City acts quickly for Medallion Cabinetry

'Aggressive' building

schedule needs

utilities by Dec. 31

By KEVIN SWEENEY

Journal Editor

NEW ULM -- Faced with an "aggressive" building schedule, New Ulm city officials acted quickly Tuesday to approve a Job Opportunity Business Zone (JOBZ) subsidy agreement with Medallion Cabinetry and set out to extend electrical service to the Airport Industrial Park.

Medallion Cabinetry plans to build a manufacturing plant in the new city industrial park. Its schedule is set to meet a Dec. 31 deadline by the federal tax code. If Medallion can get its building constructed and its equipment in place and operating by Dec. 31, it can reap a 50 percent depreciation bonus, according to Craig Fast, special projects manager for Medallion.

Medallion plans to invest at least $6 million in construction and equipment costs. It will be guaranteeing at least 30 new full-time equivalent (FTE) jobs by Dec. 31, 2006, according to the subsidy agreement approved by the city council Tuesday. If the company decides to expand the plant, it would create at least 40 more jobs. The jobs would pay a minimum of $10.50 an hour for the first 30, and $11.50 for the second 40.

Councilor Clark Tuttle said he has expended considerable effort in researching Medallion, and he has not heard a single negative word about the company.

City government is intent on doing what it can to cut through red tape and help Medallion meet its deadline.

But the task may be falling hardest on the New Ulm Public Utilities Electrical Department, which has the job of extending an underground electrical express feeder line to the new industrial park, which was just created this summer.

The Dec. 31 deadline gives the department a considerable challenge to design the mile-long extension that would serve not only Medallion but the rest of the industrial park in the future, bid out the project and get the work done so that Medallion can be up and running by the end of the year.

The Public Utilities Commission approved the project and authorized the city to develop the specifications Tuesday. It also approved expenditure of funds from the electrical department's reserves to cover the cost, even though staff doesn't know how much it might cost at this point.

"I just got the plans," said Utilities Engineer Dan Sonnek, when PUC president Jim Hogen asked him for an estimate. "I'm not in a position at this point to give you an estimate."

Pressed for a figure, Sonnek said it would be closer to $500,000 than a million dollars. But the utility doesn't have a firm estimate on material costs, and finding a contractor on short notice won't be cheap, said Sonnek.

The project is part of the utility's master plan and would have been done sometime in the next few years. Doing it now may put a burden on the PUC's budget this year, but will reduce its costs in the future, Sonnek said.

Fast said that with the actions taken Tuesday, Medallion will have its building plans to the city inspection office by Friday, and it hopes to begin ground work as soon as the plans can be approved.