And why do we continue this charade????
Posted: 24 February 2013 06:39 AM   [ Ignore ]
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Nanoscale is gone.  Large investment of City, University, and State tax dollars gone with it.  The Regents audit of a few years ago left lots of questions about the divesture of NutriJoy.  How much money have we poured into NISTAC??  ( I know, it’s no longer NISTAC.  The name was recently changed to something more tuned to acadamia.) 

The Mercury article suggests the City dumped only a quarter of a million into Nanoscale.  I would like to see an independent audit find just what we taxpayers did dump into that black hole.  But, due to the politics, the City won’t ask questions.

The real question is how many more tax dollars will we spend in the name of economic development.  The City Commission has made some extremely poor decisions re eco-devo.  Didn’t we give one entity substantial money to purchase land.  Once they decided they no longer needed the property, the City forgave some huge repayment amount… in essence buying back the land.  Then, we turned right around and gave that land away.

Let’s see.  What did we dump into a call center out by the Airport?  How many employees does that firm currently have on staff here in Manhattan?

The City Commission is enamoured with the Chamber.  They are joined at the hip.  As long as the elected officials in Manhattan allow themselves to be puppets for the “shadow government”, our tax dollars will continue being “going up in smoke in a business incubator”.  As long as we tolerate our Mayors sitting on the Chamber Board of Directors, even though it is a conflict of interest, we will never be fiscally conservative with tax dollars. 

Based upon the Nanoscale report, this Commission needs to do two things.  One… and most important… an independent, out of town, auditor needs hired to author an exhaustive report on City dollars spent on economic development in the last 15 years and the results of those expenditures.  Secondly, before one more dollar is spent in the name of economic development, the City needs to include counsel from an outside municipal bonding agency.  i.e. Is the proposed investment sound enough that the City’s bonding company would ‘bless it’?  If it’s not sound enough that a bonding agency would buy the paperwork, why would the City gamble tax dollars in that arena?

It’s never a good thing when our community loses jobs.  I don’t know how many were employed at Nanoscale during the past few weeks.  Hopefully, these people can find gainful employment to support their families.  They need to, especially if this Commission keeps handing tax dollars to private enterprises while cutting social services there to assist the less fortunate.

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Posted: 24 February 2013 10:29 AM   [ Ignore ]   [ # 1 ]
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Larry:  I reviewed the Manhattan Economic Development program in September.  A 100 Page annual report was provided to the Commission.  See the report and everything about eco devo at http://ourmanhattan.org/manhattancitycommission/economicdevelopment.html  Four agencies are of interest, Manhattan Holdings (Nanoscale is part of this) KSUIUC, KBED and KEC.

Manhattan Holdings - The city provided 600K in funding that is traced to the MEDOFAB initiative. The City has three members on the board of Manhattan Holdings. The city has actually received a $187,657.25 return (profit) on this investment, but would need an additional $412,342.75 to break even.

KSUIC – Kansas State University Institute for Commercialization. The city owns the facility. The bonded amount for the project was $5.65 million. An additional $875,000has been awarded to KSUIC in the form of loans and grants for improvements. The city does not share in any profits, patients or other monetary gain from the KSUIC.  The primary purpose of KSUIC is job creation, with a target of 213 jobs. The annual report indicates that the FTE – full time equivalent job count for KSUIC is minus 19.5 from last year.

KBED – Knowledge Based Economic Development. The City has invested 60K from the Industrial promotion fund into this project. KBED is a for-profit company, but has not yet generated any return to the city. The City provided the 60K to the Chamber for investment in KBED. The Chamber matched those funds. The city will receive 50% of any distribution/profit that the Chamber might receive from KBED.

KEC – Kansas Entrepreneurial Center. The building appears to be leased to the Chamber at $1.00 a year. The lease will expire in October of 2012. The facility does pay property tax of $15,419.78 per year. Companies that rent the space pay about $5,815 per month, $2,800 of that amount are needed to cover building maintenance and operations. As the building is leased the excess or profit appears to go to the Chamber.

The annual report data raises the question of should the city continue to support, fund or remain involved in – Manhattan Holdings, KBED, KSUIC and KEC?

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Posted: 24 February 2013 01:32 PM   [ Ignore ]   [ # 2 ]
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Wynn, thanks for the info.  I just hope more than one commissioner has the spine to bring up these numbers when the next request for funding is before them.

