Janesville loan will help United Alloy expand, add jobs

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Frank Schultz
Monday, November 25, 2013

JANESVILLE—United Alloy of Janesville will expand and add jobs with the help of a forgivable loan from the city of Janesville.

The city council approved the agreement at its meeting Monday night.

John Beckord, president of Forward Janesville, lauded city staff for its efforts to keep the company here, noting Janesville was "up against southern states."

"This was a competition," Beckord said. "Southern states can be pretty competitive. It's hard to make the numbers dance sometimes when you're up against the Carolinas and Alabamas of the world.

"Congratulations to all of you," Beckord said. "This is good for Janesville."

The agreement calls for the city to provide an incentive package worth $887,460. In return, United Alloy would double the size of its plant at 4100 Kennedy Road and add at least 40 workers by 2017.

The company now pays an average $15.77 an hour, said attorney Duffy Dillon, who represented the company at the council meeting.

The city's part of the deal would be financed through Tax Increment Financing District 25.

A TIF district uses the property taxes on the increased value of the property to pay off the city's costs. This deal includes:

-- The city gives the developer 7 acres of the industrial park located just south of the existing site. The land is valued at $191,625.

--  The city provides a 12-year, forgivable TIF loan to pay for construction of the approximately 112,500-square-foot expansion to the production facility at 4100 North Kennedy Road.

-- The loan also would pay for retention of 100 full-time employees and creation and retention of 40 additional full-time jobs after 2017.

The deal requires United Alloy to guarantee its property tax assessment would increase by $3.37 million as a result of the expansion, for an increase in annual property tax payments of at least $79,463.

“If United Alloy fails to meet any of the above requirements, they will be required to pay back all or a portion of their annual debt service,” according to the memo.

City staff and acting City Manager Jay Winzenz both agreed to recommend the deal to the council, according to a memo from the city's economic development office.

“United Alloy is a valued community partner, and their continued growth and success is an important piece of our economic recovery,” Winzenz said in the memo.

“United Alloy has experienced an extensive increase in sales, especially along the southeastern seaboard,” the memo states. “United Alloy has a large customer located in the Carolinas that is pressuring UA to move their operations closer to save on shipping costs.”

United Alloy provides custom metal fabrication and powder coating services. Its products include diesel fuel tanks and generator frames.

Dillon said company officials have decided to stay in Janesville and quickly build a new production/warehouse facility, doubling its current size.

Construction could begin as soon as December and finish by the end of next summer, Dillon said.

“They're chomping, and they're ready to go,” Dillon said.

United Alloy built its original 80,000-square-foot plant in 2003 with the help of a TIF agreement, according to the memo. That agreement included the purchase of 14.6 acres, construction of the plant, valued at $2.12 million, and 35 full-time jobs.

United Alloy entered into another TIF agreement with the city in 2012 to build an additional 21,000 square feet. The existing facility is valued at more than $4 million.

The agreement is between the city, United Alloy and Tom Baer, managing member of North Woods Holding, Manitowish Waters.

North Woods Holding has common owners with United Alloy, Dillon said. The holding company owns the land and leases it to United Alloy, a standard business practice.

Last updated: 8:53 pm Monday, November 25, 2013

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