Lemoore City Council debates future of retail and industrial economic development

Kings EDC Chief Executive Officer and President John Lehn was on hand Tuesday to argue for his organization.

Councilmembers also considered hiring a new firm to handle the city’s retail development. CrisCom, a firm that specializes in governmental affairs, business development, and public relations, is currently assisting the city’s police department in obtaining funding for a proposed dispatch center.

City officials recommended that councilmembers hire CrisCom to actively pursue retail economic development to the tune of about $5,000 per month, which includes the $1,500 it currently gets for seeking funding for the dispatch center. The total annual cost to the city for CrisCom’s services would cost Lemoore $60,000 annually.

Currently the city pays the EDC $37,079 per year for its industrial development services. Lemoore has had an economic relationship with the EDC for approximately 48 years.

CrisCom CEO Charles Jelloian spoke first at the council meeting as he boosted his company’s chances for a contract to provide the city with retail development services. Jelloian, whose firm also represents nearby Corcoran, told council members his company has the tools and experience to attract retail, and that Lemoore is an attractive site for possible sales-tax producing businesses.

“We’ve done a good job of bringing businesses to Corcoran,” he said.  “We’ve got a good team here. We’ve got (Highway) 198 and 41, which is a beautiful thing. You have 25,000 people here, which is a good thing. We want to work with the folks here in Lemoore.”

He added that Lemoore, with the Naval Air Station as a neighbor, is an attractive presence for prospective retailers. “A lot of developers are used to going to small towns. Some of those folks would be very interested in coming here because of the population.”

He certainly had Mayor Billy Siegel’s attention. The mayor repeatedly praised Jelloian for his ideas, which he says could boost retail sales tax dollars. “I believe in you. I’m not ready to sign a 10-year contract. I believe your efforts are genuine,” he said. “I believe we should go forward and take this opportunity and catch up with sales tax efforts.”

Councilmember Ray Madrigal, a recent newcomer to the council, expressed his displeasure with the way the Kings EDC was treated during recent budget hearings. Siegel expressed his dissatisfaction with the EDC, while praising CrisCom for its proposal to solicit retail economic development.

“We owed them (Kings EDC) the opportunity to come and speak to us before we make a decision,” said Madrigal. He added that former councilmember Gordon was on the EDC’s board. “Did he ever come back to report to the council. I think this is a two-way street. We owe them something.”

Madrigal also made it clear he supports the EDC after hearing Lehn outline a long list of things it does for Lemoore. Lehn recited a long list of efforts the EDC has undertaken for Lemoore, from business retention to simply educating local businesses on legislative efforts which could affect them.

“I don’t think it’s a good time to get out of the EDC,” Madrigal said.

In what early on appeared to be a slam dunk for CrisCom, Councilmember Lois Wynne quickly moved to hire the outside firm, but before anyone seconded the motion, Madrigal quickly raised his concerns, suggesting that the council needed to hear from Kings EDC before any decisions were reached regarding economic development.

Following some give and take from councilmembers, they agreed to table CrisCom’s proposal and proceed to the EDC to hear from Lehn, who in his remarks proceeded to highlight the role the EDC has had in promoting Lemoore’s considerable industrial prospects.

Lehn told councilmembers that  EDC, in some form or another, has promoted the city for nearly 48 years and said he was surprised when he learned that city leaders had stricken his agency from the city’s budget. “It was a bit of a shock,” he said. He told councilmembers that he reviewed the audio tapes of the city’s discussion of the EDC at a recent study session and said the conversation amounted to about 15 seconds. “It seems to me we’re due a little bit more than that,” he added.

“We certainly understand your desire for retail development,” he continued. “I get that. The only way to build an economy is to bring more money into it,” by recruiting businesses like Leprino East, Western RV, Olam and other large companies that have played a big role in Lemoore’s industrial development.

Siegel was on the budget committee that decided the fate of the EDC. Other members of the budget committee included City Manager Jeff Laws and Councilmember Wynne. Laws told The Leader he didn’t remember who recommended cutting the EDC, but judging by Siegel’s remarks to Lehn, made it clear that he approved of it.

“Since 2010 we haven’t done anything but lose businesses,” he said. “I’m just concerned about results. If you don’t produce results I feel as though you owe us money.”

City staff argued that industrial development may not be in the cards for Lemoore. Currently, industrial development is the primary focus of Kings EDC. “This type of development brings jobs and increased property tax revenue to the city, but typically does not generate sales tax revenue,” stated Laws in a staff report to council. The Lemoore Redevelopment Agency used to fund Kings EDC, he stated. Since the demise of the agency, funding has had to come from the Lemoore general fund.

He also said that the city doesn’t have enough water to accommodate many industries. Lehn argued that not all industries require huge amounts of water.

In his remarks, Lehn also recited a laundry list of activities and services provided to the city of Lemoore, including business attractions, business retention, financing, and incentives. The EDC, he said, has participated in the location of major industrial partners Leprino Foods, Agusa, Budget Rent-a-Car, Communication Services for the Deaf, and K-Pack USA. The EDC was also instrumental in locating Western RV to the Lemoore Industrial Park, and provided business incentive information during SK Food’s recent sale to Olam.

 Lehn said the top four industrial businesses in Lemoore contribute an estimated $4.7 million in annual property tax, and provide a payroll exceeding $87 million.

Furthermore, said Lehn, local businesses have benefitted from the Kings EDC. He told councilmembers that the EDC has loaned nearly $4 million to businesses in Lemoore at terms often more generous than what banks could provide.

Siegel continued to criticize the EDC, insisting that the EDC hasn’t spoken to councilmembers for over two years, despite the fact that former city councilmember Gordon, who recently resigned from the council, was a member of the EDC board and attended meetings on a regular basis. City staff, including the city manager, also attended board meetings.

Councilmembers finally opted to table the proposals for economic development, from both the EDC and CrisCom, and schedule study sessions to develop a series of goals and objectives in regards to Lemoore’s economic development policies. However, they did approve CrisCom’s work for the Lemoore Police Department at $1,500 per month.