Wednesday, March 20, 2013

MedHab LLC & Development Corporation Update

San Angelo Development Corporation's board packet for March 20 showed MedHab LLC received no incentive payments as of February 2013.  The City paid zero dollars of an expected $800,000 in aid so far this fiscal year.

Oddly, the February 27 Development Corporation meeting had several friction points between the board and the City.  The board didn't appreciate paying $62,000 for Shawn Lewis to get a professional certification and Lewis not complete the program before leaving for Longmont, Colorado.  The board invited City Manager Daniel Valenzuela to today's meeting to learn of his vision for reorganizing economic development.   Development Corporation leadership felt they needed an update in order to progress on several fronts, including replacing key employees.

Many City and Development Corporation employees who crafted, presented and executed the MedHab deal are gone.  That includes Harold Dominguez, Shawn Lewis, Donna Osborne and Cindy Hartin (who was in the job less than one year). 

Cindy Hartin's last agenda item before the Development Corporation board was:

Presentation of Annual Report for the Concho Valley Center for Entrepreneurial Development (CVCED) (Presentation by Cindy Hartin, Economic Development Coordinator and Johnny Ross, MedHab LLC)
The minutes of that presentation state:

Mr. Schneeman introduced Mr. Johnny Ross from MedHab. Mr. Ross provided an update on the progress of his business and StepRite product. MedHab will be launching the retail product in March. Two employees have been hired and an estimated eight positions will be filled in 2013. Manufacturing and distribution will be moved to San Angelo once there is FDA approval and a redundancy location is identified. MedHab projects to sell approximately 10,900 units in 2013. Mr. Teague asked if this was a realistic number and Mr. Ross stated that TMAC has analyzed the production and believe that the manufacturing process can hit that number.
The first mention of a retail product came via KLST. The news report suggested a December start date for San Angelo production for sports retail stores.

Production was to begin in June 2012 before leaking back to October, December and now March 2013.

The shift from medical device to athletic store novelty item is a marked change in strategy, given the huge difference in pricing power.

Note:  the February 13 report indicates MedHab's retail product will not be made in San Angelo.  Elusive FDA approval is the trigger for San Angelo and another site, referred to as a redundancy location, to garner jobs.

Abilene courted MedHab alongside San Angelo, while Lubbock pressed hard afterwards.  Where might this redundant location be and how much economic development aid will they offer?  Stay tuned as MedHab LLC turns. By the end of 2013 will they provide 10 of the promised "up to 227" jobs?

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