Deal for Dexter plant hits a snag
Published 12:00 am Wednesday, October 2, 2002
The McNeilus Truck and Manufacturing, Inc. "deal" is still not done.
In fact, its status as an "almost done" deal is in question and another delay has occurred.
Once again, officials hit a snag in the business subsidy agreement and action was postponed Tuesday after a lengthy discussion.
Mower County officials were prepared to compromise and make necessary changes to the agreement. According to Craig Oscarson, county coordinator, the changes included reducing the county's maximum estimated project cost to $2,420,586 and raising the county's loan to the Development Corporation of Austin to $175,000. The additional money -- coupled with a decrease in the interest charged the DCA from 5 to 4.5 percent -- will cover the DCA's administrative costs in the transaction.
However, it was in the area of the specific words used to describe how McNeilus would reach the job creation goal and the number of jobs to be created that stymied the DCA and McNeilus.
According to George Brophy, DCA president and CEO, "The concern is if the jobs are not created, their loan will be due in a year."
Oscarson did the math for everyone. "If that happens, then 20 percent of the $2.4 million must be paid by McNeilus."
In the proposal to assist the Dodge Center firm in building a facility at the intersection of Minnesota Highway 17 and Interstate 90 near Dexter, Mower County is the "financier" and the DCA is the owner of the properly and building and McNeilus the tenant.
According to Brophy, McNeilus has been meticulous in guaranteeing its role as an "operating entity and not a capital investor"" separate from the others' roles.
Ray Tucker, 2nd District county commissioner, agreed with Brophy's description of the parties' roles. He also agreed with Brophy's observation that the business subsidy agreement, as written, will not pass McNeilus' inspection and will require further "refinement."
Both the county commissioners and Brophy agreed they didn't want to delay the project further by allowing "lawyers to exchange letters."
Len Miller, 4th District county commissioner and chairman of the county board, maintained that "we're all involved in a process that I think is still moving in the right direction."
Tucker brought the discussion to an end. "We agree with all the modifications that were made today."
Everyone nodded in agreement.
Then, Tucker made the motion to continue action on the business subsidy agreement for the proposed economic development project until Tuesday and Dave Hillier, 3rd District, seconded it. The measure was unanimously approved.
Now, the business subsidy agreement will go back to the McNeilus representatives to learn if they will approve of the terminology concerning the job creation goals.
Meanwhile, Brophy prodded the commissioners to ensure the loan agreement will also receive priority attention from attorneys for the county.
Brophy then reminded all, "We cannot continue to have letters going back and forth between lawyers."
Lee Bonorden can be contacted at 434-2232 or by e-mail at lee.bonorden@austindailyherald.com