Document Sample
					                      ANNUAL REPORT

                          FINANCIAL HIGHLIGHTS

                                        Budget Summary
                                Fiscal Year Ending June 30, 2000

           Category                Budget           Spent          Carryover      % Spent
Auto/Travel                          $5,220.00       $2,843.68        $2376.32         54%
Communications                        5,750.00        5,953.32         (202.32)       104%
Conference/Training/Education         5,000.00          967.73         4,032.27        19%
Dues/Subscriptions                      850.00          460.90           389.10        54%
Meetings                              2,500.00        1,660.32           839.68        66%
Miscellaneous/Contingency             2,000.00        1,575.84           424.16        79%
Office Equipment                      2,000.00        2,471.15         (471.15)       124%
Office Supplies                       4,000.00        2,757.99         1,242.01        69%
Postage                                 900.00        1,010.11         (110.01)       112%
Prospects                            10,000.00        1,430.34         8,569.66        14%
Payroll                             123,045.00      121,187.56         1,857.44        98%
Payroll Taxes/Benefits               20,069.00       18,294.00         1,775.00        91%
Utilities                             1,900.00        1,313.87           586.13        69%
Totals                             $183,234.00     $161,926.71      $21,307.29         88%

                                AGENCY PROFILE

The Loudon County Economic Development Agency is a private non-profit organization
chartered under the Tennessee’s Secretary of State Office. Originally organized as the
Loudon County Industrial Committee of 100 in 1967, the Board approved in FY 1999-2000
a change in name, membership, and expansion of the organization’s role which now includes
serving as the local Community and Economic Development Board under Public Act 1101.
These changes reflect a broadened perspective of economic development and the
interrelationship with community development programs. The Board’s membership
expanded from seven to eight members to include a representative who owns land qualifying
under the States Greenbelt Legislation. We are pleased that Mr. John Harrison, a successful
agri-business owner, accepted this appointment. Another change in membership is the
appointment of Jim Condra, replacing Shirley Reno, representing the Loudon County
Chamber of Commerce, and Eddie Simpson, replacing retired Councilman Iddus "Babe"
Connor, representing the City of Lenoir City. The Board’s unique blend of expertise and
diversity supports the Agency’s vision for stimulating both the local economy and
community development.
                                  Board Members

            George M. Miller, Chairman
            Ted Randolph                          Ex-Officio Members
            Bernie R. Swiney                        Charles Eblen
            Jim Condra                                Barry Baker
            Eddie Simpson                             Bill Dunnill
            Harvey Sproul                         Allison Beltz Sousa
            Jim Curtis                                 Dale Hurst
            John Harrison

                                   Staff Members

                             Patrick Phillips, President
                        Jeremy Stratton, Assistant Director
                       Kathy Knight, Administrative Assistant


For the past 33 years, the organization has been at the center for economic development
activities in Loudon County. The Board’s composition represents a strong affiliation with
local government and other local entities involved in stimulating the economic vitality of the
County. Loudon County’s successes are not a result of any one person or organization, but
the ability of our elected and appointed officials to work cooperatively to fund and promote
strong economic development initiatives. The cooperative spirit within the community
continues to propel Loudon County’s economy. Loudon County offers a competitive
environment for business opportunities maintaining one of the lowest property tax rates in
the State while continuing to expand quality services and programs.

The Loudon County Economic Development Agency has an obligation to ensure a strong
local economy, one that is built on a solid foundation. To this end our core mission is:
Participate and encourage the creation of quality and lasting community and
economic development programs which promote an exceptional pro-business
climate that encourages capital investment business locations that contribute
significantly to the local economy benefiting local government programs/services
and that offer challenging and rewarding employment opportunities to the citizens of
Loudon County.

We also realize that the health of the local economy is affected not singularly by our efforts
but from a much broader context, principally the East Tennessee Region. Education,

LCEDA ANNUAL REPORT                                                                        2
workforce development, community infrastructure and sound marketing efforts in the
Region are vital to our prosperity. We are committed to strengthening the regional
perspective and cooperation among affiliated organizations and local governments.

