Omaha Steel Castings secures financing for move to Wahoo

econdev@nppd.com   10/2/2012

Omaha Steel Castings has secured most of the funding for a new $13.5 million facility in Wahoo, Neb...

Omaha Steel Castings secures financing for move to Wahoo

 

Omaha Steel Castings has secured most of the funding for a new $13.5 million facility in Wahoo, Neb.

A $5.4 million Small Business Administration loan and $6.5 million Omaha State Bank loan will cover about 90 percent of the total cost for the century-old Omaha company's new facility, Omaha Steel announced Thursday. The SBA loan, a 504 refinance loan made available through the Nebraska Economic Development Corp., is the second largest SBA loan approval in the U.S. this fiscal year.

“It's a big concern that's off the table,” said Omaha Steel president Phil Teggart. “Now, our job is to get the thing built and get it up and running.”

The company, currently located at 46th and Farnam Streets, announced the move earlier this year. It broke ground on the 20-acre site northeast of Wahoo in April, and is on track to have the first 100,000-square-foot building enclosed by December.

The company expects to start moving to Wahoo by next spring and finish up by the end of 2013. The foundry's operations — making such products as machine parts and oil valves, building frames and power plant doors — will continue at both facilities during the moving process, the company said.

Celebration of the official groundbreaking is next week.

With its new facility and secured financing, the company's profitability is expected to grow, said Ted Rowan, executive senior vice president of the Nebraska Economic Development Corporation.

“It'll be so much nicer over there in Wahoo for them,” Rowan said. “These programs allow people to get into a building no matter what kind of size or structure. It's good for the bank, good for the business and just makes good sense.”

The company's sales have been picking up since dropping to about $10 million in 2009. They bounced back to about $16 million in 2010 and $25 million in 2011.

This year, the company is projecting sales to reach $30 million, Teggart said.

Charlie Boone, senior vice president at Omaha State Bank, said it's exciting to work on a project that will help the company reach its goals and help Wahoo benefit economically.

“The collaborative relationship we have built with Phil and his team is very rewarding and it made this expansion possible,” he said.

Omaha Steel's move opens up its current space just west of the University of Nebraska Medical Center and the Nebraska Medical Center. The 10.67 acres, and a nearby 1.65 acres, had been listed for sale for a combined $8 million.

Alone, Omaha Steel's 10.67 acres were listed for $7.1 million.

The acreage for sale has piqued the interest of UNMC, which has called the land “prime territory.”

“We're still interested and we're continuing discussion with them,” said UNMC spokeswoman Vicky Cerino.

The 10.67 acres where Omaha Steel is located are currently owned by a trust controlled by the family of Ron Howlett, who ran Omaha Steel for nearly 30 years. Howlett died in 2009, the year after he sold the company.

UNMC's time frame doesn't match up with the Howlett family's hope of selling the land as soon as possible, said James Maenner, vice president of CB Richard Ellis, the company listing the property.

“We exchanged some correspondence with (UNMC), but couldn't come to an agreement about several issues, the biggest one being timing,” he said. “They have a lot of pokers in the fire across the street, and that's great. We encourage them to do what they have to do, and whatever we do on our ground is probably compatible with what the university would want.”

The listing has gained interest from a number of parties, including a hotel, national retailer and a couple of student housing developers, Maenner said.

In Wahoo, Teggart hopes all 225 current employees can remain on staff, though he knows not everyone wants or is able to make the trip from Omaha. The company is continuing to look into a shuttle service to get Omaha employees to the new location, Teggart said.

The company has already started hiring people from the Wahoo area, but Teggart declined to say how many.

“We do anticipate to hire quite a few people from Wahoo,” he said.

The new facility is projected to add nearly $31 million to the Wahoo and Saunders County local economy each year, and create more than 250 jobs, according to a study by the Nebraska Public Power District's economic development department of the Nebraska Public Power District,

“Three years of building relationships with Omaha Steel Castings has been a pleasure,” said Wahoo mayor Jerry Johnson. “Omaha Steel Castings will have a significant economic impact on our community. Phil Teggart and his staff have already made their positive presence known in our business community.”

Contact the writer:

402-444-1192, emily.nohr@owh.com

Full story and photo @ http://www.omaha.com/article/20120921/MONEY/709219958/1697#omaha-steel-castings-secures-financing-for-move-to-wahoo
 
source: Omaha World Herald

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