SOUTH BEND, Ind. (AP) — After opening its new facility on the city's west side, Nello Corp. has about 100 of the 500-plus jobs it plans to create within the next decade as part of a tax incentive deal with the city.
The manufacturer of steel towers and poles closed its facilities in Fort Worth, Texas, and nearby in Bremen as part of its move to consolidate operations at the new 200,000-square-foot facility, which opened in January. The plant, which mainly builds power transmission structures, is located where Sheridan Street dead-ends between West Sample Street and the railroad tracks.
Nello designs, builds and fabricates steel structures, which are also used for wind measurement towers and wireless communications. The privately held company was launched in 2002.
Nello invested about $12 million to build its new facility, which serves as its headquarters. That amount is included in Nello's 2014 agreement with the city that calls for an investment of about $57 million at its South Bend site by the end of 2025, which includes money for anticipated expansion plans. Nello had also agreed to retain 40 positions at its former city headquarters and create 524 new jobs over the decade.
For its part, the city's Redevelopment Commission agreed to spend up to $9 million in tax incentive finance revenue to pay for equipment on behalf of Nello. It has already spent more than $8 million on equipment purchases.
The city spent $3.5 million last year, for example, on press brakes. Other purchases have included a welding machine, a straddle carrier and semi-trailers. Revenue for those purchases was generated by the city's River West Tax Increment Finance Area on the city's west side.
Aaron Kobb, director of economic resources for the South Bend Department of Community Investment, said the city leases equipment to Nello for $1 per year until the company reaches certain milestones for investment and job creation. As those conditions are met, the equipment will be turned over in phases to Nello for $1 per purchase. Nello already made such a deal, for example, to acquire the $3.5 million brake presses from the city.
So far, Kobb said, Nello is on track to meet its job creation goals, and the city has been pleased with the results. "The company is happy with the pace of hiring and where they're at in their overall project scope," he said.
Robert Rumpler, vice president of operations for Nello, said the new facility has enabled the company to manufacture structures more efficiently. "We've benefited from combining our engineers with the shop floor and putting everything under one roof," he said. "And we've cross-trained the manufacturing workforce to shift from making one product to another."
Employees at closed plants in Bremen and Fort Worth — about 60 combined — were all given a chance to relocate to the South Bend facility, he said. Ten employees — eight from Bremen and two from Texas — decided to do so.
Rumpler attributed roughly 90 percent of Nello's business to power transmission structures. Five years ago, the majority of its business was attributed to wireless communication towers. But the company shifted its focus from that industry as it matured and demand for wireless towers declined among companies such as AT&T and Verizon.
"We decided to leverage our experience in another market, and we found that the power transmission market lines up with the same core strengths. We've experienced rapid growth in that market, which accounts for 90 percent of the work we do," he said.
Rumpler said that Nello plans to expand its facility within the next five years to increase its production capacity. It would also like to build a facility for the hot-dip galvanizing of steel structures. That work, which creates a corrosion-resistant coating on structures, is being done for Nello by three other companies.
Source: South Bend Tribune, http://bit.ly/2b30rUS
Information from: South Bend Tribune, http://www.southbendtribune.com