                    HIGHLIGHTS FROM FY 1999-2000

   •   Loudon County Career and Higher
       Education Center: From concept to
       reality, this $3.5 M project began in
       earnest following the fire which
       destroyed the 100 block of West
       Broadway in March of 1999 to
       construction which began in July of
       2000. Scheduled for completion the
       summer of 2001, the facility will be the
       new home for Roane State Community College, Loudon County Career Center
       participants (Labor and Workforce Development, Adult Basic Education, and
       Workforce Investment), and the Lenoir City Branch for the Loudon County Library
       System. The project represents a commitment by the City and County to encourage
       higher education, workforce development and community development and
       downtown redevelopment. The project, which is jointly funded by the County and
       Lenoir City, received $1.7 M in grant funding from the Economic Development
       Administration, Appalachian Regional Commission, and Rural Development
       Agency. To date, over $400,000 has been pledged from businesses and citizens for
       equipment and furnishings for the Center.

   •   Centre Seventy-Five, Loudon County’s most recent business park began
       construction with site grading in the fall of 1999. Located at the intersection of
       Highway 72 and Interstate 75, the park features a mixed-use concept including
       industrial, commercial, and residential parcels. Designed as a premier business park,
       amenities include curb and gutter roads, regional detention/retention pond, lighting,
       greenway, entrance signs, landscaping, graded site, and design guidelines. The park is
       scheduled for completion in late fall of 2000. A joint project between the County of
       Loudon and City of Loudon, this $6.1 M park received a $1 M grant from the
       Economic Development Administration to fund infrastructure and $45,000 from the
       Tennessee Department of Transportation to fund improvements to Highway 72.

   •   Highlands Business Park, located on the northwest quadrant of Interstate 75 and
       Highway 72 is a private public partnership with the County and City of Loudon.
       The partnership will provide infrastructure to open over 150 acres of prime
       industrial property including the construction of a 100,000 square feet speculative
       precast/tilt-up building.

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  •   Matlock Bend/John Thornton residential golf and waterfront community will
      be located on approximately 1,400 acres of land originally owned by Eastman
      Chemical Company, which purchased the property in 1991. Eastman’s decision to
      sale the property came after talks with the Agency's Board members which released a
      right of first refusal to John Thornton for a $150 M project residential and golf
      community. The project will feature a 36-hole golf facility licensed by the University
      of Tennessee, marina, convention center and 1,800 home sites.


  •   Kimberly-Clark Loudon Mill Expansion: $101,000,000 capital investment and 60-
      70 new positions. This expansion will be the first payment in-lieu of tax project in
      Loudon County that will generate $423,000 annually for five years. The State of
      Tennessee has committed $750,000 in Tennessee Infrastructure Funds for the

         Kimberly Clark $100 Million Expansion Announced (June 2000) - Kimberly-Clark
         Corporation today announced a $101-million expansion of its Loudon, TN plant. New, state-of-the-art
         tissue machines will be added at the site, the announcement stated. The new machines use proprietary
         technology that has helped drive the sale of Kimberly-Clark products, which include Kleenex and Scott tissue
         and paper towels. Employment is expected to increase by 60 at the Loudon plant. The expansion also
         represents the first time local governments have participated in a Payment-In-Lieu-Of-Taxes (PILOT)
         program. Under the agreement, the company will pay about 80 percent of its projected tax revenues for five
         years, freeing more money to pay for the expansion. With several Kimberly-Clark locations competing for the
         project, the Loudon County's PILOT program was instrumental in winning the expansion.
         Source: Tennessee Resource Valley's Website Newsletter

  •   Malibu Boats Expansion: The expansion of Malibu Boats' Loudon facility in
      Sugarlimb involves and investment of $650,000 and the addition of 25 new
      employees increasing the annual payroll by $2,000,000.

  •   Ponce Metals: Ponce Metals' new facility will feature state of the art metal stamping
      machinery for a total investment of $4,000,000.

  •   Nationwide Logistics Center: Phase I includes the construction of 160,000 square
      foot facility estimated at $2,000,000 and creating 50 new positions with a payroll of
      $1.5 M. The new facility will be constructed in Matlock Bend on Corporate Park
      Drive. A second phase will generate an additional investment of $1,000,000 and will
      double employment.

  •   Pennzoil/Kwik Oil: Loudon’s Blair Bend Industrial Park speculative building will
      be the new regional distribution center for Pennzoil/Kwik Oil in this 20,000 square
      foot facility, which was recently approved by the County and City of Loudon.
      Future plans call for expansion of the facility.

LCEDA ANNUAL REPORT                                                                                                     4
   •   ArvinMeritor (Maremont): On July 1, 2000, ArvinMeritor announced a merger
       that brings an additional 80 positions to the Loudon facility, which continues to be
       Loudon County’s largest employer.

