Alice Pickering
Wyoming Area ReporterChisago County and the city of Wyoming want Regal Machine to stay in the area, because the business is creating high quality jobs, although at a slightly slower rate than anticipated when it was granted a Minnesota Investment Fund loan in 2000, officials said.
According to Chris Eng of the Chisago County HRA-EDA, Regal is ěa good business.î Wyoming City Administrator Jill Teetzel agrees and said officials are discussing ways Regal Machine may refinance a state loan.
The basis for the original Regal Machine loan was the anticipated job creation to the tune of 12 new, quality manufacturing jobs. The company received an extension on a payback for the loan in March 2003.
At that time, officials said Regalís original 40 jobs had dropped to 26, before climbing back to 32.
Regal Machine Inc. requested a second extension on its Minnesota Investment Fund loan payback schedule. However no application was offered in 2004.
Teetzel said the State of Minnesota has called in the loan but has not yet set the repayment schedule for Regal. This is not negotiated and the state tells Regal when it has to make payments, she said.
Teetzel and Eng are hopeful that a loan can be arranged to assist Regal in meeting the payback to the Minnesota Investment Fund.
What may happen
Eng offered more information about the Regal situation.
There is a Business Enterprise Program in Chisago County, a consortium of cities, the county, utilities, and banks belonging to this organization that could provide help, he said.
This would come in the form of helping negotiate a lower interest rate for Regal Machine to repay its loan, Eng said.
Eng explained that participants deposit funds with the bank providing financing. The participants agree to accept a lower earned interest rate on their CDs. This write-down of interest makes ěcheaperî money available to the company seeking the loan, he said.
The difference in the interest rates allows the participating bank to make some money, but still lend at lower rate, he said.
The difference in the interest rate allows the company to repay the loan, while staying in business. There is no risk to the city or county, Eng said.
Eng said he considers Regal Machine a sound business that made expansion moves at a time the economy turned downward. Owners anticipated rapid expansion but the economy took a downturn and the company ěran out of time,î Eng said.
Eng said ěthe business is in good shape.î He also believes the state thinks so as well, but it is bound by law and can only allow one extension.
In Regalís case the extension was given in March 2003. If a loan is arranged through the BEP the term would be about five years, Eng said.
According to Teetzel, Regal Machine has not received the repayment schedule from the state. For the time being plans for refinance are on hold, Teetzel said.
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