Jobs Created:
350[/box] The project entails the expansion of a major Superior area employer—Exodus Machines, Inc. Exodus Machines produces wheeled material handlers for the scrap and recycling industry. Exodus began operations in 2008 and was funded with equity from an ownership group and financing which included New Markets Tax Credits through a transaction Impact Seven brokered. After introducing its first machine to the market in late 2009, Exodus Machines was approached by, and in early 2012 formed an alliance with, Caterpillar Inc. Per the alliance, Caterpillar is responsible for marketing and distributing the products through its vast distribution network. It also supplies parts and components to Exodus. Exodus branded products will give way to Caterpillar branded machines in early 2013. Through the alliance Exodus will increase production from six machines per month to 32 machines per month. Exodus has experienced significant sales growth since inception, recording $22.3 million in sales in 2011. Sales for 2010 were $13.1 million and sales in 2009 were $1.3 million. Based on sales projections provided by Caterpillar and projections prepared by Exodus, Exodus sales will top $83 million in 2013 and will consistently be over $100 million by 2014. The project entails acquisition of a 2.88 acre lot and construction of a 60,000 square foot building addition on the site. Estimated total costs for the project are $6.55 million.
Work CDC Did in Assembling Financing Package: Impact Seven took the lead in assembling the financing for this particularly complex project, which included bringing in funds from five different entities. Impact Seven assisted in structuring project collateral pledges. In addition to bringing in the direct funding sources, Impact Seven worked on making arrangements to ensure that the project remained in compliance with its New Markets Tax Credits obligations.
How Capital Was Aggregated at Local Level: The City of Superior and Douglas County were able to bring both cash and a pledge of collateral totaling approximately $3.1 million to the Exodus Machines project.
How Project Was Brought Across Finish Line: This project was unique or atypical in that both many partners were involved and each partner played a critical and essential role in the project. While Impact Seven brought both subordinated debt and primary financing to the project, it assembled the various partners and defined their roles. Impact Seven played the key project role in bringing the collaborative effort across the finish line.
Program Funding: Cash from guarantor and Exodus Machines totaling $555,000; TIF from the City of Superior in the amount of $750,000; WEDC grant funding totaling $1,000,000; Impact Seven loan via Office of Community Services funding in the amount of $800,000; Impact Seven loan for $3,445,000 with WHEDA participation for $1,722,500 and Community Development Bank participation for $750,000.
Jobs Created: Projections are for the addition of 206 new positions – 155 to be targeted to and filled by low-income people – over the next five years and as many as 350 jobs over the next six to eight years, and the creation of 80 to 100 temporary construction jobs. The permanent positions will be added in the following disciplines: welding, machining, assembly, expediting, engineering, purchasing, manufacturing supervision and office staff. On average, these positions pay $18.25 per hour with a 50 percent health insurance benefit.
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PROJECT SPONSOR:
Impact Seven, Inc.Almena, Wisconsin
John Will, Vice President; Bob Mayer, Director of Business Development
715.357.3334
PROJECT HIGHLIGHTS:
- The expansion of a major Superior area employer—Exodus Machines, Inc.
- Total Project Cost: $6,550,000
- Program used: New Markets Tax Credit
- Project Partners: Impact Seven, Inc.; Wisconsin Economic Development Corporation (WEDC); Wisconsin Housing and Economic Development Authority (WHEDA); Community Development Bank of Ogema, MN; Charter Bank; City of Superior; Douglas County.
COMMUNITY PROFILE:
- Superior, WI
- Unemployment rate of 14.9%
- Low wages and underemployment are major issues in Superior, as evidenced by the fact that Superior’s median household income is just 78 percent of the state’s median household income.