Snack company seeks grant

June 24--Junction City-based puffed corn snack maker Cosmos Creations is seeking an $85,000 grant from Lane County to help the company expand production.

The Lane County Board of Commissioners is poised to vote on the grant this morning.

The money would come from state video lottery funds that Lane County receives and that are earmarked for economic development.

The county's economic development staff said the company qualifies for the money under the Lane County Business Incentive Program. The county ranks applications on a variety of criteria, including whether the business is in a targeted industry "cluster," how many jobs it is creating, whether its wages and benefits total 150 percent of median income, and whether the expansion and hiring would occur regardless of the assistance.

The board of commissioners has the final say.

Cosmos in its application said it would use the money to buy a "baked extruder" machine to allow it to ramp up production. The company said that with the machine's output, Cosmos would add 15 full-time jobs, ranging from entry-level production jobs to management and sales positions. The company said it offers employees health insurance but no retirement plan.

The company would proceed with equipment purchase and jobs expansion even if it did not receive the county funding, the county said in its report to the board.

Company CEO John Strasheim on Monday disputed that, however. "We wouldn't be able to go ahead, not at this time," with buying the machine, he said in an interview. If the company doesn't get the county grant, it won't buy the machine, he said.

The company in its application said it wants the grant because it wants to acquire the equipment without having to take on debt for it.

Strasheim said earlier this year he plans to begin construction later this year of a $4 million, 135,000-square-foot factory in Junction City that over several years could hire up to 150 workers. The company already has space elsewhere in Junction City and employs 55 workers.

Strasheim said he needs more space to increase production and warehousing of his sweet and salty corn snacks, which are sold nationwide. In its application, the company said it is already at maximum output with its existing equipment.

The county in its review of the Cosmos application said the created jobs would have wage/benefit packages that "equal 150 percent of median income." Cosmos' application letter doesn't state the value of Cosmos wages and benefits. Strasheim on Monday said he did not have those numbers available.

County staff were not available Monday to clarify what value the Cosmos compensation package would need to be in order to meet the threshold desired by the county. The U.S. Census does not appear to publish a "median income" for Junction City or Lane County. The median is at the midpoint, with an equal number above and below it. The Census does list a "median earnings for workers" figure for Lane County: $22,278 in 2012. The Census also says Junction City's per capita -- or average -- income was $18,560 in 2012.

In its application, Cosmos said its sales hit $2.7 million in 2013, and that it was anticipating sales of $12 million this year.

"We believe our national and international sales ... will bring in millions of dollars into Lane County as our business continues to grow. We will continue to produce our products in Junction City," wrote Cosmos Chief Financial Officer Kyle Dixon.

Cosmos has had "initial talks" with the state about using Oregon'sCredit Enhancement Fund for the expansion, said Mark Zolton, spokesman for Business Oregon, the state's economic development agency. The fund guarantees repayment on loans that businesses take out from banks or other lenders for equipment purchases or the like.

"We are ready to consider any request from Cosmos for further business finance assistance," Zolton wrote in an email. By backing a loan, the state program makes it safer for a lender to provide funding to a borrower.

The state has previously provided Cosmos two loan guarantees, once in 2012, and once last month, Zolton said. The state in December also provided Cosmos a low-interest loan from the Oregon Business Development Fund, he said. The two guarantees and the loan totaled about $1.5 million, Zolton said.

Follow Christian on Twitter @ChristianWihtol . Email [email protected] .

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