Cabinet manufacturer to build a plant in New Ulm

By KEVIN SWEENEY

Journal Editor

NEW ULM -- Medallion Cabinetry, Inc, a manufacturer of wood cabinets for kitchens and bathrooms and entertianment centers, is working with the city of New Ulm to build a manufacturing plant here.

The New Ulm City Council on Tuesday set Aug. 31 at 5 p.m. as the date for a public hearing on Medallion's request for a JOBZ subsidy agreement, and authorized the purchase of land from the New Ulm Economic Development Corporation where Medallion plans to build.

Medallion plans to build a $2 million plant in the new Airport Industrial Park. The plant will make the doors that Medallion will use in making cabinets in its other plants.

Under the JOBZ (Job Opportunity Business Zone) program, new and expanding businesses can get a variety of real estate and corporate tax breaks through the year 2015 for new buildings or expansions that create new jobs in designated project areas.

Seth Visser, a process engineer for Medallion in its Waconia plant described the business for the council. Medallion has been a subsidiary of Elkay Manufacturing since 1993. It has 666 employees, 525 in its Waconia plant, and 141 at its plant in Independence, Ore. The company makes cabinets for sale to wholesalers and retail outlets.

According to the proposed subsidy agreement, Medallion would employ at least 30 full time employees by Dec. 31, 2006. It will have a minimum wage level, exclusive of benefits, of at least $10.50 per hour.

Medallion would make a capital investment of at least $6 million in building and equipment during its first year of business.

Visser said the company has an "agressive" building schedule. Once the agreements are completed, the company will start building, and hopes to be up and running by the first of the year.

The city's cost in the agreement would be to purchase the land for the plant from the New Ulm Economic Development Corp. for $82,644. The city would also purchase an option to by adjacent land for the expansion if Medallion creates more than 40 jobs, above and beyond the 30 in the subsidy agreement. Visser said the company plans to employ 90 to 100 eventually.

Visser said the company is a clean industry. It uses top of the line sawdust collection equpment.

The company provides a good beneifts program, including health, dental and eye insurance, 401k plans and profit sharing that ties in to the 401k plan.

The council approved the development agreement and purhcase agreement for the land involved in the project, subject to completing the deal with Medallion.

In other business, the council approved JOBZ subsidy agreements for two existing businesses, Windings, Inc., and Beacon Promotions, which will allow the two businesses to expand.

Farmers Co-op rail

crossing

The council also approved a license agreement for Farmers Cooperative of Hanska, which would allow the co-op to close off the 7th South Street railroad crossing for up to 24 hours at a time while it loads rail cars with grain and connects the cars into long trains.

Randy Rieke, manager of the Farmers Co-op, said it is not the intention of the co-op to close the crossings for 24-hours at a time, but that the possibilty was a requirement from Burlington-Northern Railroad.

In practice, the crossing would be closed when Burlington brings long strings of cars in to the Farmers Co-op siding near the Burdick Elevator. There would be no need to close the crossing while the cars are being filled. The gates would be closed again when the trains are assembled and shipped out.

According to the agreement, the co-op could not close the crossing for more than 72 hours in a calendar month. It must also install sliding security gates made of chain link fencing on both sides of the crossing for when the crossing is closed. The system would also notify the Brown County Law Enforcement Center whenever the gates are closed, and would monitor how long the gates are closed.

The agreement carries a $750 license fee, and a minimum annual rental fee of $1,000. The co-op would pay a penalty of $500 per hour for every hour it exceeds its monthly limit, or exceeds the 24-hour limit.

If the co-op exceeded its limit by 10 percent in any calendar year, the city would have the right to terminate the agreement with six months' notice.

Either party can terminate the license agreement for any reason, giving 48 months notice.

Annexing land for

industrial park

The council had the final reading and adopted an ordinance annexing about 44 acres of land in Milford Township for the Airport Industrial Park.

Parks

The council approved a recommendation from the New Ulm Park and Rec Commission to allow the New Ulm Baseball Association to build a ticket booth at Mueller Baseball Park, in conjunction with the building of a concession stand and restroom facility. The cost, estimated at $8,000 to $9,000, would be paid by the Association.

The council also approved the hiring of an engineer specialist to evaluate the stone retaining wall at Hermann Heights Park. The Park and Rec Commission is hopes to replace the wall next year.

The council also approved some change orders for the Hermann Monument statue repair. Steve Servis, project manager from Conservation Solutions, recommended removing the large steel plating that was added to the original platform; cover the smaller, original base with copper, and repair the helmet that Hermann's foot rests on, the crest and shield, which had collapsed. The cost of the changes is $13,579.

Servis said his three-man crew is making good progress on repairing the bullet holes and imperfections in the copper sheeting. The interior framework is in good condition, except for one crack that is being repaired, and the repairs to the wing on Hermann's helmet. He said the crew hopes to have the repairs completed by the end of September.

Runway repairs

The council awarded a contract for runway repairs at the New Ulm Municipal Airport to M.R. Paving & Excavating, Inc., the sole bidder on the job. M.R. Paving's bid came in at 20 pecent below the estimate. The amount of the bid was $229,570.29. The Federal Aviation Administration will pay 95 percent of the cost.