Governments: $100K incentive never went to Mikesell’s, as closing loomed

Dayton potato chip company had been poised for expansion and grant; today, plant remains for sale

As the former Dayton production plant for Mikesell’s Potato Chip Co. remains for sale, Montgomery County and city of Dayton officials recently noted that they held back economic incentive dollars that had been slated for the company when it seemed ready to expand last year.

Montgomery County had approved $100,000 in ED/GE (Economic Development/Government Equity) funds for the snack foods company, before the business closed its doors in February this year.

But Dayton and county officials say the potato chip producer never received that money.

“We knew there was some uncertainty,” Keith Klein, senior development specialist with the city of Dayton, said in a recent interview. “They had to kind of put the (expansion) project on pause. We were just waiting to kind of see what they hoped to do. It was a surprise to us when they announced the closing.”

“The city, we never took the money,” Klein added. “If projects don’t happen, the money never changes hands.”

“The city of Dayton reached out to us and said the project was not going to move forward,” said Tawana Jones, Montgomery County’s community and economic development director.

At no point was a check approved for Mikesell’s, Jones said.

Communities apply for county ED/GE funding on behalf of companies moving to or expanding in Montgomery County. There are typically dual funding deadlines for a pair of funding rounds, in November and April, in which communities may apply.

Mikesell’s announced its closing and then, a few days later, said it struck a brand licensing agreement with Zanesville, Ohio potato chip producer Conn’s. The license agreement is of indefinite duration, and allows Conn’s to make Mikesell’s-branded chips.

Enfield, Conn-based Capital Recovery Group, a private equity firm that handles industrial assets and real estate, lists the Mikesell’s 333 Leo St. property among its “upcoming auctions.” A sale date for the Leo Street property is listed as “TBD” or to be determined, with the property also identified as “for immediate sale.”

Capital Recovery Group did not respond to a request for comment.+

Klein’s recollection was that Mikesell’s declined to accept the ED/GE grant “due to the changing circumstances.”

This happened before word circulated in late January and early February that the snack food producer was shutting down its Leo Street plant.

But it had been clear from conversations between the city and the business that Mikesell’s was in a “wait-and-see situation,” Klein said.

“We were just kind of on hold,” he said. “I mean, we were having ongoing conversations about it. It’s fair to say that we were aware of concerns. But that’s not uncommon in these situations, especially when the markets are very dynamic like they are now.”

Jones said it’s up to communities to track the hiring, retention and construction aspects of any planned ED/GE expansion within their borders. “They’re going to confirm that the work was completed, she said.

“It’s not really company to county,” county spokeswoman Kara Hamby said of ED/GE interactions in general.

According to county rules, once notified of approval, the jurisdiction must provide a current work program and budget for the project to county development staff.

A resolution and contract are prepared for approval by the Montgomery County prosecutor’s office. Once approved, the agreement is submitted to the jurisdiction for signatures and then to county commissioners for passage.

The county expects projects to be under contract and under construction within six months of the award date or the applicant must apply to the ED/GE Advisory Committee for re-authorization of funding.

Project improvements must be completed within 24 months of the award date.

The county offered two other examples of communities “clawing back” ED/GE funds in recent years.

Starwin Industries in Kettering was set to receive $150,000. That changed when the company was acquired, county officials said.

In Englewood, Value Added Packaging was in line for $80,000 in 2017. That was derailed once the business decided not to expand.

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