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LISBON -- The Columbiana County Port Authority board authorized the issuance of bonds for up to $11 million in a lease deal Monday that will help Hickey Metal Fabrication construct a new industrial/office building at the Salem Industrial Park.
CCPA Executive Director Brittany Smith said the move involves the use of a capital lease, a financing power that port authorities have to promote economic development or provide incentives to developers.
"This is a very big deal. We've been working really hard the past few years to promote economic development and port authority powers. This is the first capital lease that the port authority has done in my time at CCPA (10 years), but it's a huge tool used across the state regularly. We're excited to support the first one and hope it acts as a catalyst for more development," Smith said.
The board held a special meeting via Zoom Monday afternoon to approve the resolution which specifically authorized the issuance and sale of port authority revenue bonds in the maximum amount of $11 million for the purpose of financing a portion of the costs of acquiring, constructing and otherwise improving port authority facilities for the benefit of OH-LLN, LLC or an affiliate, which is a real estate and corporate entity connected to Hickey Metal Fabrication.
Attorney Jessica Ice of Kutak Rock, the bond counsel for the deal, which also involves GAX Capital, explained that the port authority is now the ground lease holder for the OH-LLN, LLC property at the Salem Industrial Park, which consists of 29.544 acres at 1230 Salem Parkway, Salem, and as part of the agreement, the port authority issues the bonds for the construction project through the capital lease, contracting with the company to build a 63,224-square-foot facility and lease the facility to the company. The capital lease allows the company to receive a sales tax exemption on the purchase of the construction materials only, saving the company some money.
Ice said it's all about economic development, noting that sometimes projects can't go forward without incentives to help out. The key purpose will be facilitating job growth, with 5 to 15 jobs expected to be created.
She offered kudos to Smith for using the tools available.
Besides the jobs created inside the new building, Smith said the project will create construction jobs, too. She said the CCPA will work with Hickey Metal Fabrication to get the contractor lined up, with plans calling for construction to start later this year and to finish next year at this time.
The total price tag for the project is up to $11 million, so she wasn't sure what part of that would cover the materials, noting that the sales tax break is only for the construction materials, not labor. The capital lease is up to 45 years but the company can do early termination.
No port authority money is involved, according to Smith.
She credited her great team, her supportive board and great partners with being able to do a deal like this, saying "we can be creative when looking at capital stacks," referring to financing.
She said they're all excited to get the first capital lease done in Columbiana County.
Smith also spoke about how the port authority can help other companies and developers, too, sending them this message.
"We're here to talk about how to get a project done. If you have a project, call us first to see if we can provide incentives," she said.
The next regular meeting of the CCPA board is set for 5 p.m. Nov. 23.