Water Works buys CMP

Concern over the possible closure of Cambridge Metals and Plastics and the loss of close to 100 jobs was put to rest last week thanks to a buy-out from a Twin-Cities-based firm.

Water Works Manufacturing, LLC, on Friday, April 27 purchased CMP from Leggett & Platt, Inc.

By Jon Tatting
editor.countynews@ecm-inc.com

Concern over the possible closure of Cambridge Metals and Plastics and the loss of close to 100 jobs was put to rest last week thanks to a buy-out from a Twin-Cities-based firm.

Water Works Manufacturing, LLC, on Friday, April 27 purchased CMP from Leggett & Platt, Inc. — who in 2001 assumed ownership of the 44-year-old auto and recreational vehicle manufacturer at 500 S. Cleveland in the city’s Northeast Industrial Park.

Pictured: Water Works officials (from left) Robb Bass, vice president of engineering; James Shear, president; and Mike Glomski, vice president of operations are pictured April 30 in council chambers with Cambridge Mayor Marlys Palmer and Economic Development Director Tom Willett. Photo by Jon Tatting

In addition, the Cambridge City Council approved a Job Opportunity Building Zone (JOBZ) Agreement with Water Works, based in St. Louis Park, during a special meeting held April 30 at city hall.

In effect, Water Works will retain 84 jobs — 60 was legally required under the buy-out arrangement — as well as transfer 12 more employees as part of its consolidated effort.

Water Works Manufacturing President James Shear noted existing employees will experience no pay cuts, while benefits will be comparable to what employees had under Leggett & Platt.

Meanwhile, the city, under the direction of Economic Development Director Tom Willett, played an instrumental part in the buy-out process by setting up a financial package.

Willett said Leggett & Platt is providing bridge financing and Premier Bank, interim financing, until loans close from the Minnesota Investment Fund (MIF) and Minnesota Community Capital Fund (MCCF).

After those closings, Premier Bank will have financed $2.5 million on the 150,000 square-foot building and land, and MCCF will have financed $1.1 million for a total of $3.6 million.

The equipment purchase totals $1 million with $500,000 financed by Premier Bank and $500,000 by MIF — whose loan is from the Department of Employment and Economic Development to the city. The city in turn loans the money to Water Works.

As the funds are repaid, the city retains 20 percent so that it can establish a local revolving loan fund to assist other businesses.

The JOBZ program, created in 2003, is designed to help stimulate economic development by providing local and state tax exemptions to new and expanding businesses.

Enter Water Works

Owners of CMP since 2001, Missouri-based Leggett and Platt in February notified the city of its plans to close the facility on April 27.

Willett relayed the following impacts that could have occurred with CMP closing:

“The closing of CMP and loss of 100 manufacturing jobs would mean a loss of 12 percent of all manufacturing jobs,” said Willett, noting Cambridge has approximately 900 manufacturing jobs.

At one time, he added, CMP employed about 300, but that number dropped to 140 by 2004. With 20 more lost by ‘06, the number of employees had dropped to 100 this year.

Shear noted Water Works plans on avoiding this trend.

Water Works Manufacturing is an engineering design and production company focused on the rapid design, development, prototyping and production of formed metal parts.

Using progressive hydroforming processes, Water Works assists companies with design, development and production of engineered metal parts. The company uses CAD design software, in conjunction with 3D simulation and FEA software, to design and simulate in part the metal forming processes.


Tax impacts

The council on March 5 approved a JOBZ transfer designation to support a buy-out with intentions of retaining the jobs impacted. The Isanti County Board and School District 911 eventually followed suit.

For 2007, the property taxes on CMP’s building will be about $115,512. With the JOBZ transfer official with a buy-out, the taxes saved by Water Works is: City, $38,291; Isanti County, $25,879; Dist. 911, $13,241; State, $29,003.

Also with a buy-out, the new owner would continue to pay taxes on the land (about $10,000), but the building would be exempt from property taxes through 2015

As part of the JOBZ agreement, land currently designated as JOBZ would be transferred from a wetland area at Cambridge Opportunity Industrial Park to CMP.

DEED originally established a JOBZ modification process to transfer JOBZ designation from one area to another. The first modification, involving TEAM plus, occurred in July 2005; the second, Park Manufacturing, in March 2006; the third, MAPE USA, in May 2006; and the fourth modification, U.S. Water, occurred in September 2006.


About CMP


Cambridge Metals and Plastics is 44-year-old company and a leading manufacturer of high quality ATV, snowmobile and motorcycle parts and accessories.

Serving both OEM’s and the Aftermarket, CMP is a full line manufacturer offering everything from product development and design engineering to complete steel fabrication, including stamping, tube bending, robotic welding and assembly.

The company uses its own state-of-the-art powder coating line and does custom finished product packaging for many of its own proprietary products, private labeled products and even OEM customers.

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