Sunday, September 07, 2014

Creation of Primary Jobs: Hirschfeld Energy & MedHab

San Angelo's City Council approved a $5.6 million economic incentive package for up to 225 jobs at Martifer-Hirschfeld Energy Systems and a $3.6 million deal for up to 227 jobs at MedHab, which planned to locate its production site in San Angelo.  The deals came from the COSADC, the city's development corporation.

Hirschfeld (minus Martifer) Energy received funds for employing 181 people through December 31, 2011.  However, they backslid in 2012 dropping to 155 employees in Q4.  That meant Hirschfeld owed the city for 26 jobs, as they didn't last the required three years.   Here's how the COSADC 2012 Annual Report described the situation:

COSADC and Legal staff are currently working with the company to determine the long range employment goals for the company and a schedule for repayment of any funds due.

City Council considered this subject in April 2014, moving it from the public agenda to executive session.  Neither Council nor COSADC have publicly addressed this issue since this executive session discussion.

Hirschfeld's 2013 performance should be in by now.  How did they do last year with their focus on oil and gas tanks/vessels?  The public has a right to know how that potential $5.6 million in public subsidy turned into actual jobs. 

COSADC board member Tommy Hiebert spent considerable time emphasizing the development corporation's legal obligation to fund primary job creation with half cent sales tax money in last month's meeting.  Coincidentally, MedHab founder and CEO Johnny Ross gave an update that very meeting.

Hiebert heard Ross explain how MedHab moved their high tech shoe insert production from Athens, Texas to Watertown, South Dakota.  Ross seemed unmoved by Hiebert's request to move his company's primary manufacturing site to San Angelo, however he did dangle MedHab's charger assembly as a good fit for production here.  Ross stated they'd make the charger and sell it to themselves.  Reading between the lines, it sounded like the charger business might be a separate company.  We'll see if a separate economic incentive arises for MedHab's charger assembly.

MedHab has six employees as of last week.  That's nearly 70 short of their stated commitment of 75.  Hirschfeld was 70 short of their commitment, but that data is twenty months old.  MedHab CEO Johnny Ross finally showed up.  Maybe Hirschfeld will do likewise.

Look for a report from someone soon.  It's their primary job to create primary jobs and report how deals have worked out.

Update 3-11-15:  The City of San Angelo is suing Hirschfeld Energy for failure to fulfill its economic development agreement.  

No comments: