TBS, Such A Deal! (update)

TBS, Such A Deal! 

After this troubled company of ill repute received a nearly four year rent free use of a facility that cost the city over $500,000 they decided to move on to Alaska. The promise of a hundred jobs and proposed million dollar purchase of the building on Nelson is written on the wind. Observers opine that only 5 to 20 employees ever worked at the site. The company was often in arrears on its maintenance and utility charges but they are now current.

History:

On August 1, 2011 the City of Wilmington, the owner of the property formerly known as the Ledex plant on Nelson Ave, signed a lease and purchase agreement with Total Baking Solutions (TBS) most recently of Roundup, Montana.

Relevant information follows:

The Deal:

Wilmington News Journal

3/17/2011 11:15:00 PM City proposes lease-purchase with TBS

A proposed lease-and-purchase agreement between the city of Wilmington and Total Baking Solutions regarding a former Textron facility calls for $1 a year rent during a lease term expiring on New Year’s Eve 2016, and a $1 million purchase price afterward. Total Baking Solutions (TBS) of Roundup, Mont., officially announced on Feb. 28 it would establish manufacturing operations in Wilmington at a former Textron plant on South Nelson Avenue. TBS is a manufacturer of industrial-size ovens. The premises to be leased are all 113,000 square feet of building 2 of the former Textron facilities which the city owns. If TBS wishes, it can accelerate the purchase option but a purchase cannot be made prior to the end of the remediation period for the brownfield site, said Wilmington Mayor David Raizk. While discussing the proposed agreement at Thursday’s city council meeting, Raizk revealed that TBS was offered a plant for free in Michigan. “We were able to work this deal because our location was a little better and a couple other things that were good,” the mayor said after the council session. “There are tons of industrial space all over this country that’s empty,” added Raizk. The agreement says it is TBS’ responsibility to pay the facility costs for insurance and utilities. The bill for utilities during the winter is about $20,000 per month, according to Raizk. The oven company will be responsible for the maintenance and repair of the premises. Wilmington City Councilman Rob Jaehnig said TBS already is engaged in roof repair, wall repair and adding offices. A jobs creation incentive was built into the proposed agreement, where the purchase price would be decreased for jobs creation. The agreement says the principal owed by the company will be reduced by $250,000 if, during the five years preceding the maturity date of the note, TBS has employed on average no fewer than 100 people at the Wilmington location on a full-time basis. The note will mature five years after the closing date. If TBS exercises the purchase option, it will buy the property within 30 days following the New Year’s Eve 2016 expiration of the lease term. During public comment, former city councilman Scott Kirchner asked questions focusing on whether the city had written precautions within the agreement in the event TBS goes out of business. Stressing he hopes like everyone else that TBS succeeds, Kirchner asked whether the city has required TBS to take out bonding insurance that would make the city whole on the actual value of the property during the lease term if TBS were to close. Raizk said TBS cannot bond what it does not own, and that the city cannot sell the building until the end of the remediation period, including a time of monitoring and testing after the actual cleanup. History: Year in Review Sunbaked Biscuits replaced Alamogordo Daily News By Michael Becker, Managing Editor Posted:   01/01/2008 12:00:00 AM MST http://www.alamogordonews.com/ci_7853007?source=most_viewed One of the most contentious stories of 2007 was the implosion of local cookie maker Sunbaked Biscuits. The company went belly up early in the year and disappeared amidst a flurry of lawsuits…………. By mid-January of 2007, Sunbaked closed its factory and informed its creditors it was seeking a buyer. However, the company at first said production had halted due to a damaged conveyor belt. The lawsuits quickly followed…………Sunbaked and its owners, Dave and Chris Roberts, aren't out of the woods yet. Three lawsuits against Sunbaked in District Court, brought by Delta Systems, Plastic Packaging Technologies and Consolidated Electrical Distributors, are still wending their way through the legal system. Allegation: By a Michael Morris Jun 21, 2011 http://www.topix.com/forum/city/alamogordo-nm/T5DNB5CEOAIU12RS4 Tularosa, NM  Some of you may remember the Roberts Family of Roundup, Montana that scammed over $2 million from the taxpayers of Alamogordo  [New Mexico] in the Sunbaked Biscuts scheme. The Roberts are at it again in Wilmington, OH changing little more than on their website. Here the local paper [Wilmington News Journal] explains the rock solid deal to get a former industrial building owned by the city in a jobs deal to bake cookies. http://wnewsj.com/main.asp... Total Baking Solutions, LLC (TBS) Phone: (937) 383-3750Fax: (937) 383-3401474 S Nelson Avenue, Wilmington, OH 45177info@totalbakingsolutions.comhttp://www.totalbakingsolutions.com Principal: Mr. Dave Roberts, Owner Notes: Prior to the 8/1/11 signing date of the City/TBS contract the administration was advised by a disgruntled family member of the company owner’s family that alleged that all was not on the up and up with the Company and that they had a bad track record. He cited the history of the principals at other locations including New Mexico (see above). Some of you may remember the Roberts Family of Roundup, Montana that scammed over $2 million from the taxpayers of Alamogordo  [New Mexico] in the Sunbaked Biscuts scheme. The Roberts are at it again in Wilmington, OH changing little more than on their website. Here the local paper [Wilmington News Journal] explains the rock solid deal to get a former industrial building owned by the city in a jobs deal to bake cookies. http://wnewsj.com/main.asp...  As of 6/1/13 the best estimates of observers of the TBS facility is that fewer than 20 employees are working there. If the estimate accurate TBS would have to average 160 employees over the next three years in order to qualify for the $250,000 purchase credit. If, as it appears likely, there will be no purchase the sewer fund that paid around $600,000 for the city’s portion of the original property purchase will receive a grand total of $5.00 for the effort. Comments from a presentation to Council at the 1/3/13 meeting: Paul Hunter – 200 Randolph Street – gave a presentation regarding the TBS contract with the city for their facility on Nelson Avenue, in the wastewater building. He explained that the company pays a $1 per year rental for the building that the sewer department contributed over a half million dollars to purchase. He said the expectation in the five-year lease was the company would employ 100 workers and the income tax receipts would make up for the free use of the building. He said that he estimates that they only have around 20 employees and are almost two years into the contract, which is much lower than expected. He said that number of employees would generate about $900,000 in annual wages or around $9000 in income tax to the city, which is far short of the $550,000 that the sewer department has spent on that property. He added that TBS can, at the end of the 5-year period, exercise an option to purchase the building for $1 million or simply walk away and find another distressed city to set up shop on a 5-year plan. He said it was his opinion that the city should be talking to the company and attempting to modify the agreement or seek some legal form assurance that TBS is committed to purchasing the property and/or increasing employment to the 100-jobs level that they promised. Paul Hunter contact paulhunter45177@gmail.com