City: EDC grants to directors OK
Last updated 10/12/2021 at 7:40pm
For at least the third time this year, a business owned by a City Hall insider has been awarded a high-dollar Economic Development incentive by the City of Orange.
Everyone involved says there's nothing wrong with it.
"We run it by our lawyers. We do everything by the book," Orange City Manager Mike Kunst said. "They're business owners, and just like anybody, they're trying to take advantage of an opportunity for an incentive."
Any current or potential Orange business can apply for an EDC incentive for infrastructure improvements such as electrical, HVAC, plumbing, signage and building materials.
More information can be found by going online to orangetexas.gov/158/Economic-Development-Corporation and clicking on "FAQ." Or telephone 409-883-1077.
"We can't penalize people because they serve on these various boards and commissions," Kunst said. "We want to have business owners on our EDC."
Tuesday, it was Childs Manufacturing and Building Supply granted up to $300,000 in an EDC incentive.
The business' owner is Brad Childs, a two-term city councilman and vice-president of the city's Economic Development Corporation Board.
Last month, Orange City Council approved a "not to exceed" $100,000 EDC incentive for Columbanus Motorsports, a business co-owned by Mark Frey, a former EDC director.
In March, City Council awarded up to a $95,000 EDC incentive for The Water Tree, a business co-owned by EDC Board President Michael Smith.
The City of Orange EDC is funded by a half-cent, or third, of the city's 1.5 cents sales tax on goods sold inside city limits.
Jay Trahan, Orange's EDC Director, said that money amounts to about $1.5 million per year.
A seven-member board of volunteers is charged to promote community improvement and economic development of new and expanded business enterprises within the city.
Current members include Mayor Larry Spears, council members Childs and Paul Burch, Tramena Horn, Divon West, Jason Rodrigue and Smith. City charter requires three EDC board members be elected city council members.
The EDC awards reimbursable grants, meaning the businesses do not receive the funds until the work is complete and invoices are produced for reimbursement.
Childs, Frey and Smith all recused themselves from EDC – and, in Childs' case, council – deliberations and voting related to their businesses.
Tuesday morning, the EDC voted 5-0, with Childs abstaining – to approve a motion of intent to award an EDC incentive to Childs' business. City Council then voted 5-0, with Childs abstaining, to approve the EDC's action.
Childs Building Supply is a 53-year-old second-generation family business, Childs explained to EDC and council members. It is located on the northeast side of the N. 16th Street intersection of Interstate 10.
In the last decade, the state of Texas used eminent domain to claim much of Childs' parking lot and building supply warehouse in its ongoing work to expand and rebuild the 16th Street overpass.
The city has been planning and steadily improving on the 16th Street/Highway 87 entrance into Orange, attracting new businesses like Chick Fil-A and Starbucks and envisioning travelers exiting the freeway and dining and shopping in Orange.
"Childs' is the gateway into the commercial district of 16th Street and Highway 87," Trahan said. "This project is coming at a very good time as we're working on improving 16th Street and Highway 87."
Brad Childs' father, Henry Childs, started the business in 1968, selling 2x4 studs from a U-Haul truck parked on the 16th Street property.
"The reason we're doing this remodel is because our store was split in half by TxDOT and we were not meant to be seen from the side," Brad Childs said to EDC and council members Tuesday morning.
"So now we're the gateway to Orange and we have no way of improving it at this time unless we receive funds to help us move forward to make the side look better."
Plans Childs shared with the EDC call for his business to invest $1.2 million into the remodel with $270,000 for metal building components and about the same for concrete and paving for a parking lot that will encircle the building.
Plans call for the store to add about 5,000 square feet of interior space and 2,500 square feet for a lawn and garden center.
"I waited for other people to ask [for EDC incentives] first," Childs said, "but this remodel has been in the plans a long time."
And the time is right, he's sure.
"Businesses are growing in Orange. Sales tax receipts are going up," he said. "And if it goes right, anyone who takes advantage of what the EDC can do will increase [city sales] taxes more to refill the EDC account."
The EDC also approved a $300,000 infrastructure incentive for a $2 million investment by the builders of Little Cypress Grove, a housing addition planned for North Orange.
Council, which met after the EDC, stamped its approval on the Little Cypress Grove grant agreement and voted approval for a plan by Public Works Director Jim Wolf to spend $8 million of ARPA funds.
ARPA is the $1.9 trillion American Rescue Plan Act, also known as the COVID-19 Stimulus Plan, put forward by President Joe Biden shortly after his election. It passed Congress without one vote by Republicans, who said it was unneeded.
But elected officials of all parties have raced to spend it.
It included $350 billion for states and municipalities. The City of Orange was awarded $8 million, which will come in two annual payments of $4 million.
For the first, council agreed to spend $1.2 million for the Meeks Drive Water Plant/Ground Storage Tank; $450,000 for an Emergency Generator for Meeks Drive Water Plant; $450,000 for the Westside Waterline from Tulane Road to Highway 105; $1.1 million for a Major Lift Station Rehab; and $900,000 for Stormwater Improvements at Greenway Park from Meeks Drive to Highway 87.
A non-highlight of the council meeting was a seven-minute Powerpoint explanation by Planning Director Kelvin Knauf of the new state hoop-jumping procedure required for a city to deal with a landowner seeking annexation into the city.
At least Orange council members weren't subjected to the long version by the elected state representatives who authored the bureaucratic gobbledygook long nightmare.
"Awesome," Mayor Spears said to Knauf. "Thank you."