Microfactory project development continues

On this episode of the Post Podcast Grow Hays executive director Doug Williams shares updates on their Microfactory project.

 

Transcript:

EDITORS NOTE: Transcripts are provided by an automated service and are not verified for accuracy.

 

James Bell 

The microfactory project continues to develop in Hays Grow Hays, Executive Director Doug Williams that stops by to share the latest on this episode of the Post Podcast.

 

Grow Hays executive director Doug Williams 

This all started a few years ago with a group out of Manhattan called the technology development institute, Division of Kansas State University that focuses on manufacturing. And they put together a grant request for 10 locations across Kansas, that would be micro factories. And what those are basically incubators for manufacturers to start in, grow in and then move out that grant application was not successful. And so when the base grant became available in Kansas to build a stronger economy, I believe is what base stands for. We applied with that same concept for a 30,000 square foot structure, that would be an incubator for manufacturing companies. And we were successful in acquiring a $2.63 million grant for the construction of that facility. Since that time, we have received a donation of land from Heart of America Development Corporation at the corner of ninth and commerce Parkway, which is the lat directly between Glassman Corporation and the Army Reserve center on commerce Parkway. And that's where this facility is going to be constructed. We've also engaged a local contractor, commercial builders to assist us in building the structure. And we're working with an architect out of Manhattan on the preliminary plans and trying to get all the specifications and that kind of thing together. Essentially, it'll be a 30,000 square foot building built to it'll be manufacturer friendly, you know, high ceilings and accessible areas, capable electrical loads, and all the things that manufacturers might need to start their business and grow their business.

 

James Bell 

Very cool. Very cool. So, you know, I was wondering if that launch day, I know this can sometimes generate some conversations and some questions. Did you have any good input or questions about the project there?

 

Grow Hays executive director Doug Williams 

Well, I think that the first question everybody asks, well, who's going to go in there, and we don't have anybody specifically that we have committed to go in there, you know, we have a couple of prospects. Interestingly enough, the last Friday, when I wasn't here for our session, I was actually in Manhattan with at a meeting with the architectural firm, as well as the technology development institute. And they indicated to us that this is a relatively new concept and kind of the eyes of Kansas are upon us on this, a lot of people are watching this process and are going to be very interested on how this works. Because if it does, they want to replicate this in a number of other places across Kansas. The other thing they said, which was very encouraging to me, was that a lot of manufacturers, this is a big struggle for them finding a facility that's friendly to what they need, and a lot of may be willing to relocate to a community like Hayes, if we had the right facility for them. So that was encouraging. And a, they don't think we're going to have any trouble at all filling the space, their concern is that we're going to have to be fairly selective as to who we let go in there. Because the whole concept is, you want a company that's going to start in there and grow. But in a three, maybe four year period of time, they're going to outgrow it and need their own facility. And, you know, their concern is don't put people in there that are going to put down roots and want to be there for 20 years, because that's not the intent of this facility. So that's going to be a challenge for us. But one of the one of the benefits is that they're going to be in there at about half or less of what it would cost them to be in their own facility. Not to mention, a lot of the value adds that we're going to bring to them, which is some support from people like the technology development institute, the technology department at Fort Hays State, the SBDC and helping them develop business plans and, and all the things that go along with owning and operating a business aside from just space space is part of it, but there's a lot more to it than that.

 

James Bell 

Yeah, absolutely. Do you know, you know, off the top of your head, like how much you might be able to cut down a business's, you know, startup funds with a project like this?

 

Grow Hays executive director Doug Williams 

Well, if you just take a 30,000 square foot building and you divide it by five tenants, that's 6000 square feet per tenant. If a if a business was going to go out and build a 6000 square foot facility, they could spend upwards of a million dollars doing so. So that's one thing they don't have to do in terms and to build it. Manufacturer friendly. You know, cost more money than that. We're going to try and have some common areas like loading dock and some things like that that will help if Five businesses can use it instead of one. You know, that's we're spread out over five people. So it, it's a large reduction in what they would have to spend normally to get into business for sure.

