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Boonville —
Dear Boonville,
One coffee. Black. No sweetener, said the Moberly city officials.
I would imagine a missed interest payment, a downgrade in the credit rating of bonds and a state investigation don't make for too many restful nights.
That the city of Moberly is likely sweating the sweet stuff because it issued $39 million in industrial development bonds to build a plant for an artificial sweetener company, Mamtek, that is now trying to avoid bankruptcy makes a pretty safe bet. But for the the city of Boonville, which signed a three-year $300,000 agreement with the nonprofit organization integral in completing the Mamtek deal, what kind of taste did the economic development gone sour leave?
Moberly Area Economic Development has been in existence since 1988, but when the city hired the group in January to attract businesses to Boonville, the Mamtek project was its most recent score. On its website, it stated the manufacturer would create 612 jobs and invest $46 million in the Moberly economy.
Then construction on the plant stalled and the firm started laying off employees. It missed a $3.2 million interest payment in August, and now the city is hearing a debtor's promise from American Sucralose Manufacturing, a new company started by the former Mamtek CEO, that it will pay $250,000 by Monday and $3.2 million more in a month to cover the missed payment, the Columbia Daily Tribune reports.
If the Mamtek proxy does honor its agreement with Moberly and opens a factory that provides the jobs promised, then some of the damage will have been averted. The fallout of the bungled agreement, though, has created a ripple affect for other potential economic development and generated deserved scrutiny of the parties involved.
The first person to start asking questions was Janet Morales, editor and publisher of a weekly publication called The Moberly Mirror, the St. Louis Post Dispatch reports.
When the project was unveiled, she asked about the job projections and why Mamtek couldn't use an existing building. Her scrutiny, she said, earned her backlash from city officials who encouraged advertisers to boycott her paper. After a pause, she continued her research and couldn't find any evidence of a factory the company claimed to have in Fujian Province, China. Trade publications and competitors hadn't heard of the company and other cities approached about the factory had balked at the economic incentives the company wanted.
Her findings were printed in the publication's final edition. If there is truth to her claims that city officials pushed businesses away from her publication, count one unfair casualty among more to possibly come because of a lack of oversight on the Mamtek deal.
Dear Boonville,
One coffee. Black. No sweetener, said the Moberly city officials.
I would imagine a missed interest payment, a downgrade in the credit rating of bonds and a state investigation don't make for too many restful nights.
That the city of Moberly is likely sweating the sweet stuff because it issued $39 million in industrial development bonds to build a plant for an artificial sweetener company, Mamtek, that is now trying to avoid bankruptcy makes a pretty safe bet. But for the the city of Boonville, which signed a three-year $300,000 agreement with the nonprofit organization integral in completing the Mamtek deal, what kind of taste did the economic development gone sour leave?
Moberly Area Economic Development has been in existence since 1988, but when the city hired the group in January to attract businesses to Boonville, the Mamtek project was its most recent score. On its website, it stated the manufacturer would create 612 jobs and invest $46 million in the Moberly economy.
Then construction on the plant stalled and the firm started laying off employees. It missed a $3.2 million interest payment in August, and now the city is hearing a debtor's promise from American Sucralose Manufacturing, a new company started by the former Mamtek CEO, that it will pay $250,000 by Monday and $3.2 million more in a month to cover the missed payment, the Columbia Daily Tribune reports.
If the Mamtek proxy does honor its agreement with Moberly and opens a factory that provides the jobs promised, then some of the damage will have been averted. The fallout of the bungled agreement, though, has created a ripple affect for other potential economic development and generated deserved scrutiny of the parties involved.
The first person to start asking questions was Janet Morales, editor and publisher of a weekly publication called The Moberly Mirror, the St. Louis Post Dispatch reports.
When the project was unveiled, she asked about the job projections and why Mamtek couldn't use an existing building. Her scrutiny, she said, earned her backlash from city officials who encouraged advertisers to boycott her paper. After a pause, she continued her research and couldn't find any evidence of a factory the company claimed to have in Fujian Province, China. Trade publications and competitors hadn't heard of the company and other cities approached about the factory had balked at the economic incentives the company wanted.
Her findings were printed in the publication's final edition. If there is truth to her claims that city officials pushed businesses away from her publication, count one unfair casualty among more to possibly come because of a lack of oversight on the Mamtek deal.
Morales did the work that city officials, state lawmakers and Moberly economic development were supposed to have done. Regardless of what comes of the factory in Moberly, the question Boonville city officials must ask is why a small-town newspaper with limited resources was able to discover what Moberly Area Economic Development couldn't find — or didn't care to?
When the city approved the agreement with the development group in January, Fourth Ward Councilman Morris Carter provided the lone dissenting vote. He had concerns that the city couldn't opt out of the agreement on its own. The contract states that if the corporation is opposed to the city ending the partnership, the city needs to go to court to get out of the agreement.
Carter said Thursday he has faith in the ability of the development group to attract investment in Boonville despite the Mamtek deal.
“You would think they would do more research on the company before making a recommendation, but then at the same time, you would think the state would have done a little checking too,” Carter said. “I think everyone involved should have done a little more background work.”
The lack of oversight now has lawmakers scrambling to show they don't just haphazardly distribute economic incentives to developers. Proponents of a bill to provide tax credits for construction of an international freight hub in St. Louis must now answer questions about Mamtek.
“This Mamtek issue has really become the flashpoint of the special session,” House Majority Leader Tim Jones, R-Eureka told the Post-Dispatch. “I didn't know anything about Mamtek two weeks ago, and it's now become a real hot point for many of our members on both sides of the aisle.”
In the current, economic developers seeking state tax credits will likely face a track with more hurdles. If the state investigation implicates the Moberly corporation for its role in the Mamtek deal, attracting development to mid-Missouri will be especially difficult.
For now, the city of Boonville must wait to see if without the momentum of the sweetener deal, the economic developers can still provide a jolt to the local economy.
Contact news and online editor Eric Berger by calling 882-5335 or e-mailing eric@Boonvilledailynews.com.
