IEDC Approves Revolving Loan for Local Dental Lab

IRONWOOD, MI - Saturday, May 23, 2009 - The Ironwood Economic Development Corporation (IEDC) held its regular meeting yesterday, May 22, 2009, at 9:00 AM in the Community Development Conference Room on the second floor of the Ironwood Memorial Building. Attending yesterday's meeting were board members: John Wyssling; Mark Ruppe; Joe Cayer, Sr.; City Manager Scott Erickson; Debra Bowles; Bob Schonberg; and Jim Huss. Also attending the meeting was Community Development Director Dan Petersen. In the audience was Ken McCauley, owner of Black River Dental; and representing the media yours truly.

The Board had two main issues to address at yesterday's meeting: (1) to discuss and consider a Revolving Loan Request from Black River Dental; and (2) to examine the merits of renewing a contract with Lamar Company to renew a US-2 billboard advertising the available industrial park spec building.

Dan Petersen addressed the Board explaining that Black River Dental already has an outstanding load through the Revolving Loan Fund. He said that Mr. McCauley was actually ahead on his payments and that his payment history has been impeccable. He said that his current lab is located on Suffolk Street (in Dr. Stanley Gresham's office building) and that he will be moving to a new location on Aurora Street (Dr. Gresham's soon-to-open new office building). Petersen explained that Mr. McCauley needed to expand his current facility and needed to purchase new equipment. A loan application was made to the IEDC for $10,200.

Mr. McCauley addressed the Board and explained the uniqueness of his business. He said the nearest dental lab that does the type of work he does was in Green Bay. He explained that he does work for Dr. Gresham and six other dentists. He said he has had several regional dentists expressing interesting in doing business with him -- he'd like to expand -- but currently his facility can only handle a limited workload. He said he would like to expand his business; train and hire new workers; and take on a larger workload. He said that there is a huge demand for the work he does -- very few dental technology programs available -- and much demand for trained dental technicians. He said he would like to introduce high school kids to dental technology -- perhaps through a vocational education program.

Each of the Board members weighed in on the proposed loan. Joe Cayer, Sr. said that the payment history was enough to convince him to vote to approve. Mark Ruppe was happy to hear that more employees would be hired in the future stating that one of the IEDC's main purposes was to create and maintain jobs. Scott Erickson suggested that a "line of credit" be established instead of lending a lump some. He suggested that Mr. McCauley could purchase equipment as needed and he would only be paying interest on the used balance of the credit line. Erickson also asked if McCauley wanted to combine his existing loan with the new loan. McCauley said he would like to have both loans combined.

McCauley originally borrowed $25,000 from the IEDC in 2006, on a 5-year note and the balance on that loan is less than $9,000. The original loan carries an interest rate of 7%, and a newly restructured loan will have a significantly lower rate since the general IEDC loans are prime plus 1%.

The IEDC voted unanimously to extend the existing loan in the form of a line of credit. They also voted to approve a 5-year repayment plan on the credit line with an interest rate equal to the current prime rate plus 1%. The Board asked that a current inventory of equipment be supplied to the IEDC to partially collateralize the loan -- the new equipment purchased would be added to the existing list to serve as full collateral. Members of the Board expressed an interest in touring McCauley's facility once he moves and gets organized in his new facility. McCauley was in full agreement.

Dan Petersen then began to discuss the Billboard rental agreement with Lamar Company out of Gladstone. The agreement is for a billboard that advertises the Ironwood Industrial Park and the available spec building. The rental charge on the sign is $225 per month. Bob Schonberg said he was of the understanding that the issue was previously discussed and an agreement was made that investment into a quality website would be money better spent. A brief discussion of the effectiveness of billboards ensued, and the general consensus of the Board was to table the matter until RFP's for web development are sent out and received by the City. This also gives the IIDC an opportunity to express their concerns once again prior to making a final decision on the sign. The issue will be revisited at their next meeting.

Dan Petersen reminded the Board that there will be a public hearing on Tuesday, May 26, 2009, to hear comment on the newly adopted IEDC plan that would allow the Board to give out-and-out grants to entities that benefit the public at large. He also gave the Board an update on the Blueprints for Downtowns program, stating that HyettPalma completed the "plan" portion of the initiative.

According to Petersen, O'Reilly's Auto Parts is still working with the City to build a retail outlet here. He said he spoke with company two weeks ago, and they were in the process of going out for construction bids. Mark Ruppe explained that he spoke with the Company officials a few days ago and everything is set to go. Ruppe told the Board that he visited the old Hardee's property and he noted that many of the windows on the building were broken by vandals.

A brief discussion on the proposed Copperwood Copper Mine followed. There has been much speculation as to when and if the mine will be locating in North Ironwood or not. Mark Ruppe told the Board that he had a meeting with several of the officials from the mining company and local officials, and two main components will determine if the mine opens or not -- the results of their two-year long environmental studies and the attitudes of the locals about allowing mining here.

The meeting adjourned following that discussion.