 

James Bell 

Excellent. You know, yeah, no, it's a manufacturing industrial. And that's a little different, a little new, as you say. But it, you know, it strikes me as the same kind of model as what we've seen in co working spaces, just like you did your very own brief space.

 

Grow Hays executive director Doug Williams 

It is similar to I mean, it is an incubator for businesses, just different types of businesses. And one of the things I talked about at the quarterly luncheon is that, that our community has traditionally been a white collar community, you know, we have the university, we have the hospital, we have USD 489, those are the three largest employers in the county. And those are primarily white collar jobs. We don't have a lot of manufacturing in our community, we have some certainly, but we don't have a lot. Part of that is because of the long standing challenges we have with water. In our community. Today, it would be there are certain manufacturers of certain types of businesses that we can't handle because of water. But we also have workforce problems. And one of the things the the microfactory allows with small manufacturers, as these people can grow incrementally. And it's not like somebody's coming to town and they need 200 employees, day one, they may need three or four or five, day one, they grow over time. And we can we can help them with the workforce grow incrementally instead of all at once. And that that I think is going to be very positive for our community because we just, we just aren't in a position right now to recruit a large employer, we just don't have the the employees to do it. And we're not alone with that lots of places are in that same situation. But certainly this is a better way to approach it.

 

James Bell 

Yeah, and I gotta believe that doing it this way, you maybe doesn't save a lot of money. But it eliminates some of that risk. I think about a few years ago, Brian, Brian, after a right before the pandemic kind of kicked off, there was a business trying to move into Russell. And I don't remember the exact figures, but I think they got about a million dollars in economic stimulus money to help start that up. But because it was an expensive proposition they moved in. But they found that really, it didn't work. But that wasn't until after they had spent all that money and they tried to get there when they're like, this isn't going to be feasible. And if they had a facility like this, they could have maybe saved a lot of them funds,

 

Grow Hays executive director Doug Williams 

I would think so yes, that was an unfortunate startup that didn't work out and a lot of money was invested in lost by the community. This, this is a different approach, this does start much smaller. And we don't know how the building might be sliced and diced, there might be one needs 10,000 square feet, there might be three others that need 5000, and then one that needs to that 2500. You know, we we don't know for sure. But we're going to have that flexibility. And it absolutely decreases the risk of all the people involved not only the business, but also us. At the end of the day, if all else fails, we're gonna have a 30,000 square foot facility that somebody can use and has value. So this is significant, the construction process will be good for the community in terms of employing people for the construction process materials purchased, all of those things will will be very positive locally. Very cool.

 

James Bell 

So I'm curious that, you know, it's been a while since we've had any updates on this. You know, I think the last time we talked you were still trying to find a little bit more money to get this thing finished off or getting it off the ground. I guess maybe it was a better way to say it. I wonder if you want to share any updates there.

 

Grow Hays executive director Doug Williams 

As far as how we're going to pay for it?

 

James Bell 

Yeah, there was a little there's a little bit of money left, right, because you got the big grant and the land grant. But now

 

Grow Hays executive director Doug Williams 

we we anticipate a $3.5 million cost. And the base grant provided $2.6 million. The land donation was $275,000. So there's still a shortfall there. We have applied for some other grants, we haven't gotten a couple of them, but we're still applying for others. At the end of the day, we're either going to have to borrow the money and pay it back over time is probably what we would do. We will have revenue from the building from rents, they're going to pay as I said, they're going to be paying about half what they would normally pay but there is going to be rent coming in from that. And we're going to continue to look for other grants and other sources of financing to help pay for it. But worst case scenario we've we've got to it's a good thing. We have a lot of local banks that are willing to lend money on good projects and and we'll we'll borrow the balance if we have to.

 

James Bell 

Absolutely and long term planning you do foresee this as being an not to money maker, but at least revenue neutral, right?

