A lease agreement that ties reduced rental fees to job creation could seal the deal on a Raleigh- based toy company opening a manufacturing facility in Tabor City.
Tonight, Columbus County commissioners are expected to approve an agreement with Gann Memorials LLC.
The firm, founded in 1999 by Chris Gann, makes custom plush toys and plans to move operations to the former Brunswick Electric incubator in Tabor City Industrial park within 90 days.
Full-Time Jobs
The rent is conditioned on Gann creating at least 12 new full time jobs between now and the end of 2016 and additional fulltime jobs in 2017.
The contract calls for 13 new full- time jobs in 2018 and 14 additional fulltime jobs in 2019.
“Obviously I would love to have 50 jobs in place by the end of next year but a lot of it just really depends on the demand,” Gann said.
“There is a lot of interest in American made toys. They are very few, far and in between.
“Most of the toy jobs have moved oversees and I wanted to bring it back.”
Gann said he plans to hire skilled labor for sewing work, general labor in shipping and will have employees to manage inventory.
$10 an Hour
Average wages will be roughly $10 an hour for general labor. Management positions will be salaried.
“We have not done a lot of advertising about this facility,” Gann said. He is hopeful for a “huge influx of business in the next six months.”
He said 50 jobs by 2019 is a “conservative estimate. I would love to see something much greater than that. I have a lot of goals for this facility.”
Gary Lanier, Columbus County economic development director, said most of the jobs will not require a college education.
“This is a way to meet the needs of all Columbus County citizens not just a select few,” Lanier said.
It was “a group effort” that pulled the project together, Lanier said. He credited BEMC, Diane Ward, Tabor City promotions director, and many others for their help.
In all, should Gann sublease the building without exercising its option to purchase after three years and after creating 50 jobs, it would pay the county and Tabor City a total of $312,000 in rent over a ten-year period.
The rent incentive is new to Columbus County but Rick Edwards, president of the Columbus Jobs Foundation, believes it is a worthwhile.
“This is a company that has the ability to grow,” Edwards said.
‘Seals the Deal’
The low-cost rent “seals the deal,” he said.
“The low-rent factor increases their cash flow and increases their ability to increase product. With more product they can hire more people,” Edwards said.
“We just think that’s a fair approach,” County Commissioner Trent Burroughs said. “It gives them an opportunity to get on their feet and hopefully create a lot of jobs.”
Burroughs anticipates the agreement will be accepted mostly “as it is” but thinks there is going to be “some tweaking.”
‘Off guard’
“I know there is a purchase cause that caught us off guard,” Burroughs said.
County Commissioner Ricky Bullard said he was not in favor of Gann Memorials having an option to buy the building in three years at $150,000. The sale should be negotiated separate of the agreement and "not obligated" he said.
“I’m okay with the rest of it,” Bullard said.
Edwards and other leaders first met with Gann in March in Tabor City.
Tabor City’s proximity to the coast played a role in its appeal to the firm, Edwards said.
Skins for the plush toys are imported so proximity to a port was important, Gann said.
Clients
Gann’s ability to create jobs is tied to his firm’s ability to land clients like Disney, Google, Eddie Bauer and Nintendo seeking custom plush toys.
Edwards said Gann is working to land a new contract that would ramp up normal production levels by “thousands of pieces.”
The Tabor City facility has sufficient storage space and can enhance the production capabilities, he said.
“I’m tickled this thing is going to Tabor City,” said Edwards, who is fairly new in his role leading the Columbus Jobs Foundation (formerly known as the Committee of 100).
He sees the recruitment of a company to the area as a reflection of the non- profit economic development group’s commitment to broadening its efforts to encompass all of Columbus County.
No Charge
The firm will sublease the 18,000 square foot at no charge for six months.
The lease payments increase over the 10-year life of the contract to as much as $5,000 a month.
The Town of Tabor City and Columbus County will lease, with an option to buy, the facility from BEMC Rural Consumer Services Corp, which holds title to the property. In two-years, the county and town may purchase the building for $150,000, with $36,000 in rent going toward the purchase price.
Gann Memorials will sublease the building from Columbus County.
After three years and the creation of 50 full-time jobs, the firm may also purchase the property for $150,000.
Gann will pay no rent to the county and Tabor City for the first six months, under the contract.
Gann will pay $500 a month in months seven through 12 with the rent gradually increasing to $5,000 a month during the last two years of the lease.
In the second year (months 13-24) Gann will pay $1,000 a month. In the third year, the rent increases to $1,250 a month or $15,000 annually.
The fourth and fifth years, (months 37-60) they’ll pay $1,500 a month. In years six, seven and eight the rent increases to $3,500 per month. In the last two years of the lease, the rent reaches $5,000 a month.
About Gann
Gann markets their company as a provider of custom plush that is a “unique alternative to traditional souvenirs or fundraising efforts.”
Companies and organizations have marketed their brand image through Gann that has included teddy bears, animals, aliens, pinatas, robots, cars, puppets, and even children’s furniture.
“In most cases, if you can dream it, we can produce it,” the company website reads.
A gallery of current and pending designs includes more than 115 samples of the company’s work.
The gallery includes, among others, political plush from the 2012 National Republican and Democrat conventions, a Crayola man, a Bret Michaels doll, a Kia Soul Hamster and Google Android plush.
Gann said kits that include a book and plush toy have recently grown in popularity and that his company can offer book publishing and plush to customers.
“We do the printing in China but assemble the kits here,” Gann said.
Some of Gann’s latest work includes the creation of the 15-foot tall plush Stark Bunny that appeared in the Iron Man 3 movie.
Marvel Studios contracted with Gann Memorials to produce the custom rabbit.
It earned the company a spot in a recent exhibit at the state Museum of History, he said.
Gann also has produced Mensch on a Bench dolls that grew in popularity after Neal Hoffman’s creation was featured on the reality television show Shark Tank.