Wed Mar 17 2010
by Mike Lesko
Associate Editor
Stow -- The city hopes to help keep a Stow company afloat -- and 110 jobs in Stow -- through a complex loan plan involving the state.
The proposed loan would assist Wrayco, a Hudson Drive company that manufactures fuel and hydraulic tanks that are an integral part of heavy construction equipment.
"The benefit to the city is maintaining Wrayco as a corporate resident in Stow," said Mike Weddle, Stow's economic development director.
The plan would save the company's 110 jobs, Weddle said.
"The owners of Wrayco are to be commended," Weddle said. "It's a great company with great leadership."
Gary Gibb, Wrayco president, said the plan is innovative.
"It is very much appreciated," Gibb said. "This is very encouraging. We plan on remaining a viable manufacturer for a long time."
The plan involves Stow's Community Improvement Corp., a 19-person group.
City Council approved the Stow CIC's economic development loan plan to help Wrayco on Jan. 14.
"If not for the state and the CIC, we could easily have another plant closure in Stow," Weddle said.
The next step in the process was achieved Jan. 25 when the state's Development Financing Advisory Council OK'd the loan.
At that meeting, the Stow CIC was approved for a $1.2 million direct loan for a seven-year term, according to Gov. Ted Strickland's office.
If the Ohio Controlling Board approves the plan, that would be the final hurdle, and Wrayco should have the loan documents in March.
Weddle said the plan works like this:
Stow's CIC applied for the $1.2 million loan, which has been tentatively approved, through the Ohio Department of Development.
The CIC will then take the money and buy equipment from Wrayco valued at $1.7 million or higher. Wrayco will take the $1.2 million and use it to pay down existing debts.
Since the CIC has Wrayco's vital equipment, it will lease it all back to Wrayco. The lease payments will be exactly the same as the loan repayment amount that the CIC must make to pay off the loan.
Although the plan may sound complicated, Fritschel believes it will work out.
"This has been done successfully before (in other communities)," Fritschel said.
Law Director Brian Reali called the plan a "weapon in our economic development arsenal."
Gibb praised the city of Stow and CIC for its involvement.
Wrayco has been in Stow since the mid-1980s.
"Without this plan, there is a good probability that Wrayco would have had to close its operations," Weddle said.
Weddle said the CIC will not be responsible for any potential repayment of the loan.
"The loan would be absorbed by the state if it is not paid off," Weddle said.
E-mail: mlesko@recordpub.com
Phone: 330-686-3917
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