Expansion deal two years in the making
By Scott Bellile
The city of New London has reached an agreement with material handling equipment producer Steel King to expand its local facility.
Steel King, 325 E. Beckert Rd., will construct an approximately 135,000-square foot addition. City Administrator Kent Hager said the state should value the addition at $3-5 million, which will provide the city considerable property tax revenue.
The added space will lead to job creation in New London, Vice President of Finance Dan Ladd told the Press Star. He didn’t offer a number of jobs or a timeline for when hiring would begin.
As per the developer’s agreement, the city will provide:
• A cash contribution of $125,000 ($25,000 per year for five years)
• A one-time payment of $70,000 intended to be utilized by the developer to construct an access road with water and sewer laterals
• $100,000 to bring electrical service to the new facility
• Up to $30,000 in workforce training through Fox Valley Technical College and the Wisconsin Department of Workforce Development
• An economic development electric rate arranged with WPPI Energy that could save Steel King $2 million over four years. “Basically all the additional electricity that Steel King uses in its new addition [is] half price for four years,” Mayor Gary Henke told the economic development committee April 6. “It’s saving them almost $2 million. That’s huge.”
The money for the project will come directly from the city and there’s no TIF funding involved, Hager said. He added that the increased property taxes should pay off the city’s cash payments of $125,000 and $70,000 in five to seven years.
Steel King also has facilities in Stevens Point and Rome, Georgia. Ladd said the company considered those locations but decided a product line manufactured in New London would benefit most from the addition.
Talks between New London and Steel King regarding the expansion had been going for between one and two years, Hager said. City officials had expected news on Steel King’s selection as far back as July 2015, but the decision was delayed.
Ladd attributed the delay to the company needing more time to plan given the size of the expansion.
Over the past year as negotiations with Steel King were underway, New London city officials speculated at public meetings that Steel King choosing an out-of-town facility for its expansion could have meant the closure of its New London facility.
“They were looking at a number of different cities, different states for locating this, and the fact that they chose New London is really great,” Henke said.
Ladd said there are no plans for job cuts at Steel King’s other locations.
Founded in 1970 and headquartered in Stevens Point, Steel King manufactures pallet racks, cantilever racks, portable racks, industrial containers and protective guarding systems for industries. New London’s facility employs 135 workers, according to Ladd.
“They’re doing a lot for our community and I sincerely thank them for bestowing their improvement upon our community,” Hager said.