Financing high-impact business projects
Friday, March 29, 2019
One important way Great River Energy invests in the communities it serves is through incentive programs that enable business development. A new Business Expansion Loan Program is geared toward large, high-impact projects that bring in significant investments and create quality jobs.
The first business expansion loan of $500,000 to the Rice County Housing & Redevelopment Authority was just finalized. The financing will help build the necessary infrastructure for Daikin Applied to build a state-of-the-art production facility near Faribault.
The new facility will be located in the Met-Con Business Park north of Faribault and is served by Great River Energy’s member-owner Steele-Waseca Cooperative Electric. The project will have a lasting impact on the co-op and the surrounding region through increased energy sales, added tax revenue and new job creation. In addition, the infrastructure developed for the project will enhance the marketability of the surrounding land for further industrial development.
Daikin Applied is a division of Daikin Industries, the world’s foremost manufacturer of air conditioning units for residential, industrial and commercial applications. The international company has headquarters in Japan, sells products in 150 countries and has 90 production facilities around the world.
The company has existing operations in both Faribault and Owatonna that employ roughly 900 people. The new Faribault site was selected over competing sites in Texas, Georgia, South Carolina and Mexico.
Daikin Applied invested more than $40 million in an initial warehouse purchase and renovations of the 300,000-square-foot space. The business expansion loan will cover Rice County’s portion of an infrastructure funding package made in partnership with the city of Faribault and the Minnesota Department of Employment and Economic Development to extend water and sewer mains to the site and make stormwater improvements.
Phase one of the expansion will create 30 jobs and is expected to be complete in October 2019. Additional phases of expansion are planned to further augment the facility and its capabilities. When all phases are completed in 2026, the project is expected to have added 132 new jobs with wages averaging more than $22 per hour.
The project has already sparked additional development. The Met-Con Business Park is currently building an additional warehouse facility. It has more than 150 acres of land available for future development.
Great River Energy's Business Expansion Loan Program was designed to facilitate new commercial and industrial investment in areas served by cooperative member-owners. “The loan for the Daikin Applied project is a prime example of how Great River Energy works collaboratively with local and state organizations to incentivize business expansion in our service area,” said Erin Sparks, economic developer for Great River Energy.
Under the program, loans from $100,000 to $500,000 with interest rates as low as zero percent are available. Funds may be used for most business expansion or start-up costs, including land acquisition, construction, equipment and pre-development activities. To be considered, projects must create a substantial economic impact in the form of business investment and jobs.