Money used as industry expansion incentive
The Troy City Council approved a bond issue that will pave the way for an expansion at Golden Boy Nut Corp. that will create 75 new jobs.
Rush Rice, President of Rice Advisory in Montgomery, serves as the city’s financial advisor and was at the council meeting to explain the details of the city’s involvement in the deal. Rice said the deal involved three parties, the City of Troy, the Troy Industrial Development Board and Golden Boy.
Rice said Post Holdings, Inc., which owns 8th Avenue Food & Provisions, which owns Golden Boy, recently acquired the Peter Pan Peanut Butter brand from Conagra brands. The transaction was finalized earlier this year and Rice said Post Holdings wanted to move some production of Peter Pan to Golden Boy.
Rice said the Industrial Development Board created an incentives package that would allow Golden Boy to borrow the money through a $20 million bond issue. In return, Golden Boy would pay monthly rent on the expansion for the term of the bond issue.
However, Rice said the ID board would need a backer for the bond issue, and that is where he city came into play. Rice said the city would issue the bond, and the ID board would collect the rent from Golden Boy.
Rice said it was important to note that the amount of rent Golden Boy would pay each month would exceed the amount owed on the bond each month.
Rice said the deal was a complicated, but common practice for incentives for industry expansions.
“The ID board borrows the money, the city backstops the board and Golden Boy pays the rent, which is always more than the bond issue,” Rice said.
Rice said this would be Golden Boy’s third expansion and increase the number of employees by 75 and expand the industry footprint to 300,000-square-feet. Rice said.