Linden Lumber announces buyout
Published 12:00 am Tuesday, March 11, 2008
LINDEN &8212; Approximately 200 jobs will remain intact at the current site of Linden Lumber Company as a new company known as AHI Linden Lumber Company, which is the product of negotiations during the last several months between LLC and Rossi American Hardwood, looks to take over operations.
The announcement came before the Marengo County Commission Tuesday as Terry Dunnam, chief financial officer for LLC, read a statement on behalf of Theodore Rossi, the chief executive officer of the new company, asking for a 10-year ad valorem tax abatement and a $1.5 million loan to purchase production equipment to be used for the sawmill and hardwood flooring operations.
According to Rossi&8217;s letter, &8220;We request the funds be available to finance 80 percent of the hard acquisition costs of the new equipment with the new company providing the 20 percent deposit. The interest rate would be the prevailing tax free rate but no more than five percent. The term of the loan would be seven years with a five-year balloon, with interest being paid during the first year.&8221;
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Dunnam said the equipment will replace some equipment that has been in operation since the 1950s. New equipment, he said, will increase the company&8217;s ability to compete in the market. It could also give them the potential to open up more production lines, which would provide more jobs. Dunnam said at present they are only operating one production line.
Dunnam also assured the commission if the company were to have the capacity to hire more production line workers, the first place they would turn would be to former employees.
This new proposal, according to county attorney Woody Dinning, would put the company&8217;s previous proposal of a $7 million loan over 20 years &8220;off the table.&8221; Dinning also said this new proposal will &8220;not put the county at risk.&8221;
The commission further discussed the proposal with Dunnam, making sure to note this tax abatement would only cover the county&8217;s tax, and not taxes for the City of Linden, which would need to be another request to a different municipality. Another point was that the $1.5 million would be used solely for hard assets and not to pay prior debt or other bills.
After discussion, the commission voted unanimously to approve both proposals.
Dinning, who was an active part in defining the terms for the previous loan proposal, was positive about the county&8217;s decision. He said without the county stepping in to stave off the planned foreclosure in August, there would no jobs at the company to save.