 

Grow Hays executive director Doug Williams 

Absolutely. We it needs to pay for itself. And we need to pay for the operation of it and that type of thing. And the goal here and one of the reasons why Heart of America was willing to donate the $275,000 lot is because they own the 72 acres To the east of this current development, and they are in the business to promote commercial development in our community. And that's exactly where we would like the people that graduate from our microfactory to need facilities and wool will put in a facility for them where they can build their own, to the east there and some of that hard American land and, and this process just continues itself over and over again. That's the goal. That's what we hope happens.

 

James Bell 

Very cool. I'm wondering, is there any updates on like, the timeline, the construction efforts? The is the building going up? I don't think anything started yet is it not started

 

Grow Hays executive director Doug Williams 

yet. Still Still working on the actual specific blueprints and plans. I am optimistic for a lates, I'd say a false start. And we got two years from the date this grant is, from the day we signed the grant agreement, which should be in the next two weeks, we got two years to get this project done. That would seem like more than enough time, but things come up, you know, in this day and age of supply chain issues and that kind of thing. There's lots of challenges there. But we hope to start probably in the fall and hope to complete it. Nine months or so later. So some time about this time next year, I'd love to be talking about our grand opening and that type of thing. So very cool. That's our plan.

 

James Bell 

Now the city infrastructure is in that lot already. Right? The water, sewer, all that.

 

Grow Hays executive director Doug Williams 

It is, that's one of the fortunate things is at Heart of America a number of years ago, put in the street, they put in the water, the sewer, electrical, gas, all of those kinds of things are there. That lot is in the economic development business, we call that shovel ready, which means it's ready for somebody to come in and and start doing some things. So that's another very positive aspect of it.

 

James Bell 

Okay, you know, I'm curious, what other feedback did you receive about this facility at

 

Grow Hays executive director Doug Williams 

the launch? And, you know, there's, there's lots of questions as to what's it going to look like? And how's it going to be? What's going to be inside? And how are you going to handle things, and some of that's still up in the air. And one of the things they that surprised me was the group of TDI said they don't anticipate there being necessarily any walls in there to separate one group from another. And that kind of, I'm having a little trouble wrapping my head around that. But they said, you just do the Les Nessman tape on the floor. And this is your space. And it does allow for if you've got larger material pieces or that type of thing, you aren't confined by wall spaces by getting it moved around and whatnot. So I don't know how that's going to work. That's that's that that was, like I said, I'm having trouble getting my head around exactly how that would work. In my mind, I had, you know, six different individual spaces with walls between them, each having an overhead door and that kind of thing. And that's not necessarily how this will be. So we're, we're working through some of that kind of thing. That's why we want to get it right on the front end, spend a little time on the planning side of things. So that we don't have to make a lot alterations later.

 

James Bell 

Yeah, I mean, I can see that I can see like an error of kind of collaboration to you know, when you guys get to tinker into things and try to figure out problems where hey, maybe come over here and look at this. And then the next week he's helping with the other project

 

Grow Hays executive director Doug Williams 

sure could be an end, a lot of this equipment that they put in there are very expensive and different types of manufacturing processes, CNC machines that are computer operated and they they do cutting and plasma cutters and that kind of thing. In the end. I just, I just hadn't quite visualized it that way. So it's going to be interesting to see how it develops. But the one thing they said down there, they said manufacturers are creative and they're resourceful. They're resilient. And they can he said to you wouldn't believe some of the facilities we have customers and operating out of he said this will be so much better than what they're trying to do. Because a lot of time it's it's in the guy's garage or a shop out back or just some space he can find someplace but certainly not conducive, and as efficient as it might be. If it was designed up front for that specific purpose. Sure.

 

James Bell 

Well, Doug, we've got just about a minute left. Anything else you want to hit on about this microfactory project before we

 

Grow Hays executive director Doug Williams 

go, I think just keep keep your eyes open. We're I was gonna go out and put a sign up on the on the lot, but it's a ways away from the street. I'm not sure anybody could see it if I put it up. But it's, it's between Glassman and the Army Reserve center on Ninth Street. And just keep watching. We'll keep everybody posted either on our website or on our weekly show with you as to what's going on or a Facebook page. And it's going to be exciting.