Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 21, 1995 TAG: 9508090028
SECTION: CURRENT PAGE: NRV1 EDITION: NEW RIVER VALLEY
SOURCE: BRIAN KELLEY STAFF WRITER
DATELINE: ELLISTON LENGTH: Medium
A regional marketing group, the New River Valley Economic Development Alliance, first brought the hydraulic-parts manufacturer to the region for a tour in Feburary 1994. Days later, company officials settled on Montgomery's Elliston-Lafayette Industrial Park as their first choice.
From then on, the county's economic development team - Don Moore, Lisa Fain and Lisa Ison - took over. Wednesday, with Gov. George Allen and dozens of others looking on, H. P. Hydraulics President James Dunn thanked county and state officials, First National Bank and others for their help in sealing the deal.
H. P. Hydraulics expects to obtain final permits by today and to break ground Monday at the industrial park, Dunn said. He expects Lionberger Construction Co. of Roanoke to finish the 32,700 square foot manufacturing center in two months. Hiring and production would follow in later months.
Dunn, who lives in the Roanoke Area, said his family chose Montgomery because it is central to 90 percent of their customer base, because of the Allen administration's "pro-business agenda" and help in speeding regulatory review before the Department of Environmental Quality and because Virginia's lower unemployment and worker's compenstation rates mean lower benefit costs.
H. P. Hydraulics sells cylinders, pumps and other hydraulic gear to surface mining, construction and other industries. Its new Montgomery plant will be a consolidation of two subsidiaries. Six or seven managers will be moving from an existing manufacturing operation in Pikeville, Ky., but the bulk of the 58 jobs will be new hires, Dunn said. A later expansion could add another 21 jobs within two years for a total of 79.
H. P. Hydralics is investing $2.5 million in the new plant, primarily to mvoe existing equipment, buy new machines and build up inventory. First National Bank is providing financing for the private portion and for part of the public investment in the cost of the building.
The H. P. Hydraulics prospect first became public knowledge in April 1994, when the county Board of Supervisors approved a 60-day option for the company to buy 3.78 acres in the park for $26,000. The county extended the option, until last winter when the Montgomery County Industrial Development Authority stepped in.
In the first arrangement of its kind in Montgomery, the authority decided to pay for the $870,000 building and sell it to the company in a 15-year lease/purchase arrangement. The Board of Supervisors also deeded the land to th authority; that cost, too, will be recoverd in the 15-year agreement.
To pay for the building, the county development authority obtained a $350,000 loan from the State's Economic Develppment Revolving Loan fund. Another $470,000 will come from a loan from First National Bank. Both with be repaid through the lease.
On Wednedsday, with bulldozers rumbling in the background on the adjacent South Star Corp. industrial site, Allen presented Dunn and Montgomery Board of Supervisors Chairman Larry Linkous with a $50,000 check from the state's Defense Conversion Fund to pay another portion of building cost. The county qualified for the grant money because of the loss of jobs in the region because of defense spending reductions, particularly at the Radford Army Ammunition Plant.
The state Transportation Department made one other contribution to the project last year: a $175,000 grant from its industrial access fund to build a road to the site.
by CNB