Grace Leong - DAILY HERALD | Posted: Monday, November 19, 2007 11:00 pm
Funds used to build new manufacturing plant at Mountain Vista Business Center
TONIGHT, PROVO CITY OFFICIALS WILL CONSIDER ISSUING $9 MILLION IN TAX-EXEMPT BONDS ON BEHALF OF ACTION TARGET, WHICH IS EXPANDING ITS MANUFACTURING PLANT TO THE 327-ACRE MOUNTAIN VISTA BUSINESS CENTER.
The money will be used to finance the building of the Provo company's new 100,000-square-foot manufacturing and assembly plant, which makes shooting-range equipment for military and law enforcement training.
If approved, the 130-worker company will get a 10-year, interest-free loan to buy 10 acres at Mountain Vista at a discounted price of $1.1 million. It also has an option to buy another 10 acres for $1.45 million. But that price will be cut to $1.1 million if it adds 100 more jobs after it relocates to Mountain Vista.
"The discount is the incentive they get for being the first company to build at Mountain Vista. This provides them an opportunity to grow, and keeps those jobs in our community," said Leland Gamette, Provo's economic development director.
Provo will acquire Action Target's property at 200 N. 1280 West for $2.65 million and pay $650,000 in relocation costs for the company's move to Mountain Vista. Around 1.25 acres of the property will go to Jones Paint & Glass for a planned expansion and the remaining 1.75 acres will go to Neighborhood Housing Services for a single-family housing project, Gamette said.
Action Target is expected to start construction of its Mountain Vista office and plant in early 2008, said Lee Stephenson, the company's chief financial officer. The project is scheduled to be completed by 2010.
He said the company chose to remain in Provo partly because of the economic development incentives it received from Provo city. Mountain Vista's proximity to Interstate 15 and the fact that many of Action Target's employees live in Provo were other reasons, he said.
Action Target is seeking approval from the state for Provo's issue of the tax-exempt industrial revenue bonds. The state Legislature determines the amount of tax-exempt bonds issued in Utah each calendar year, and this year, Utah's cap for manufacturing projects is $30.7 million, according to the Private Activity Bond Authority for Utah.
Provo will lend its tax-exempt status to Action Target and will not be held liable to repay the bonds if the company defaults.
The city's credit rating also would not be at risk.
"That's because we have a letter of credit from our bank, KeyBank, which is buying the bonds. The letter of credit ensures the city has no financial liability," Stephenson said. The bond issue is expected to close in January.
Dixon Holmes, assistant director of economic development for Provo, is also in talks with two other manufacturers to locate at Mountain Vista. All three companies are expected to occupy about 30 acres, make a combined capital investment of $15 million and generate about 470 jobs over the next three to five years, Holmes said.
These planned developments are part of the city's goal to put Mountain Vista -- a former brownfield that has been vacant for almost five decades -- back to productive use to create jobs and leverage private investment, Gamette said.
In September, Mountain Vista received a $2 million federal grant for infrastructure improvements. The improvements are expected to help create more than 1,500 private sector jobs and lead to $55 million in private investment from new businesses over the next 10 years.
• Grace Leong can be reached at 344-2910 or gleong@heraldextra.com.