Batesville Herald Tribune, Batesville, Indiana

February 25, 2014

BEDC studies grant application

Debbie Blank
The Herald-Tribune

---- — Mariann Dickman, owner and president of Advanced Nitriding Solutions (www.ans-ion.net), 1688 Lammers Pike, asked the Batesville Economic Development Commission Feb. 21 to get behind her application for a $1 million Lawrenceburg Regional Economic Development Grant.

BEDC President Andy Saner explained the LREDG committee has changed the process. Now grant requests must have sponsoring parties, typically governmental units. If city leaders do recommend the project to Lawrenceburg officials and job growth estimates are not fulfilled, Batesville would have to repay the grant amount. “There is an additional layer of review.”

Mayor Rick Fledderman confirmed that Lawrenceburg officials have “definitely tightened things up … they’ve been under a lot of scrutiny” by state officials after unflattering articles in the Indianapolis Star. “They’ve brought the (Southeast Indiana) Small Business Development Center in to vet projects … we have to be a little more selective in what we sponsor.”

The mayor added, “We’ve changed some of the rules we’re going by” when city businesses want to apply for Lawrenceburg grants. In the past, BEDC has not reviewed applications or made recommendations about them.

According to Dickman’s proposal, the total project cost is $2.39 million – $2.2 million to purchase equipment, $90,000 for packing and shipping and $100,000 for installation and training. The needed equipment includes three new nitriding systems, two plasma nitriding systems and one gas nitriding system.

Nitriding is a nonhazardous heat treating process used for surface hardening to provide wear and corrosion resistance for various metal components.

Dickman said she hopes to gain the $1 million grant, a $1 million commercial loan and will invest about $390,000 herself.

The paperwork also states the expansion would add 10 new employees over the next two years with hourly wages of about $15, even though Dickman expects to hire more. The six current employees would be retained, for a total of 16 workers there.

Saner questioned the company president and ANS technical director Jeff Scheel about whether more orders would materialize to justify added equipment. “The work is there,” Dickman assured him. “The problem is we only have one system … running seven days a week” to prepare parts for two automotive firms. “If this machine goes down, then we’re in trouble. We also have additional work coming” from Cummins in nearby Columbus and General Electric. The package also contained a letter of intent to do business from Vehicle Service Group, Madison.

Scheel reported he had to turn RBC Bearings work down.

“We have a track record of making money since 2009,” the president pointed out. The company’s best year was 2012 with $1.1 million in profits. Other years have averaged $500,000. “The stability is there.” According to her, “We only have five competitors in the U.S. ... This industry is only going to grow.”

BEDC member Gene Lambert asked whether the number of projected employees was accurate. Dickman explained the new equipment would be larger and capable of finishing more parts “so we need more labor.” According to Scheel, “We pay a huge amount of overtime. We could probably have four or five more staff right now.”

With extra workers, a manager would be needed, she added. ANS also needs a salesperson and receptionist.

The estimated $15-per-hour wages would not come right away. According to Dickman, new hires start at $10-$12 per hour with raises after 90 days and the first year. “If you’re going to be a keeper, we get you up to $15 and freeze your pay.” If the company is doing well, employees get quarterly bonuses of perhaps $500 to $750.

Fledderman said Administrative Resources association, Columbus, consultants will help Batesville leaders with the grant process. If the grant is awarded to ANS, the money would come to clerk-treasurer Ron Weigel, who would disburse it after confirmation that equipment has been purchased.

After the two-year grant period, ARa director Eric Frey would send a letter to Lawrenceburg officials saying whether or not the obligation has been met. “The concern we have for our communities now: You say it’s a grant, but it’s almost a forgivable loan” because results must be reported.

Dickman said without the grant, she would add one piece of equipment and hire less than 10. ANS’s growth would be slower.

After the ANS leaders left, Saner mulled over the grant request. “A million dollars is a big number. It’s $100,000 per job created” and they are “not the highest wages ... We want to make sure we’re putting our bets where they’re most likely to succeed.”

Frey recommended that SISBDC consultants review the application before BEDC decides whether to sponsor it.

Saner wondered, “Do we need to have a process in place” for future grant sponsorship requests?

Debbie Blank can be contacted at debbie.blank@batesvilleheraldtribune.com or 812-934-4343, Ext. 113.

More discussion • Now that Batesville has been awarded a $500,000 Lawrenceburg Regional Economic Development Grant to upgrade Merkel Road, which leads to the city's vacant industrial park, surveyor Rob Seig is researching what right of ways need to be acquired. Utility relocations could begin as early as June. After that, construction to widen the road could take about 60 days, depending on the weather. • Lambert recently spoke with Trevor Lane, Indiana Economic Development Corp. Southeast Indiana regional director. "They're recognizing at the state level a huge opportunity in this part of the state for a shell building." According to him, Honda executives have expressed the desire to have suppliers near the Greensburg plant. Site selectors in surrounding urban areas have told Lane available buildings for companies to move into are at an all-time low. The director told Lambert if Batesville leaders decide to construct a shell building, "'we think this is going to be a really positive thing'" for the local economy. • As the city's economic development director, Fledderman and other I-75 Corridor Group organizers will make visits to company leaders and site selectors in three Ohio cities (Columbus, Cincinnati and Cleveland) plus Chicago to try to get firms to relocate here. • Community development director Sarah Lamping announced The Sherman House is for sale. She is in charge of the BEDC status tracker. "I'm in the process of ... identifying all the properties in the community that are either vacant and for sale or vacant and for lease" so economic development Web sites can be updated. So far the tracker contains 61 entries, but information on some is minimal.