Teachable Moment

Rush Limbaugh uses the phrase often. A teachable moment is an unplanned opportunity to learn a lesson.

Last week I shared the News Herald story of the company that folded up and went out of business. Chinese company, Innovative Pet, a maker of dog treats, didn't even make it a full year before they were up and gone. Normally, this would be something that we might all think unfortunate and not good for the community and that's correct. But in this case, it's worse than you might know.

Back in January of 2017, county commission voted, 9-1,(guess who the one no vote was), to give the new, upstart company $10,000.00 to make certain utility upgrades to their building, $10,000.00 of tax payer's money. I think Loudon city chunked in another $8,000.00 in the deal.

It was said that the company would invest 7-10 million dollar in the county, hire up to 100 people at high wages. I think I even remember the famous government phrase, a win, win for everyone. Yeah boy. The only winner was whoever got the $10,000.00. And to add insult to injury, the $10,000.00 was not suppose to be given to the company till they bought the building. Guess what, they never bought the building but somehow got the money. I'm trying to find out how that was possible and working to get the $10,000.00 back.  

The teachable moment here is, all that glitters is not gold. You can't believe everything somebody tells you.

$10,000.00 is a lot of money to give away for nothing in return. Let us learn from this for the future.

Below are some of the stories from the News Herald over the last couple of years about the now defunct business. Read through them and see how easily some government officials can be talked out of your money. 

Commission mulls new business

Jan 11, 2017

Loudon County Commission last week approved up to $10,000 to be used for utility upgrades for a business looking to potentially locate in Blair Bend Industrial Park.
 
Loudon County Budget Director Tracy Blair said the business, known as Innovative Pet, manufactures cat treats and was looking to make a $7-$10 million investment in Loudon County. As a project incentive, the county and city of Loudon would split the cost for an upgrade in electrical, water and sewer for the building at an estimated cost of $17,600.
 
The agenda item was approved 9-1, with Commissioner Van Shaver opposing, but not before commission discussed the environmental impact it would have on the county.
 
“This afternoon I had a conversation that was a very promising, extremely promising,” Loudon County Mayor Rollen “Buddy” Bradshaw said. “I can’t set here and say it’s a lock.”
 
Loudon County is in direct competition with another site in Kentucky, Bradshaw said, noting the business would add 30 jobs at $14 per hour. He said the company was “heavily” leaning toward Loudon County.
 
Commissioners believed the building being considered by the company has been empty since around 2007.
 
Commissioner Kelly Littleton-Brewster said she wanted to see the company provide an environmental impact study and a report on its financial stability.
 
“It’s an existing industry,” Bradshaw said. “There are some sister companies that are (in) China, Cambodia, it seems like there is one in North America but I do not remember where. This is a — it’s a new one to me.”
 
Requesting an environmental impact study might result in Innovative Pet leaning more toward locating in Kentucky, Commissioner Bill Satterfield said.
 
Bradshaw said one of the first items discussed when broached about the possibility of moving to Loudon was the aroma that would come from the plant and was told the only potential smell coming from the facility would be roasted chicken, which would be minimal.
 
“These people buy only a certain grade of chicken,” Bradshaw said. “... They’re wanting to use chickens with certain levels of antibiotics in it, and I think that may be part of the draw is we’re right here close to two of the biggest chicken producing markets in the United States within, I guess, an hour drive at the most, and so I understand. I don’t mind getting to ask for the environmental study. If they’re so picky about the antibiotics in the chicken they use for pet treats, no less, then I think the risk would (not) be environmentally unsound, but I’ll be happy to ask for that.”
 
In a follow-up interview, Bradshaw said he first became aware of the business 8-10 weeks ago through a broker. He said Innovative Pet’s owner was Chinese and did not speak English.
 
“The company is solid,” Bradshaw said. “Now have I seen that on paper? No. Everybody I’ve talked to has said this is a solid company. ... The company’s solid, and I think with them willing to enter into an agreement and if they changed their mind and back out before they were up and running, that they would give our money back, I think that tells me a lot of things.”
 
