by CHRIS ROGERS
Winona city officials voted last week to consider giving a new manufacturing plant an extra year to meet job creation goals required by the terms of a subsidized loan agreement. While the business has not yet created all of the 20 full-time jobs it promised, local and state officials spoke positively about the 13 jobs it has.
The Chicago-based company Gypsoil opened a new factory in Winona last spring to manufacture and stockpile a value-added version of the agricultural amendment gypsum. In 2015, the city of Winona’s Port Authority gave Gypsoil a $140,000 subsidized, low-interest loan for the venture and the Minnesota Department of Employment and Economic Development (DEED) gave Gypsoil a $300,000 subsidized loan. Gypsoil’s total cost for the project was $5.7 million. The terms of both loans require the company to live up to its job-creation promises: 20 full-time jobs paying $15 per hour or more. Gypsoil also received a loan from the Southern Minnesota Initiative Foundation (SMIF) — a private foundation that receives funding from local governments, including Winona and Winona County.
The plant got off to a strong start, hiring 17 workers within the first several months, but then demand slumped last fall, according to Gypsoil Director of Pelletized Products Steve Musser. Gypsoil laid off eight workers in late October 2016, bringing its staff down to just nine employees working one single shift. At the time, Musser said that the company underestimated how dramatically sales would drop off at the end of fall tillage season, regretted making layoffs, and was still committed to meeting its job creation pledge.
This year, the factory has hired on more staff — 13 total employees, according to Winona Economic Development Coordinator Myron White. In an interview this week, Musser said the factory is currently employing 20 people and running three shifts around the clock during the week, but some of those 20 employees are part-timers hired through a temporary agency. Either way, Gypsoil is still short of its promise to create 20 full-time jobs, and the original two-year deadline is coming up on October 31, 2017.
The loan terms allow Gypsoil to request a one-year extension to that deadline, and this summer the firm asked the city and DEED to extend the deadline until October 31, 2018. Musser said the company is hiring on the temporary workers and that he is very confident the factory will meet the job creation requirement. “It wasn’t a question of hitting the target. It was a question of having full-time employees hired,” he said. Under the loan agreement, if Gypsoil fails to meet the job creation requirements the city and the state could choose to “claw back” a portion of the loan.
“To date, they’ve created 13 of the 20 jobs. All of their loans have been paid on a timely basis … They’re just asking for a little more time to create those jobs,” White told the city’s Port Authority Commission last week. The group voted unanimously to recommend the extension request to the City Council, which is slated to hold a public hearing and take a final vote next month.
Al Thurley is one of two City Council members that serve alongside appointed business leaders on the Port Authority Commission. In an interview last week, he said, “They created 13 out of the 20 they promised. That to me — you’re getting there. So why not give them the one year extension?” Thurley continued, “We’re glad to have them here as an addition to our port.” City-owned docks offload barges loaded with powdered gypsum, which the plant converts into pellets. The city earns a small per-ton fee on goods handled at the docks, and gypsum has been a small part of that mix. Thurley added of the factory, “These opportunities don’t come along, and I’m sure other communities would love to have them.”
If the City Council approves the request, the state would likely sign off on it, as well. “Since jobs have been created, DEED would support an extension,” DEED Communications Director Shane Delaney stated. If they miss an extended 2018 deadline, Delaney said DEED would require the company to pay off the loan sooner.