 2-2. Clifford and Turner voted against.
Ballard paused, saying she was not sure about continued funding for the business incubator, but cutting it off after 90 days was “too harsh.” She ultimately voted to keep R3bi in the budget, breaking the deadlock.
“I hate being in the middle,” she said. “I hate freaking politics.”
R3bi has an operating budget with $151,400 in revenue and $84,400 in payroll and $51,400 in facility costs. Shannon Barrentine, assistant executive director of the PEDC, said the incubator’s lease is up early next year, and another site could be found to save a large portion of the building costs.
Even so, no incubator is completely self-sufficient, Gilbert said. Most partner with a college that offers office space, payroll or similar funding.
Dr. Pam Anglin, Paris Junior College president, said PJC might be able to take it in. The college already houses the Small Business Development Center.
“I could try to pick it up with the SBDC and get it on the college somehow,” she said. “It’d be a year out. It’d be September 2014 before the college could pick it up.”
By Jeff Parish, eParisExtra
The proposed Paris Economic Development Corp. budget is about 40 percent lower than the one adopted last year, but some board members are calling for further cuts.
“It seems to me we have to streamline this organization substantially,” board member David Turner said. “This budget has got to be leaned down a bunch so when the next big one, little one, medium-sized one comes along, we will be able to compete and win.”
Board Chair Rebecca Clifford said they should go through each line of the budget to see what could be cut. She expressed concern that obligations for debt payments and incentives could drain PEDC’s cash reserves in coming years. About half of the $12 million for PEDC projects for the next 10 years is already spoken for, Turner said.
Friday’s scheduled workshop has been canceled. The board will meet again at 10 a.m. Monday. A budget has to be adopted and submitted to the city by the end of the day.
PEDC Director Steve Gilbert said when he started working at the PEDC, the budget was $1 million and had little detail and a lot of “wiggle room.” After the business plan was adopted, he created a more detailed document to show where the money was going and to remove much of that slack.
The current year’s budget dropped nearly $200,000 to $817,000. Next year’s proposed budget was trimmed even further, to $600,000 in expenditures.
“We don’t do this by throwing a deck of cards in the air,” he said. “The $600,000 is 50 percent of our projected income. If you put 50 percent of revenue into reserves, you’re being pretty conservative.”
Board member Bruce Carr suggested adopting the budget as proposed and using the next year to transition to a new board and work out the best means to rebuild the cash balance.
“We are beginning to develop this; unfortunately it takes some time,” he said. “I’m comfortable with the budget as is with the understanding that we’re going to put together a tactical plan over the next year to build up those reserves.”
Vice-Chair Toni Clem made a motion to adopt the budget as is, seconded by Carr. The motion failed 2-3.
Turner recommended axing funding for the Red River Region Business Incubator, which would be a cut of about $90,000. The board voted to keep the funding.
Along with R3bi, some board members had an issue with a $33,000 contract with Retail Attractions. PEDC uses the firm to promote Paris as a place for restaurants and other retail developments.
While a 4A corporation cannot provide incentives for retail developments, it can spend up to 10 percent of its revenue on promotional efforts. When industrial developers look at a potential site, one thing they look at is what sort of restaurants, shops and other retail are available for employees and family.
Retail Attractions is currently in the middle of something that could be a big deal, and it wouldn’t be a good idea to cut the funding now, Carr said. He did suggest trying to find another group to fund the contract with Retail Attractions, although Gilbert said that is unlikely.
“We’re not the deep pockets for the rest of Paris,” Clifford said.
Turner asked what it would take to change PEDC from a 4A corporation to a 4B, which can directly provide incentives to retail projects. According to Gilbert, it would take action by the city council to bring it to a public vote.
Some economic development officials consider 4A a way to preserve money for economic development because 4B funding can also be used to pay for municipal projects such as sidewalks.
By Jeff Parish, eParisExtra
Rickey Hayes, founder and CEO of an economic consulting firm that focuses on retail development, said Panda Express is just one of many companies with their eye on the city.
The 56-year-old Paris native heads Retail Attractions, upon which the Paris Economic Development Corporation has relied since 2010 to sell Paris to retail executives as the place they should locate their next store.
Hayes talked to Panda Express during the past six months when the fast-serve Chinese restaurant chain was thinking of coming to Paris.
The company confirmed earlier this month it has purchased a site on the east side of Loop 286 and south of Lamar Avenue.
The owner of the property owns the rest of the tract between CVS Pharmacy and Workforce Solutions and is marketing it for a possible hotel and additional restaurants, according to City of Paris officials.
