The Powell City Council passed a resolution that will pave the way for the owner of Gluten Free Oats LLC to buy out the city’s interest in the property — a transaction that will be …
The Powell City Council passed a resolution that will pave the way for the owner of Gluten Free Oats LLC to buy out the city’s interest in the property — a transaction that will be completed at the end of the month.
The company has operated the location in the Homesteader Industrial Park off Washington Street, under a long-term lease with the city.
Since 2010, the state and city have provided the company over $1.7 million in grants that went toward the purchase of the land, as well as developments. The grants were intended to be loans, which would be paid back over time through leases the company had with the city for the use of the property and facilities, which the city owned.
The overall goal was eventually the company would pay back the grants and take over ownership of the property and factory.
The first leases in 2011 were just under $2,000 per month, and as the company received further grants for more development, the monthly lease payments grew to approximately $5,500.
In January 2010, the Wyoming Business Council approved a $450,000 Business Committed Grant for GFO to build a new facility to clean and process oats, which were previously shipped to Idaho to process.
Through the city’s economic development fund, the city provided $108,000 toward the project, which included $50,000 in matching funds required for the WBC grant and $58,000 to purchase the land.
The original bids for the project came in 25% higher than the engineer’s original estimate. The following year, Wyoming State Loan and Investment Board awarded GFO an additional $267,795 to cover the extra costs. This included a 10% match from the city, which was met with in-kind engineering work amounting to $29,755.
In 2014, SLIB provided another $946,404 grant, which the city administered, for an 8,000 square-foot warehouse facility. This provided the company additional grain storage facilities, as well as a grain receiving entrance.
To satisfy legal requirements for public property sales to private entities, the property was appraised earlier this year at $600,000. The appraisal doesn’t include some of the improvements, such as the grain elevator.
In July, the council approved selling the property to GFO for $742,500.
Once complete, the sale includes 2.16 acres of land on two parcels located southeast of Washington and Jones streets. Included in the sale are all the improvements that were done with the public funding.
The agreement was set to expire on Dec. 31 and was contingent on GFO owner and CEO Dale Tenhulzen getting financing.
At its Dec. 7 meeting, the council unanimously passed a resolution giving Mayor John Wetzel authority to sign the warranty deed and statement of consideration at closing.
It wasn’t clear at this month’s meeting whether Tenhulzen still intended to go through with the buyout.
“We’re just being proactive and ready, so that when or if a closing date is set … we’ll be ready to go,” said City Attorney Sandra Kitchen.
However, City Administrator Zack Thorington said after the meeting that Tenhulzen has since been in touch with the city and intends to move forward.
Tenhulzen purchased the company from the Smith family sometime in the spring. He also owns Mother’s Hemp Farms and operates the Living Wealthy Institute. According to its website, the institute “specializes in teaching people how to turn taxable and tax-deferred monies into tax-free income.”
Gluten Free Oats started as a small home business producing gluten free foods. Celiac disease runs in the Smith family, and at the time such products were difficult to find. Later, the Smiths grew the business to tap into a growing market.
Last May, Seaton Smith presented to the council a proposal to buy the property and facilities from the city. Smith said the company needed to secure private financing in order to grow further in what has become a highly competitive market.
If the company would have continued making lease payments over the next 29 years, it would have paid about $1.5 million.