MATRIC Gets First $100,000 Check
City of South Charleston provides support to help create jobs
Charleston Daily Mail
April 15, 2009
http://www.dailymail.com/Business/200904150043
by George Hohmann
Daily Mail Business Editor
SOUTH CHARLESTON, W.Va. - South Charleston Mayor Frank Mullens handed Keith Pauley the first of five $100,000 checks and said he hopes Pauley's organization never has to pay back a dime.
The city's loan to the Mid-Atlantic Technology, Research & Innovation Center (MATRIC), which Pauley heads, has an unusual feature: Every dollar MATRIC generates in city business and occupation tax will be deducted from the loan's principal.
South Charleston plans on loaning MATRIC $100,000 each year for the next five years. MATRIC has 10 years to generate tax revenue to offset the principal.
Mullens said the loan is all about creating jobs.
MATRIC is headquartered in the South Charleston Technology Park. "We're grateful for all of the support the city has given us since we started five years ago," Pauley said Tuesday at a meeting of the South Charleston Economic Development Authority at the city's Little Creek Country Club.
MATRIC's goal is to hire as many Dow Chemical researchers as possible as Dow downsizes here. Pauley said MATRIC has already created 150 high-wage jobs and spawned nine businesses. "You're going to see a significant tax base from these companies," he said. "The investment you are committing allows us to have the cash to hire these scientists and meet payroll."
Paul Arbogast, chairman of MATRIC, said any growing business requires a lot of cash. He said MATRIC must write proposals and, if it wins a project, it must ramp up and begin work before any money starts coming in. "It's a very front-loaded business," he said.
Pauley said the government assistance is especially welcome in a "difficult credit market. I applaud the mayor and the city council for being visionary. Thank you very much for your support."
Prior to the meeting Pauley said MATRIC expects to wrap up an agreement by the end of the month with the state's venture capital fund, the West Virginia Jobs Investment Trust. The trust is expected to take a $2 million ownership stake in MATRIC.
The Charleston Area Alliance already has an ownership stake of about $200,000 in MATRIC and has extended a $250,000 line of credit. Pauley said Kanawha County has decided not to provide $500,000.
Pauley told the South Charleston leaders that MATRIC has doubled its employment every year but won't this year because of the recession. It is expected to do about $10 million worth of work this year and grow by 10 to 20 percent. "In this market that's incredible," he said.
The recession has not only affected MATRIC, it has impacted MATRIC's customers. "At the end of 2008, we had collected every dollar in invoices," Pauley said. "This year we won't be able to do that."
Contact writer George Hohmann at busin...@dailymail.com or 304-348-4836.