“One of the things we’re having to overcome right now are the lack of good retail sites, especially in the corridor of the northeast loop and the Lamar Avenue corridor, which is the region we’re keying on. So we’re looking at re-developing some pieces in that corridor.”
The Paris market is growing like some of the other booming retail communities, but it’s a market that pulls from a number of smaller communities scattered for 40 to 50 miles around, across Southeast Oklahoma and Northeast Texas, Hayes said.
“That’s what makes it dynamic. It’s not rocket science. It’s fairly easy to see, and I knew that from when I was growing up pumping gas at my family’s gas station in Paris, back when service stations were service stations. We had regular customers from Oklahoma who traded with us at our station.”
Panda Express didn’t just happen to fall in Paris’ lap by accident, Hayes said.
The dynamics are right for explosive new growth in Paris, he said, “but there’s a ton of work in every one of those new retail stores that you’ve got.”
Hayes said he cultivated rue 21, a girls’ clothing store that moved into the southeast corner of Paris Towne Plaza where the Social Security office previously was located.
He said he had discussions with Schlotzsky’s, Wingstop, Pizza Hut, and Which-Wich, a sandwich restaurant that will have space along with Denny’s in a travel center under construction now on the northeast loop by First Federal Community Bank.
.”I spoke to a group of Realtors in Paris last month at a breakfast meeting, and one of the brokers said, ‘I know I can’t prove you or your company is responsible for all these new restaurants, but we weren’t getting them until we hired you, so keep up the good work!’
“I think what you’re starting to see is kind of a culmination of a lot of dissemination of the Paris story, on a larger scale than it has ever been shared before,” he said.
“You never know which conversation you have with somebody is the deal that pushed them over the edge and got them to commit. But you share the data, you’re persistent, you’re talking to them, and then they have to do their due diligence,” he said.
“And the more people we can get to look at the market, the better we are, because the market speaks for itself.”
Chili’s and Appleby’s are national brands with premium sales in Paris, and that speaks well, Hayes said.
“And you’ve got Walgreen’s and CVS and Home Depot and Walmart – you know, all the big nationals – and so their volume and the amount of tax revenue and sales tax that comes back to the community is indicative of a strong and dynamic retail market. So that’s what they’re seeing.”
It’s good that Paris’ city government is more stable than it’s been in a number of years, Hayes said, “and I think there are some great things to come. We’re working on some deals that I can’t discuss, but it’s very exciting and I hope it continues.”
The closing of Hastings Book Store earlier this month leaves a sizable vacancy on the east side of Paris Towne Center, across from the Rusty Taco and Schlotzsky’s, which are two of the newest restaurants.
Hayes said he is sure that the spot on the east side of Paris Towne Center won’t stay vacant long.
“They may have to sub-divide it, and there may be two or more tenants in the spot Hastings was in, but that’s a dynamic area of the shopping center,” Hayes said.
“Hastings is one of those retailers that has experienced kind of the curse of the modern era. I mean, you can buy books and CD’s and rent movies online cheaper than you can get in your car and go to the store. Paris is not the only store Hastings is closing. They’ve closed several in cities I’m working in right now.”
His relationship in Paris is unique, he said, “because I grew up there – lived there for 45 years. I was a police officer from the late 80’s through the 90’s. My mom (longtime Paris News employee Onvie Hayes) and brother still live there. His father was Coyle Hayes.
He and his wife of 33 years — the former Wendy McCollum, like Hayes a Paris High School graduate — moved 12 years ago to Owasso, Okla., a Tulsa suburb. He became economic development director of the community, “which experienced real retail resurgence,” he said.
Hayes orchestrated the development of a 4.2 million-square-foot regional shopping district in Owasso.
In 2007, he began Retail Attractions, whose clientele has grown to more than 125 cities.
He got to know PEDC executive director Steve Gilbert “from some work we did together in Oklahoma,” where Gilbert was involved in economic development before coming to Paris.
“When Steve got the EDC job (in Paris), I called him and met with him and Pike Burkhart, Rick Poston, Dan Smith and some others that were on the EDC at the time. They had a retail market study done that they weren’t really satisfied with the result they got,” Hayes said.
“Steve knew me and knew what we did and that our company was more goal-oriented and recruitment-oriented, so I did a market analysis at the PEDC’s request and came to Paris and presented it to the community at Love Civic Center in January of 2010.”
The company hired him to work in a consulting role to recruit new retail, and Hayes is now in his fourth year representing the city’s interest.
“Steve and I have a great relationship. I think he may be one of the best economic development guys in Texas. He certainly did well in Oklahoma. The Skinner deal was huge, and they are working on some big deals. Hopefully, there are just more to come.”
By Charles Richards, eParisExtra