Commissioner David Meers motioned and Commissioner Henry Cullen seconded to allow the county to spend up to $10,000 for utility upgrades contingent upon Innovative Pet fully committing to Loudon and purchasing the building. Littleton-Brewster initially aimed to amend Meers’ motion to require more information on the company, but she eventually withdrew her motion.
 
“My point on this was if we went ahead and did the work and then they didn’t come, we’d be in the collection business and that isn’t going to work out,” Cullen said.
 
Hopes are to have additional information on the business at the workshop later this month, Bradshaw said.
Shaver said he felt the project incentive set the wrong example.
 
“This is setting precedent that we’re pretty much going to give people, anybody that moves into Loudon County with any business, money,” Shaver said. “I can never get in my mind how this pans out for the masses. It may be great. I’m tickled to death having a Chinese cat treat company move in, but we don’t need to be paying certainly if we’re doing anything we’re giving discounts on land or stuff like that.”
 
In a follow-up interview, Loudon City Councilman Jeff Harris said council in December favored giving up to $8,000 for the city’s portion of the split. No vote was required because City Manager Lynn Mills is allowed give up to $10,000.
Pet food manufacturer to open

Although unsure when the company will begin operations, Bradshaw said a “realistic goal” will be either spring or early summer. Hopes are for the company to initially hire 30 workers and eventually boost that number to 50, he said.
 
“I think it’s great not just for Loudon city but for Loudon County as well,” Bradshaw said. “I think anytime we have that opportunity to bring jobs is just an incredible opportunity, and this one’s kind of unique to me. This is the first one I’ve really been in on from the word go. A lot of times you have some of these projects that they’re very top secret, I guess for lack of a better term, but they’re kept very low key and usually when I’ll find out about it will be somewhere in the process.”
 
Loudon County Commission in January approved up to $10,000 to be used for utility upgrades. During the meeting, Budget Director Tracy Blair said the cat treat manufacturer was looking to make a $7 million-$10 million investment in Loudon County.
Loudon City Council in December was in favor of providing up to $8,000 for the city’s portion of the split.
 
“The time they make all the improvements and changes to the property to place them on there and get them up and running it’ll probably be late spring, early summer,” Lynn Mills, Loudon city manager, said.
 
“... The main thing is I believe there’s some sewer line work that has to be done to make sure that they dispose of their waste properly. The way they do it is not usual for this area, so we have to work there, and there’s some electrical work that needs to be done, upgraded, to get the amount of power that they need.”
 
Bradshaw previously said the county was in direct competition for the company with a community in Kentucky.
 
“I think just our willingness just to work with industry as well as our location (led to the company choosing Loudon),” Bradshaw said. “We’re poised right here at the (Interstate) 40 and (Interstate) 75 corridor I think just makes us very convenient, and I think the success businesses have had locating here (made Loudon appealing). I think that just made us a very viable candidate and hopefully helped us land the industry.”
 
Bradshaw said the company should make an official announcement in a couple of weeks.
 
Mills said bringing another industry into the city can only be good for the area since it adds more jobs to the workforce.
 
“I think it’s a wonderful opportunity,” Bradshaw said. “I’m still digging around and just finding some facts out about them and everything’s positive. It’s going to be a low-impact environmental-wise. The biggest thing is going to be smell of roasted chicken, and it’s going to be very minimal if at all on the outside of the plant. The inside of the plant is food quality, cleanliness and so that tells me a lot right there.
Qualls discusses incentives request

News-Herald Mar 15, 2017

Loudon City Council discussed utilities incentives for Innovative Pets during a workshop Monday, which was requested by Loudon County Mayor Rollen “Buddy” Bradshaw.
 
“The number of the utilities has grown from $16,000,” Jack Qualls, Loudon County Economic Development Agency executive director, said.
 
New numbers total $10,000 for sewer, $10,000 for water and $7,500 for an electrical upgrade, with discussions including the city and the county splitting the $20,000 for sewer and water by paying $10,000 each.
 
