$2M incentives package offered to Project ‘Cupcake’; 170 new jobs on horizon

By Joel Phelps
The Arkadelphian

A U.S.-based company could bring upwards to 170 new jobs in Clark County if it accepts a $2 million incentives package from the Economic Development Corp. of Clark County.

Called “Project Cupcake” because of a non-disclosure agreement between the company and economic developers, the company has narrowed its search to three locations, one being the old Danfoss property in the Clark County Industrial Park in Gum Springs. The other two locations are out of state.

The EDCCC discussed its terms at length during an hour-long public meeting Tuesday in Arkadelphia. Based on the  average wages promised by “Cupcake”, the EDCCC’s current guidelines allowed $1.53 million in incentives but members voted unanimously to raise that figure by half a million dollars based on the company’s starting salaries and capital investment. The state has also offered incentives but that amount was not disclosed at Tuesday’s meeting.

EDCCC chair Kevin Jester said the project was given its name because of the proximity to the holiday season; its name does not imply anything other than that. “It could be a steel mill” and still be named “Cupcake”, Jester said.

It’s a project that is “moving quite quickly,” Jester told the 15-member panel, adding company officials have visited Danfoss on two occasions and performed some “serious inspections” of the building. Because of the non-disclosure agreement, Jester was unable to dish out many details but did note the company is an American-based existing business. “What they are looking to do is come in and have 170 jobs created and $100 million invested in getting their project up and going,” Jester said. The $100 million includes the purchase of the building, at $11.5 million, as well as $26 million in renovations and $62 million worth of equipment.

Jester said state officials are “very excited” about the project and deemed it one “very much worth pursuing. … The state is very interested in getting this company here. There’s a lot of enthusiasm behind it.”

The state had made contact with local officials with the client’s request for incentive proposals be submitted by the end of the day Tuesday. With such a tight deadline, EDCCC members fired off several key questions of concern.

Allen Morgan inquired whether the EDCCC could impose a time frame with a renewal clause. Jester said the state’s package requires a 90-day timeline for getting the project moving forward. “I would suggest anything we do be on the same page,” he said.

The EDCCC, Jester explained, won’t simply be writing a $2 million check to the company but rather financing equipment, reimbursing for infrastructure improvements and other items such as job training.

Elton Buck asked about the company’s credentials: “Is this a company that has been in business for years? Financially everything looks great?” Jester replied: “It’s a highly recognizable name.”

Buck asked whether the ongoing rail spur project in the industrial park would be an asset to the company. Jester said a rail spur wasn’t required for this company but it “always [is] in possibility of expansion.”

Brian Kirksey asked if the company guaranteed a certain time of being in business. Jester said there’s never a guarantee with any business regardless of its size, but emphasized his opinion that it “would be a company that would be here a considerable amount of time, especially [considering] the kind of money they’re talking about spending. I don’t think they’re coming for a short period of time.”

Stacey Marlar asked if there is a timeline for the company beginning its operation after locating in Clark County. Jester said the company explained to him that 20 employees would be added in the first year, followed by 120 in the second year (along with $26 million in renovations), and the final 30 employees being added in the third year.

Other members asked how “Cupcake” lines up with other prospective industries currently interested in Clark County. Jester said the Arkadelphia Alliance is still in talks with “Yellow Pine”, a project that could require a “substantial incentive from us” but assured there’s plenty in the EDCCC’s coffers to cover other incentive packages. 

Referring to “Cupcake”, Jester said, “With a building already constructed, the site already ready … this is about the fastest project that could put employees to work as far as anything that we’re working on.” He added “Yellow Pine” could take up to three years before operations began.

With the $1.53 million originally on the table for approval, some further discussion spurred the panel to amend that figure to $2 million. Morgan’s motion to amend the figure got a second from Tim Kauffman, and the decision passed unanimously.

Jester said Project “Cupcake” has told the state it would choose a location within about 35 days at the writing of this article.

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