City OKs Performance Agreement with Manufacturer
7/2/2016 by Korry Rogers
Tags: The Ada News
Lovera Grocery’s plans to upgrade its Ada cheese-making plant received a boost Tuesday from the Ada City Council.
Acting as the Ada Public Works Authority, the council voted 3-0 to approve a performance agreement with Lovera, a Krebs-based company that has opened a production facility at the Pontotoc Technology Center’s business incubator. Councilman Bryan Morris and Mayor Guy Sewell were absent.
Under the terms of the agreement, the city will pay Lovera a $28,343.40 cash incentive to help the company maintain and expand its Ada plant. The city will use part of the proceeds from Proposition 2, a special sales tax for economic development projects, for the incentive.
In return for the cash incentive, Lovera has agreed to add at least nine employees to its payroll over the next five years. Those employees will be paid an average wage of at least $18 per hour, which does not include performance bonuses, and receive benefits valued at approximately $2 an hour.
The agreement requires Lovera to submit annual reports on whether the company has hit its employment, payroll and benefits targets for the year. Those reports are due by Jan. 31 of each year, starting in 2017.
If the company fails to reach its employment goals for any specific year, it will repay the city $5,668.68.
The U.S. Food and Drug Administration has told Lovera’s that it cannot continue making cheese at the Ada plant unless it replaces the floor, where the paint is chipping off, said Jenny Cypert, business and industry director at the Technology Center. She said the company’s interest in remaining in Ada set the stage for the performance agreement.
“Lovera’s wants this for the long term,” she said. “That’s what they’re interested in doing, because our cheese plant that we have over here is a little bit more modern than the cheese plant they have in a different location in the state.”
Cypert said Lovera’s will buy its milk from local dairy producers, which will also help stimulate the area’s economy,
Lovera cheese-maker Shawn Duffy said the company’s production has been relatively small, but its cheeses have won national and international honors. He added that the company is hoping to produce even more award-winning products at the Ada plant.
“We’re really looking to expand,” he said. “At this point, we have a lot of interest in the cheeses we’re making here.”
Duffy said Lovera’s works with dairies and other businesses in Oklahoma, and he thought the company’s agreement with the city would lead to additional economic activity across the state.
Councilman Greg McCortney said the agreement was another example of using Proposition 2 dollars to promote economic development.
“This is what Prop. 2’s supposed to do,” he said. “The fact that we’re creating jobs to source local products, which creates more jobs, which puts more money back into our economy. The multiplier effect here is pretty impressive.”
Vice Mayor Preston Draper added, “It’s a relatively small request to make a positive impact as well, I think, which is something we’d like to encourage.”