Amended and Restated Loan Agreement – The Point Distillery, LLC - $239,581.96

1:05:02Okay, and we'll go to C thirteen.

1:05:07Commissioner Weightman, I see Mr. Engel coming forward.

1:05:12Good morning, Commissioner. David Engel, Office of Economic Growth.

1:05:15Okay.

1:05:15And Commissioner Weightman?

1:05:17Thank you. I don't know. necessarily need a presentation on this. This is just a a fundamental for me, it's a it's a fundamental issue on What government should and should not be doing and I just have a concern that the government is giving. Interest free loans for private business. Yeah, we're operating as a bank. Um

1:05:46And I just I just fundamentally just dis disagree with that and I see how much money is has nothing to do with the business, but the I just don't believe Pasco County government needs to be working in a capital investment space. I think there there's risk to the taxpayer money and um it's just a a principal position I have on it. It has nothing to do with the the business and the success of the business. I just think that that business needs to be done in the in the private sector and uh Pasco County government shouldn't be competing with banks and other loan

1:06:16entities. Uh For you know, risking taxpayer dollars. So that's just my comment.

1:06:23Okay. Commissioner Oakley. Uh you gotta remember that it's board policy to help small businesses. And so we do try to go out and help. A lot of businesses cannot afford to show a way they can pay it back. This particular business has done that in the past and is Paid very well and and do not owe any money on their property whatsoever, but these get paid off. And this is a client, the citizen here in Pasco with Small Business. has

1:06:53done a great job and I'll I'll leave it to David to give you some background on that. So

1:06:59Yeah, before David goes, let me just go a little further as well. Um you know the microloan program was started years ago uh with E D C and I think we put money into it. We had the private sector also put money into it as well. And it helped these small businesses get loans that otherwise couldn't get.

1:07:15Um You could pretty much look at giving grant money and not getting anything back. At least we're getting money back from this coming forward. And that just helps them make the next step to make an investment to create fifty more jobs? Uh Mr. Angler, you can talk to specifics?

1:07:30Uh well sure. It's uh Um so I I just wanted to give the board some policy perspective. Our office doesn't arbitrarily dole out money or request or recommend money be provided to businesses in the county. Um Board of County Commissioners Resolution 15-110, which enables and establish the guidelines for the penny for PASCO, uh stipulates that we should provide aid and assistance to target industries and businesses to create jobs and create create a public purpose benefit

1:08:00to the local economy. This point distillery project meets all of the criteria of the board's adopted stipulated policy for Penny for Pasco funding. The project um the was just eight in two thousand eighteen the The property owner bought the project for $1.4 million, has pumped $400,000 of its own capital into equipment. They've created approximately fifty-two jobs, thirty-two now, twenty with the new line of equipment

1:08:30that they'll be installing. uh transitioning into a double shift. And if you look at the value equation here. Uh the jobs that this business of creating are for People with that needed second chance, whether it be single parents or ex-felons that were served their time. And if you look at the PASCO reentry program, which is a board funded program through our workforce board. We pay the workforce board seven thousand dollars for a job placed and

1:09:00trained. This is $962 because the calculation is key. The zero interest is actually the incentive. At the current prevailing borrowing rate of Pasco County, which is 4.22 percent as of last June, That's $50,000 in interest expense. And if you apply that to the 52 jobs, I think it's very efficient use of public funds. And might I add, redevelopment is very difficult. This is a redevelopment story in the Westmarket

1:09:31area. The property was formerly occupied by drug abusers and vagrants. The property is cleaned up. It's a vibrant business. And why did we give them the incentive? Why did we offer the incentive m rate making recommendation today? It's because of they have enormous startup costs to get the new line of business uh up and running. They have um ordered it's a specialty uh rum item. It'll be a big endorsement and and uh it'll be an announcement in September and they they have tremendous start up costs associated

1:10:01with it. So we're Providing a helping hand, getting a lot back in return, and they do pay taxes.

1:10:07Very good. Commissioner Weightman.

1:10:08I appreciate I appreciate the detail and I appreciate it. the reasoning why and following the rules. I just fundamentally do not believe that the government taxpayer funds should be giving interest fee loans to private business endeavors. It's a risk to the taxpayer that money can be used. I mean, what's the return on this instrument $150,000 interest free for twelve months? What's the return on the taxpayer? This business is making a gamble like every other business who

1:10:38is trying to make it and live the American dream. I just don't believe uh our government should be investing uh taxpayer money, you know, seems limited risk, but there's still risk. I appreciate the business paying it down, but we're still at a principal two hundred thirty nine thousand dollars. And I can think in all our districts and parks or what have you that we could that way we can use this money to the overall public benefit. Uh I just fundamentally don't believe that that Pasco County needs to be a bank or, you know uh

1:11:10a loan, providing loans to to businesses. I believe that's a private sector Opportunity and that's where it should remain. So it's just principal position I have. Um Nothing more than that. Um and I just appreciate y'all entertaining my my comments.