          Top Employer Changes Name - A merger combining two of the world's largest automotive supplier
          companies means a name change for Loudon County's largest employer. Maremont, which manufacturers and
          distributes various types of exhaust and accessory products, is now known as ArvinMeritor. The change began in
          April when Maremont's parent company, Arvin Industries Inc., announced an agreement to merge with Meritor
          Automotive Inc……..
          Source: Loudon County News-Herald, August 2-3, 2000 edition

   •   John Deer Commercial Worksite Products: This three year expansion effort will
       generate a real and personal investment of $16,000,000 with the addition of 40 new
       employees, generating $925,000 new payroll annually. Through 2003, the expansion
       will generate $5.2 M in new payroll. The expansion contributed to investment by
       Appalachian Regional Commission for a new substation serving the John Deere
       facility and Matlock Bend.

   •   Loudon County Trucking: Loudon County Trucking began the construction of its
       new facility in Blair Bend Industrial Park spring of 2000 on eight acres on
       Williamson Drive. The new facility will replace the company’s present facility in Blair

   •   Concrete Wall Systems: Concrete Wall Systems' new facility in the Lenoir City
       Fort Loudoun Industrial Park was completed in the spring of 2000.

   •   Commercial Development: The Agency has played a key role in assisting in the
       location of new commercial developments predominantly in the Lenoir City area.
       Our role is one of technical and information support services.


Loudon County Economic Development Agency (formerly the Loudon County Industrial
Committee of 100) -- a new name and new image/logo are recent marketing changes
approved by the Board in 1999. This change is a departure from the traditional image of
industrial recruitment and expansion and greater emphasis on diverse economic
development initiatives.

   •   Unequivocally Loudon County, Tennessee: The
       Agency’s first professional marketing brochure prepared
       by Key & Associates was developed. This multi-paged,
       three color brochure serves as our primary marketing
       tool which highlights the Agency, County, and East

LCEDA ANNUAL REPORT                                                                                                  5
       Tennessee Region. Primary sections include transportation, telecommunications,
       technology, education, recreation/culture, quality of life, and demographics. All
       marketing materials, including reports and data books, will feature the new logo and
       color schemes.

   • Our web site was up and running this past winter and
       includes the reoccurring logo and color scheme as our marketing brochure. The web
       site provides an easy menu to navigate through the various sections from
       demographics to available sites and beyond. The web site will continue to expand
       and serve as a primary marketing medium for site consultants.

   •   Trade Missions and Recruiting Trips: During the fall, the Agency was
       represented in a regional economic trade mission to the United Kingdom (UK),
       which yielded two visits from British Companies. The trip provided contacts with
       several large international banks and regional chambers of commerce in the northern
       part of the UK. While marketing trips have great potential, the limited financial
       resources of the Agency restrict our attendance at many missions and trade shows
       which are not funded as a representative of the East Tennessee Industrial
       Development Association.

   •   Existing Industry Program: Our existing industry program provides resources to
       industry on such topics as labor, grants and loans, construction assistance, and
       marketing. Quarterly meetings with existing industry management provides the
       opportunity for local industries to interact with one another and to share insights
       into issues affecting them all. Expansion of existing industry typically accounts for
       80 percent of a community’s growth in labor and capital investment and in Loudon
       County, this is readily apparent. Labor availability and training have dominated
       meetings during FY ’99-'00. Maintaining a skilled and dependable workforce is
       essential to promoting expansion opportunities during the next 10 years.


Grants assisted by the Loudon County Economic Development Agency and received for the
community include:

         Granting Agency                              Project                    Amount
Economic Development Administration        Sugarlimb Project                       $750,000
Economic Development Administration        Career Center Project                    1,085,000
Appalachian Regional Commission            Career Center Project                      500,000
Rural Development Agency                   Career Center Project                       99,000

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           Granting Agency                                Project                    Amount
Tennessee Dept. of Transportation             Sugarlimb Industrial Park                  40,000
Wal-Mart Foundation                           Agency Marketing Material                   2,000
Bechtel Jacobs Development                    Agency Computer Equipment                   9,600
Tennessee Dept. of Transportation             Sugarlimb Industrial Park                  62,000
Economic Development Administration           Centre Seventy-Five                       1,000,000
Tennessee Dept. of Transportation             Centre Seventy-Five                          45,000
Community Reuse Organization of East
Tennessee (CROET)                             Agency Computer Equipment                    13,800
Tennessee Economic and Community
                                              Kimberly-Clark                              500,000
Development TIIP's Funds

                                 LOOKING BEYOND

Economic and community development is never static, but an ever changing effort on the
part of both the public and private sectors. It involves those in the field of education,
workforce training, planning, utilities and infrastructure to ensure that a solid base exists for
the future of Loudon County’s citizens. The following points reflect the Board’s direction
for FY 2000-2001.

