By Scott Robertson
What follows is a synopsized timeline of the discussions between Dentsply Tulsa Dental’s site consultant, John Austin of Ernst & Young, and the economic development entities that have been working to convince Dentsply to expand its Johnson City operation instead of moving it to Oklahoma. The timeline was compiled using emails obtained from the Washington County Economic Development Council (WCEDC) through a Freedom of Information Act request and from Washington County Mayor Dan Eldridge, during his Feb. 4 news conference.
Alicia Summers
Photo by Jeff Keeling
October 17, 2014 – A group of local and state economic development officials meet with Ernst & Young’s John Austin, the Nashville-based site selection consultant working on behalf of Dentsply. The delegation includes Alicia Summers, business development director for the WCEDC; Iliff McMahan, Northeast Tennessee regional director for the Tennessee Department of Economic and Community Development (TDECD); Matt Garland, business development consultant for TDECD and Tim Tidwell, economic development specialist at TVA. Austin stresses the need for confidentiality, saying 250 jobs are at stake. He says the company will invest $8 million to $10 million and create 25 new positions if it stays put. He tells the economic development delegation, however, that Oklahoma is competing with them for this retention/expansion project, and is offering cash up front. Austin says a location for the expansion will be selected by December 2014.
October 20 – Summers emails a summary of the Oct. 17 meeting to WCEDC CEO Mitch Miller, who brings County Mayor Dan Eldridge into the loop the next day.
October 22 – Eldridge responds to Miller’s concerns over the Oklahoma offer with what becomes the basis of the local proposal. “My initial thought,” he says, “is to have the IDB purchase the $1mm building for Dentsply and offer very favorable lease terms.”
November 21 – Austin tells McMahan and Garland the company needs to make a decision within “the next couple of weeks” and says, “timing is of the essence.” Austin also makes the point that the project is “extremely confidential.”
November 24 – Austin emails Summers the company’s TVA application and confirmation of the two scenarios the company is considering. Both scenarios begin with an outline of the current state of the Dentsply plant in Johnson City. According to the documents, total gross wages for all 189 employees are listed as $5,941,144.65.* In the first scenario, the company would create 25 jobs over five years, each with an average wage of $15/hour. The company would make a capital investment of $16,598,514. In the second scenario, the company would create 75 new jobs. It would make a capital investment of $19,850,000. Austin tells Summers, “The company wants to move quickly in finalizing its evaluation of Tennessee and Oklahoma.” Austin reiterates the company’s desire for confidentiality.
November 25 – Tidwell emails Austin to assure him that TVA will disclose nothing to the public.
December 8-12 – Mitch Meredith, a county commissioner and CPA, and Eldridge tweak the offer details. At one point, Meredith asks Eldridge, “How solid is your assumption that building can be had for $1 mill? I can’t see Caroline (Scharfstein) selling it for less than appraisal ($1.5).”
December 12 – At 4:29 p.m., Summers emails the proposal letter to Austin. Within 45 minutes, Austin emails back asking what alternatives exist in case the company wants to simply buy the building outright instead of leasing it.
December 17 – Austin asks for details on the terms of the contract regarding hiring, investment levels and clawback terms should the company not meet those. That evening, Austin calls Summers with still more questions. What if the company wants to add on to the building? What if it wants to tear down the building and build a new one?
December 31 – At 2:15 p.m., after vetting it through Miller, Eldridge and Tom Trent, an attorney specializing in such matters, Summers sends Austin detailed responses to his questions. Austin calls Summers back within the hour. At 3:29 p.m., she emails Eldridge and Miller to let them know the company, “continues to be intrigued by our offer” but that it is still evaluating the building for possible expansion. The Oklahoma building, she says, is newer and nicer. The company, she says, has signed a non-binding letter of intent to purchase the local property, which will allow the process to continue. The company now says it, “would rather not rush anything through the process.”
January 5-27, 2015 – Two county committees, the county commission and the county IDB approve the incentive proposal. At the January 26 county commission meeting, Eldridge says the company has stated it plans to make a decision within two to four weeks.
February 4 – Eldridge responds to public outcry over continued confidentiality by releasing documents that name Denstply as Project X. Those documents contribute to the compilation of this timeline.
February 23 – With the company’s stated two-to-four-week time frame having passed and multiple Freedom of Information Act requests in hand, the WCEDC releases the documents that make up the remainder of this timeline. As of this printing, Dentsply has not apprised the WCEDC of its plans going forward.
* The $8mm payroll figure often used in association with Project X was arrived at by taking the company’s average hourly payrate for all full-time employees, both salaried and hourly of $20.43, multiplying it by 40 hours per week, by 52 weeks per year, by 189 full-time employees.