1:11:27Commissioner Weightman, always good to hear your input. Uh it is something we've looked at for a long time. It's just out of the tool and toolbox and I think it's gonna help this business. Bring in more jobs, which is what we're trying to do. Uh any other comments? Commissioner Starkey.

1:11:39Yeah, and I um spoke to the administrator and and talked to uh Mr. Engel this morning and actually I've toured that facility a couple times. I took a bunch of CEOs through there recently. Um I um You know, this is this is part of the Penny for Pasco uh program that our voters have overwhelmingly approved. and helping our small businesses grow. I think that is part of government and uh providing providing that economic opportunity um for job creation

1:12:09as well. And so, you know, I questioned the zero interest and wonder if we shouldn't, you know, add a little bit on. But when when it was explained to me the ROI on on that was it fifty thousand dollars?

1:12:22Fifty thousand and interest expense will be waived.

1:12:24Yeah. Um and the jobs created it was very low very low number, uh that the That we are um investing. I think we're getting a great return. Um I do have one one question though, and I'm looking at the site. And um You know, they done a lot of renovations but they haven't brought their landscaping up. And it's a little bit more than a little bit. It I would like to uh make sure that that we get our landscaping grant opportunity

1:12:55over to this business and um get it looking a little better. It's it is kind of austere. And certainly I think they've hit that threshold and and you know, maybe we need to Mm.

1:13:08Mr. Starkey, I'm glad you brought that up. We have presented the business in the past with opportunities to get landscaping grant funding. It was explained to my office that they are a federally uh regulated entity because it's a distillery and they're not allowed to have perimeter landscaping that obscures the property visibility from the road.

1:13:28All right. Well then I have ideas on how we can get some plants and pots along the front or something. Something. So I'll work with you on that.

1:13:36Thank you, ma'am. Okay. Good. And I'd like to say um at when we're going to be able to do Uh I talked with the CEO of the company. Um, he told me what was going on and he's good. confidentiality we can't get into but Uh my first thing was let me get David Engel and Bill Cronin in the room. We sat down, had a meeting, and creatively they came up with this idea to help this business come forward. So David, I appreciate you and Bill Cronin for making a quick move to to bring this forward. Is there another question?

1:14:04Yes, sir. On a later date, I'm just I'd be curious, Mr. Engel, to have a spreadsheet or an idea of how much money we have loaned out. with scenarios like this, how many businesses we are invested in and what our financial return is interest rate overall. uh jobs, how many of these people live in our county. You know. I I just I question this space. It has nothing to do with the business. I wish the business fantastic success. I'm glad they chose Pasco. I just don't believe this this is a a a a a role our government should be

1:14:34playing in but if we are going to be playing, it sounds like the majority wants to I'd like to understand a little bit bit better uh our risk to our investment and what what we're actually seeing here.

1:14:45Can Mr. Starkey. Um it's my understanding we're for we're we are first on the uh what's the term?

1:14:53That's correct. Uh there is no mortgage on the property where the first lien uh the property is worth probably about $1.8 million against $238,000 loan balance. Yeah.

1:15:05And I'll tell you, Commissioner Weightman, I understand your concerns and your thing. Again, it's creativity as far as trying to make something happen. We've got a list of all the ones as far as we've done microloans with, et cetera. And I can get you that list. The success rate has been very strong. Uh not all successes, but for the majority I want to say it was probably eighty five to ninety percent. uh we've been paid and these guys have paid us too over time for what they borrowed. So I mean it's a It's really no risk. It's just a matter of Do you want to stimulate the economy? Do you want to help these guys create more jobs and here's something to do with the extra line? It's it's really I I think

1:15:36a real good thing.

1:15:36Commissioner Oakley. We've had several um businesses either through P E V C or through David's department that we worked out deals for incentives that bring in business, admiral on taxes, all these things that we've given in the past to bring businesses in. We don't necessarily have to give as much now as we did in the past. because people are really wanting to be in Pasco County. So We gotta be thankful for that. We um Uh David's

1:16:06brokered different jobs. I know Bill Cronin's done the same. I mean, but we do that. That's part of our business to get 'em here. And we've been short on businesses and definitely need these businesses coming here so we'll have people that live here, work here, and play here in Pasco County. Yes, sir.

1:16:24Commissioner Weightman, um I would just say that you asking to see our records is music to my ears. We have best practices, record keeping, it's always trued up. Our overall ROI to all of the expenditures going out through our office, including the PDC, is uh for every dollar out, we have sixty-two dollars back to the economy.

1:16:45Okay. All right. Any further discussion? Move approval. Do you have a second?

1:16:52Second.

1:16:53Roll call.

1:16:54District one, Commissioner Oakley. District two, Commissioner Weightman.

1:16:58Wish the best to this business, but fundamentally Uh I don't believe our government should be Making loans like this, so I'm gonna vote no.

1:17:06District three, Commissioner Starkey. Aye. District four, Commissioner Bradford.

1:17:12Why?