You say “City has three members on the board of Manhattan Holdings”.  Who are those three?  Is there any way to have the names of all those sitting on the MH Board released to the public?

A billion dollars corporation based in the Kansas City area was given space in the NISTAC building.  Profits from that corporation’s efforts go back to Johnson County, since the corporate bigwigs live there.  How much rent is that corporation paying to Manhattan Holdings?  Does the City realize any of that rent… if there is any?

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Posted: 24 February 2013 01:36 PM   [ Ignore ]   [ # 3 ]
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I think the City manager is one of the board members.  I am researching some more info and should have an update by Tuesday.  I have asked the City Staff to provide an update in response to the recent Mercury articles by the Tuesday meeting.

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Posted: 24 February 2013 01:56 PM   [ Ignore ]   [ # 4 ]
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Thanks, Wynn… Good job!!!

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Posted: 25 February 2013 10:10 AM   [ Ignore ]   [ # 5 ]
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Just a question Larry
How did you manage to post at 03:56 PM?  There is no 0356 PM…I think that would be 1556.

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Posted: 25 February 2013 11:32 AM   [ Ignore ]   [ # 6 ]
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When sucked into the abyss known as The Mercury, even time is a typo!!!!!

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Posted: 25 February 2013 12:08 PM   [ Ignore ]   [ # 7 ]
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After 13 yrs on ships I learned to talk that talk.  Now, 12:49 is acceptable, PM wise, but in a few minutes it will be 1300. 2400 designates the end of a day ...0001 indicates the beginning of the new day.  The only 0356 occurs in the AM.  This system is used throughout most of the world, except for the US.  Maybe the Mercury is having an identity crisis, and can’t decide which times to use. I have to admit that, for a few years, I had to count on my fingers to know what time it was.  I had a real problem crossing the international dateline, where, depending on which way we were going, we either got two Tuesdays or none at all.

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Posted: 26 February 2013 01:48 PM   [ Ignore ]   [ # 8 ]
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Here is an update on the earlier discussion.  The board members for Manhattan Holdings are (City Representatives) Ron Fehr, Randall Anderes adn Mike Daniels.

The City received another investment return from Manhattan Holdings in the amount of $119,751 in December 2012. This payment was related to prior investments in NutriJoy and ICE Corporation. The City received previous returns totaling $187,657.25, so the total value of the City’s investment is now down to approximately $292,500.

In 2006 the City provided a $450,000 loan to KSUIC to equip the laboratory and professional space in the Innovation Center. KSUIC was credited $130,000 for leasehold improvements to the KEC and has repaid $140,000 to date, so the loan balance is $180,000. The other $425,000 was the City’s local match to a $1 million Kansas Bioscience Authority grant to complete 5,000 square feet of unfinished pilot space in the Innovation Center. Those funds were not distributed to KSUIC and remain with the building asset. KSUIC has created 144 jobs since 2000, but only 38.5 of those jobs qualify under the terms of the 2007 agreement. The job count is down from a previous high of 58 primarily due to the impact of the economic recession on client companies and the decline at Nanoscale.

The attached letter (link) from President Schulz explains the relationship between KSU-IC, K-State’s 2025 vision, and local economic development -http://ourmanhattan.org/images/12100_CC_PresidentSchulzEDLetter-Attachment.pdf. 

http://ourmanhattan.org/manhattancitycommission/economicdevelopment.html

The letter mentions “promising corporate partnerships being explored,” with Veterinary Medicine, which is a partial reference to the new Veterinary and Biomedical Research Center (VBRC) that was announced earlier this month by Midwest Veterinary Services. KBED was closely involved in recruiting and developing that project. KBED is also behind the faculty seminars mentioned in the letter and does the work to develop leads from K-State faculty for corporate partnerships.

Last fall the Commission authorized renewing the KEC lease through October 31, 2013. After that, the lease automatically renews for successive one year terms unless either party terminates with 120 days notice. The Chamber does not earn a profit off of KEC leases. The Chamber maintains a separate fund for the KEC and reinvests lease payments into building maintenance and operations. The lease states that if the agreement is terminated, “any remaining net assets held by the Chamber which are derived from the use of the leased premises shall be returned to the City.”

 

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