The Blair Blend fund could potentially be used toward the electrical upgrade of $7,500, City Recorder Stephanie Putkonen said, with county commission already passing a resolution to pay $10,000 toward other expenses.
 
“I think it’s something we maybe need to define better for the future,” Jim Greenway, Loudon mayor, said. “It all comes down to jobs. ... We’re looking at about $2,000 more than what we previously discussed.”
 
If the $10,000 split between the city and the county is not agreed upon during next Monday’s meeting, the decision will need to go back to county commission.
 
“We still have a remaining balance to replace,” Qualls said. “I can invoice the city for $10,000. I can invoice the county for $10,000. The remaining $7,500 may come out of the Blair Bend fund.”
 
Greenway expressed concern about it costing $2,000 more than originally planned. “It’d be either that or it would have to go back to the county,” Putkonen said.
New Innovate Pets getting underway

Dog and cat food producer Innovate Pets in the Blair Bend Industrial Park in Loudon should increase production by the end of the month.
 
Company representatives acquired the roughly 30,000-square-foot facility at 210 Williamson Drive in March and have since worked toward getting operations in order.
 
Chatchai Lertviwatkul, Innovate Pets general manager, said the business launch has gone well, with the understanding there would be challenges to get equipment and employees in place.
 
“Our partner here, they helped look around what is a good place to start doing this in (the) U.S.,” Lertviwatkul said of why Tennessee was suitable. “They said specifically in this area in Tennessee it’s quite good because ... the government tries to bring the business into the area, so they have a lot of subparts.”
 
The company is a joint venture between Innovate International Group and Siam Inter Pacific Co., Ltd., in Bangkok, Thailand. Innovate Pets joins Innovate Manufacturing in Hardin Valley in the U.S. under the Innovate International Group umbrella. Three additional locations are in Asia, including Siam Inter Pacific Co.
 
Lertviwatkul said the focus so far has been on making samples for customers, but production will soon ramp up.
 
“We plan to slowly order every month and we have a lot of customers, which we plan to — we are going to a pet expo in March. There is a big event about (the) pet industry here in Orlando,” Lertviwatkul said. “So we hope that we will get more and more customers.”
 
Innovate Pets now boasts seven full-time employees and 10-15 part-timers. Plans are to bring more on board as the company grows, Lertviwatkul said, noting up to 100 could be hired if maximum production is reached with eight machines.
 
He said production focuses on injection-molded treats. Six products can be made at the plant, but hopes are to add more with time.
“The product that we produce has simple ingredients,” Joyce Tipton, Innovate Pets buyer/marketing specialist, said. “We can make a product ranging from only a few ingredients and these ingredients there are several grades. Like human food, there can be an all-natural, organic or just a regular and traditional from the local area. So the core business we try to support local business as much as we can, not to outsource too much, and if possible we want to make 100 percent made in the USA, but sometimes there are some ingredients that we have to import.”
 
Two injection machines are on site, which Lertviwatkul said will allow the company to make about 5 million pieces per month with the ability to go to 10 million.
 
“This operation I have in Thailand with my family, in Thailand we started almost 35 years ago, and over there we have seven machines. We hope that we could do the same here,” he said. “... We plan to have eight machines here totally, so that means we can increase a lot.”
 
Innovate Pets could make a $7-$10 million investment in the county, Tracy Blair, county budget director, said in a January 2017 Loudon County Commission meeting.
 
“What makes this one I guess kind of special to me is this is one that I’ve handled from the front end all the way up to getting up and going,” Rollen “Buddy” Bradshaw, Loudon County mayor, said. “Jack Qualls (Loudon County Economic Development Agency executive director) came in the later stages there to help me close it out. These folks had wanted to talk to me and deal with me and I was glad to do it and glad to land them and bring them in. Even though it’s not going to be a huge employer right off the bat, it has that capacity to grow.”
Innovate Pets closes facility
 

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