Marble Falls EDC loses money on CorWorth deal

CONNIE SWINNEY • PICAYUNE STAFF

MARBLE FALLS – What started as a deal for a potential vocational school and an eco-friendly carmaker ended with a private corporation that makes outdoor public restroom kits purchasing a building from the Marble Falls Economic Development Corp. for $1.4 million, officials say.

But the selling price fell short of covering the costs of the initial purchase and renovations.

CorWorth Building Systems on Sept. 15 closed on the 77,000-square-foot Colt Circle property it has occupied for the past two years as a tenant of the Marble Falls EDC. The company started with three employees and grew to more than 40 during that time.

“For us, it’s permanence. It means we’re going to be here and continue to produce products. We’re just real pleased to get to this stage, and we’re not going to be looking for a home in the future,” said Howard Worthing, president of Public Restrooms Facilities LTD and CorWorth Building Systems.

CorWorth inked a deal with the EDC after the nonprofit city agency cut ties in 2011 with Ronn Motor Co., an eco-friendly car products manufacturer that moved to Houston.

Officials say the burden of owning and renovating the building as well as finding a suitable tenant proved challenging until CorWorth arrived.

The following is a timeline of key events, cost and activity surrounding the Colt Circle building:

  • 2009 — Marble Falls EDC purchases the 1707 Colt Circle property for $1.5 million
  • 2009-10 — Ronn Motor Co., an alternative auto manufacturer, occupies a portion of the 77,000-square-foot building
  • 2009-10 — The EDC launched renovations of a showroom and front office portion of the Colt Circle building, formerly a candle factory, for $1.5 million
  • 2011 — The EDC cuts ties with Ronn Motor Co. as the company fails to meet performance agreement terms
  • Feb. 1, 2012, to present — CorWorth of Reno, Nev., occupies the building
  • Sept 15, 2014 — CorWorth closes on the purchase of the property for $1.4 million

Even though the EDC paid more than twice for the property and renovations than for what it was eventually sold, officials believe they achieved a return on the investment in other ways.

“We certainly had responsibilities financially to upkeep the building, pay taxes on it. So with the sale to CorWorth going through last week, the EDC is relieved of many of those responsibilities,” said EDC Executive Director Christian Fletcher, who emphasized a previous EDC administration and board were involved with the Colt Circle building’s initial purchase and early missteps.

“I don’t know that you say there’s a positive out of the strictly financial situation on the real estate transaction, but in terms of the role of economic development, the jobs that were created, we had to offer some concessions in order to allow CorWorth to develop their employee base.”

The option to buy involves a $6,400-per-month payment for 20 years with 4 percent interest, he said.

CorWorth paid a down payment of about $183,000 and earned rent credits that totaled approximately $160,000, Fletcher said.

As a tenant, the company had paid the EDC $4,000 per month to $12,000 per month, depending on improvements they made to the facility.

In the two-year span of occupancy by CorWorth, the company alternated between layoffs and a regrowth in employment numbers.

“We had a little bit of a slowdown. That was really a change of investor and vision,” Worthing said. “It took a little while to get the pieces in place. Now that we have, we’re floating right along.”

CorWorth officials say they expect to add more employees as the company continues securing contracts for the sale of the kits, typically sold for outdoor venues and parks, which employees make on site.

“Having this location and shipping to locations in Texas, in Michigan and bidding a lot in Florida, it was very difficult to work in the central U.S. or eastern U.S. from Reno, Nev.,” he said. “We knew we were going to move a lot of our sales out of California into the Texas market, and we’ve been able to successfully do that.”

connie@thepicayune.com

6 thoughts on “Marble Falls EDC loses money on CorWorth deal

  1. Hmm. So that is a lose of 1.6 mil or so. Yep sure sounds like a winner.Nothing like losing tax payer money. After all its only OPM.

  2. IF this were a business, he would have been fired long before now. Who supervises or approves these expenditures?

    His explanation is all smoke and mirrors the numbers simply don’t hunt!

    1. The approvals are done by the Appointed EDC board of directors I believe.. You know these are the ones who are appointed by the city council members.These college educated types know what they are doing or at least that is what they claim.

  3. EDC purchased the building knowing it did not meet current city codes, then spread more tax money to their construction buddies to update the building. Next they play footsies with con man Ron Motors twice. Then is sounded like they finally got their ethics together, but now they give away a large manufacturing facility in a prime location for less than half the cost they spent taxes on. I question the comments about EDC paying taxes on the property, as just another smoke screen. I won’t get into their spending $3 million dollars on their three story palace for themselves to sit in and look down on the poor dumb citizens.

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