    •   Education is critical if we are to attract higher capital investment and above average
        competitive salaries.

    •   The low unemployment numbers for Loudon County, 3.1 percent for June up from
        2.5 percent in May, discourages the location of certain businesses which typically rely
        on lower than market wages, skills levels, and capital investment in technology and

    •   Our recruitment efforts should be directed towards expansion of existing industry
        and higher capital investment business locations that recognize efficiencies gained in
        investing in capital equipment and training for a highly skilled and educated

    •   Existing industry represents 80 percent of our community’s economic growth

    •   Quality versus quantity is essential to maintaining a stable economic climate for
        Loudon County.

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  •   Business location decisions are frequently based on reducing both construction
      schedules and costs.

  •   Internet marketing will continue to play a greater role in site location analysis
      especially with site location consultants.

  •   Revitalization of the downtown areas of Loudon and Lenoir City promote a sense of
      place and economic stability.

  •   Intergovernmental agreements maximize resources and promote local coordination
      and cooperation.

                               FY 2000-2001 FOCUS

      •   Interactive Web Site: Efforts to expand on the initial construction of the web
          site will continue this year, as the site will offer enhanced site selection
          capabilities. Development of a database for sites throughout the county will
          allow users to query properties based on certain attributes. Database information
          includes: utility, tax and ownership information, property maps, ortho-photos,
          topography, site photographs, and traffic counts.

      •   Construction Management Centre Seventy-Five: Complete improvements to
          the park per intergovernmental agreement with the County and City of Loudon.
          In addition to normal marketing efforts, the Agency will solicit efforts to
          construct a speculative building on the site to promote activity.

      •   Construction Management Career Center Project: The Agency will continue
          to serve in the capacity of construction management through the remainder of
          the construction schedule which is expected to be completed July 2001.

      •   Marketing/Recruitment: In addition to the enhanced web site, the Agency will
          work closely with the Tennessee Resource Valley, our regional marketing partner,
          State of Tennessee, and contacts with site consultants to improve the County’s
          exposure. Site grading and completion of infrastructure at Centre Seventy-Five
          will assist in attracting interest to the area.

      •   Design Build Program: One of the more important factors in site location
          decisions involves the ability of a prospect to select a site and be in production
          within a narrow time frame. For this reason, communities have encouraged the
          construction of speculative buildings within the community. Under the design
          build concept rather than build a speculative structure a team is formed to
          develop a virtual building (on pre-graded site) complete with

LCEDA ANNUAL REPORT                                                                       8
         engineering/architectural plans, construction cost, construction schedule, and
         pre-approved local permitting. This approach avoids many of the delays
         associated with a typical construction project and eliminates the need to build
         and finance a speculative building.

     •   Lenoir City Car Works Redevelopment: The reuse of the Lenoir Car Works
         Site is a priority for the Agency and the community. The project will, in most
         likelihood, require cooperation from Lenoir City and the County, Norfolk
         Southern, and regulatory agencies involved in site remediation. It is hoped that
         an appropriate agreement can be reached during the year to allow redevelopment
         for industrial use.

     •   Commercial Development Assistance: The Agency will continue to provide
         technical and information support for commercial developments within the

     •   Existing Industry Program: Our existing industry program involves assistance
         in obtaining State grants, loans, and training assistance for expanding industries.
         Our plant mangers' meetings, which are held quarterly, will continue for the year.
         Programs will focus on State regulatory issues and personnel matters which local
         industry confront on a daily basis.

     •   Trade Shows and Trade Missions: Activities include four to six trade
         missions/recruiting trips to targeted cities with direct flight connections from
         Knoxville, participate with State Economic and Community Development and
         Resource Valley in trade missions within the United States and abroad and
         improve contacts with site location consultants

     •   Downtown Redevelopment: Continue to promote the revitalization of the
         downtown areas for Lenoir City and Loudon with the focus on stimulating new
         capital investment in businesses and construction/renovation.

     •   Matlock Bend Development: The Agency will continue to serve in the role as
         the local liaison with the developer and project manager in this 1400-acre mixed-
         use, residential/commercial, waterfront golf community.

LCEDA ANNUAL REPORT                                                                        9

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