Council approves interim financing for Kimber

Published 10:38 pm Thursday, December 27, 2018

In light of the government shutdown, the Troy City Council is securing interim financing to ensure Kimber has the money to continue progress while waiting for loans and grants to come through.

The council approved the negotiation of a bond instrument that will give Kimber access to up to $3 million as they work to complete the new gun manufacturing facility.

“Whaley (Construction) is ahead of schedule, although we don’t know how this rain is going to affect that,” said Mayor Jason Reeves. “But the USDA loan could be delayed due to the government shutdown. We wanted to make sure we didn’t have any delays and no cashflow issues related to the project.”

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The USDA loan and Industrial Access grants together total approximately $2.7 million in funding that was promised to Kimber in the project agreement between the City of Troy and the manufacturing company.

Reeves said the funding is set to come in the first quarter of 2019 and could come early enough for the interim financing to never even be drawn on, but it could also come later in the quarter.

“If it comes January 15, then there’s probably no problem,” Reeves said. “If it’s April 15 that could be an issue.”

Now that the interim financing approved though, Reeves said there will be no problem for Kimber to keep working as fast as possible.

The facility was originally expected to be completely finished by May, but Reeves said the company is ahead of schedule and could be finished even earlier, although rain could still cause delays.

Reeves said this should be the last action the council has to take under amendment 772, which allows cities to recruit certain businesses and industries.

The council approved the project agreement with Kimber at the beginning of this year, offering over $24 million in incentives to bring the company to Troy.

In exchange, the company will create 366 jobs and invest over $38 million into the local economy over the course of five years.

“It is the realization of a long-term goal for the City of Troy and for me personally to see a firearms manufacturing company with a stellar brand like Kimber creating jobs and investing in the community,” Reeves said. “Troy has a strong manufacturing base, and Kimber will substantially add to that foundation.”

The bulk of the incentive is a $16.325 million bond that the city is offering the company through the Industrial Development Board of the City of Troy for the design, renovation and construction of the facility. Reeves said the company would pay that back through a lease with the Industrial Board, but that the amount the company pays back is contingent on job creation and utility usage among other metrics.

“They can do well enough for total forgiveness or poorly enough to not get a dime,” Reeves said. “The terms of the lease are all based on performance.”

The company’s facility will be built on nearly 75 acres of land in the Industrial Park. The facility will feature a 225,000 square foot building, which will incorporate an existing spec building on the site.