COPPERAS COVE — Two businesses that expressed interest during an Economic Development Corporation trip to California have backed out of their proposed arrangements with the city, and political issues between city officials and the EDC may be to blame, a former EDC employee said.

Referred to by code names Project Metal and Project Edge, the businesses went from hot to cold in a short span of time. Many factors could be to blame for the companies’ disinterest, but former EDC Director Monica MacKay, who resigned from her position last week, speculates reductions in funding and a lack of communication between Cove and the EDC may be the cause.

“There were monetary compensations discussed but not awarded,” MacKay said about incentives offered to the businesses.

MacKay said both firms specialize in manufacturing and would employ 25 to 30 employees each. She did not name the businesses.

A Daily Herald reporter called city officials several times this week, asking for comment from the city manager and to confirm the businesses did indeed back out. City officials did not respond.

The amount of money given to each company would have depended on economic impact analysis, said the former EDC director.

MacKay said much of her time over the past two years was spent on the phone with clients, and she’s noticed that questions about political issues were frequent. MacKay said the issues don’t give companies a lot of confidence in moving their businesses to Cove.

“These companies pay attention to the community, such as reading the local newspapers, and sometimes they know more about the local community than you do,” MacKay said.

The firms call local companies and ask what it’s like to do business in the community. They often get more open responses than she might, MacKay said.

Concerns about a possible change to a Municipal Development District and lack of communication among city leaders are issues that were brought up, MacKay. Heated exchanges and breakdowns in communication between the City Council and the EDC caused concern.

EDC board member Jack Smith and Councilman Matt Russell exchanged words at a meeting in June. Smith was upset with what he thought were unfounded accusations about the EDC.

Cooler heads prevailed, and afterward, Smith and Russell shook hands and spoke. Municipal districts, which Russell has said he supports, were being discussed at the meeting. Russell also spoke about municipal districts at a council meeting in May.

During another meeting June 17, Russell differed with Bradi Diaz, chairwoman of the EDC board, about transparency. Diaz said EDCs are required to be more transparent in how they operate than a municipal district would.

Fireworks once again erupted between the City Council and the EDC on Aug. 16, with the council approving in a 4-to-2 vote a measure to place EDC employees under the control and direction of the city, including having the executive director report directly to City Manager Andrea Gardner.

City leaders sparred over the direction of the EDC and communication between the two entities, with Diaz saying she was “disgusted” with the current council’s attitude toward the EDC.

Board members Marc Payne and Jack Smith expressed dismay with the council. Both said the EDC received mixed signals and directions from city officials.

Council members also accepted the resignation of Place 4 Councilwoman Marty Smith, who left her seat Aug. 11, citing dissatisfaction with other council members and the city manager.

“Disagreement with some of the goals and philosophy of the city manager and several City Council members has hindered my performance and negated my ability to assist in furthering the goals that have been set by previous councils,” Smith said in a letter to Mayor Frank Seffrood on Aug. 11.

“In my opinion, it would have been better if all of these people would have gotten together and talked rather than having a back-and-forth during meetings. All sides have valid points, but the meetings don’t really provide an avenue for open discussions,” MacKay said.

MacKay said the bottom line is that businesses want to know how they can make a bigger impact in the community.

“This is somebody’s real money, and they’re going to try to take as little risk as possible,” MacKay said. “It’s my job to help them mitigate those risks.”

MacKay said she tries to look at issues from an outside perspective, as how potential businesses may see them. Companies worry about the negative impact from their decision to do businesses in the city.

“That’s how the businesses I deal with see things. That way I can comprehend what the businesses are looking for,” MacKay said. “And in my opinion, if it appears that the EDC and the city don’t get along, that doesn’t look good. It really is unfortunate.” | 254-501-7464 | 254-501-7464

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