Tuesday, March 27, 2012
MedHab co-founder Johnny Ross spoke at Texas Tech's Rawls College of Business Chief Executive Roundtable last week. As the video is not yet available, it's not clear what progress MedHab made in selecting a production site or how it might've levered over $3.8 million in economic development support into mezzanine capital raising. It's nearly been three months since San Angelo opened its economic development wallet for MedHab. The parties remain silent on all fronts.
I wonder if Johnny Ross spoke of San Angelo's largesse, given Angelo State University's association with Texas Tech. San Angelo Mayor Alvin New missed the City Council meeting on MedHab's economic development incentives. That was fortuitous given the Mayor's declared conflict of interest via his MedHab equity holdings. Council removed a bylaw requirement that would've forced New to step down as Mayor or sell his investment and have MedHab wait for six months before assistance could be approved.
Mayor New made his fortune via Town & Country Food Stores. He rose to the office of President, where he navigated the sale of Town & Country to Susser Holdings. Ironically, Sam Susser spoke at TTU's Rawls College of Business in April 2010. The son Sam Susser couldn't make it, due to a $425 million bond refinancing.
Father Sam told how his company courted Steve Stephens, but lost out to family members and a professional manager, likely Alvin New. Sam Junior stayed in relationship with Town & Country executives. A decade after its first run, Susser bought out Town & Country.
A tiny chunk of Alvin New's 2008 Town & Country proceeds turned into MedHab equity investment, evidenced by affidavits in May and November 2011. How much will San Angelo economic development support enhance Alvin New's equity stake in MedHab, which could be magnified via New's board slot and its compensation arrangement?
I found it interesting that Johnny Ross dangled jobs before San Angelo in his letter of support for then Mayoral Candidate Alvin New. His 2010 decision leaked two extra years into 2012.
If this were a business case, it'd be worth asking, why the delays? I'd also require students to identify the benefits of taxpayer-provided nonequity, nondebt capital injections. Quick answer: Investors win!
Update 2-7-13: TTU posted the video and slides for this talk on their website.
by PEU Report/State of the Division at 7:03 PM