Due Diligence: Natural Gas Services Group
In March of 2008, the MDC doled out $275,000 to Natural Gas Services Group to lease a corporate headquarters in Downtown, employ some people for that office, buy a building in the County, employ some people there, and do a whole bunch of improvements to both locations. Their time limit for doing these things expires in 2011.
So, with a year to go how are they doing? Well, they have leased office space in Downtown Midland, but that may be all they are on track to comply with.
Employment:
- employ at least 10 new full-time employees for its corporate office before 2011 at $380,000 in annual salary and wages.- employ at least 39 new full-time employees for its operational facility before 2011 at $1.5 million in annual salary and wages.
According to NGSG Investor Presentations there were 259 Employees as of September 30, 2006, 296 employees of NGSG as of December 31, 2008 and 217 employees as of June 30, 2009.
From their high in December 2008, they have cut 79 jobs. This doesn't look to good for a total employment increase of 49 over their March 2008 employment (which I suppose was somewhere between 259 and 296).
Improvements:
- invest at least $500,000 in purchases and improvements for the office and $4 million for the operational facility.
The only way I know to evaluate this metric is to look at the taxable values of these facilities and see if they have risen by the amounts required, because the increase in property values is always sold to the voters as a part of the return on the public investment.
According to the Midland Central Appraisal District, For the downtown office (ID P000205785), in 2009 it had a taxable value of $123,000. For the operational facility (ID R000008595), prior to purchase in 2008, it had a value of $520,560 and in 2009 it had a value of $1,129,370. Not exactly $500,000 and $4 Million.
So with a year to go to comply, employment at NGSG is down by about 40 employees company wide, they need to invest about $377,000 in their downtown office and about $3.5 million in their operational facility.
Any bets on them meeting the terms?
0 TrackBacks
Listed below are links to blogs that reference this entry: Due Diligence: Natural Gas Services Group.
TrackBack URL for this entry: http://www.jessicaswell.com/cgi-bin/mt/mt-tb.cgi/2880
14 Comments
Okay.
So has the question now become "Of all of the MDC deals, who is actually still in compliance?"
Mr S.A. ,
My best guess as to who's in compliance would be..........(Drum Roll)............ Those businesses already established in the Basin that really never had any intention of leaving !
Probably people who love this little corner of the world ( as do we )and try to make it just a little bit better.
That's who I'd put MY money on Mr. S.A. ..then again WDIK .
What is it about my comments that can entirely kill a string . Do I smell ?
Personally, the craziness from Washington has taken a lot of the heat and passion out of our local issues.
Everybody is keyed up over Washington, and with the MDC being pretty quiet in the last year (save the parking garage) few seem to get concerned.
But hey they want to build a building at ClayDesta. Things are looking up.
Blakely:
You're joking, right?
Nope. They want to team with a couple of alternative energy companies and Midland College to build a Center for Energy Innovation & Commercialization.
Ospurt ! Is this more "Energy Innovation" like "Mining the Cosmos" "Flatulance Farms" and "VooDoo" ?
I tend to be a tad leery of things like Energy Innovation for profit.
Then again , I am ,after all..Old .
why not just rename the CEED the CEIC and be done with it?
Bob - CEED belongs to UTPB and now Midland College wants one of their own. A name change will never suffice. And who cares who pays. Midland must always have more and better.
MDC will not be building a building!!!
Anonymous - From the story linked in the comments above:
directors of the Midland Development Corp. indicated on Friday they might finance or at least coordinate the construction of a Center for Energy Innovation & Commercialization on the north side of town.
They might not be the one to build it (like Entrada A), but they are open to financing it, which means our local tax dollars went into the construction of the building.
To say they are not building a building is just splitting hairs.
You bet current MDC leadership wants this. They want a new home and a building in the name of economic development gives them this.
Just look at the strategic plan, the only difference is they weren't going to get that verticle business park downtown. That wasn't going to happen. They are going to plan B.
If this building goes up, the first tenant will be the MDC. Bet on it.
Thank you again Ospurt .
IMAO I believe the MDC and it's clients get into problems because the do not have a business , but a SOCIAL relationship.
They court the client to come to Midland like , if they do ; weeze gonna be the bestest friends evah !
When they do come , with wallets full of our money, they consider us hicks with NO business savvy ...because we ACT like it... as we are deathly afraid to make anyone mad by asking for OUR MONEY BACK!
I have a feeling that the people who made the concessions to the incoming business ALSO had continuing social relationships with the incentees , making asking for money ,er , Awkward .
But what do I know anyway .