Winsted-Lester Prairie Journal, Aug. 9, 1999
Winsted council wary of new business proposal
By Luis Puga
Winsted City Council saw caution as the the better part of valor at Tuesday's regular meeting.
The council's caution stemmed from a proposal from Micron Rubber, a possible new occupant in the city's industrial park.
The start-up company would like to build a 30-acre facility with 50 employees to recycle tires.
The method of recycling, according to information City Administrator Aaron Reeves received, is a new method of tire recycling that breaks up a tire into its component parts and is very environmentally friendly.
So much so, that the company said it has the authority to sell U.S. Treasury high yield bonds. That right is apparently granted to it by the Environmental Protection Agency (EPA) for the environmentally sound practice of its method.
These bonds, according to the proposal that Reeves heard, would be sold to raise $100 million to finance the facility. That money would be turned over to the city which would grant $85 million back to the company. The city would keep $15 million, according to the plan.
However, according to Micron's request, all of this must be approved before August 15 so that it can begin selling bonds by early September.
Council reaction could essentially be summed up with one phrase: "It sounds too good to be true."
The council is proceeding on reviewing the proposal as quickly as possible.
A special public meeting is set for Tuesday, Aug. 10 at 4 p.m. at city hall. If necessary, it may be continued to Friday, Aug. 13 at 4 p.m.
Moreover, Reeves will be checking with the Minnesota Department of Trade and Economic Development to gather background information on Micron Rubber.
The company has entered into such an agreement with another town in West Virginia. The mayor of that town will also be contacted. While the company wants to build three facilities across the nation, no such facility has been erected. Therefore, some council concerns over noise and odor cannot be answered by seeing a pre-existing example.
The company has said there will be no on-site storage of the tires on the property. Three sites are being considered in Minnesota, but Reeves said Winsted is the front-runner because of its size, availability of land, and proximity to Highways 7 and 12.
In general, the company also likes the availability of employees and lower tax burden in this area.
The redirection of the bond proceeds to the city would enter Winsted into a trust with the company, but that trust would end when the $85 million is paid to the company.
The $15 million comes with some restrictions. The money has to be spent on city uses, such as beautification and other city projects. However, council members recognized the potential for that money to pay for any number of projects the city has been considering.
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