Plans to expand the AMSOIL Center on Susquehanna Avenue got a jump start Tuesday night when councilors approved issuing $10 million in industrial development revenue bonds for the company's $15 million expansion project.
The bond issue is key to the company financing the project, said John Hosler, AMSOIL vice president of finance. He said the council's decision Tuesday night provides the company with a low interest method to finance a portion of the planned expansion and could save it $1 million.
Although Superior will issue bonds on behalf of AMSOIL, the company is wholly responsible for repayment.
After seeing the problems the city of Duluth encountered regarding debt for the Northwest Airlines maintenance facility, it was a point Council President Ed Anderson wanted to make clear -- the city has no liability for debt incurred.
Finance Director Jean Vito said the bonds will have no impact on Superior's debt or borrowing capacity.
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The city is a conduit issuer, said Attorney Bob Toftey of Fryberger Buchanan Smith and Frederick PA, who represents Superior on development issues. He said the bond proceeds go to AMSOIL and are secured by a bank letter of credit.
Industrial development revenue bonds have been used in the past for business developments such as Partridge River, which was developed on Connors Point.
The decision to issue the bonds was unanimous.
Officials of Superior-based AMSOIL, which manufactures synthetic lubricants, last week announced plans to expand their Susquehanna Avenue center, a move that, in the next five years, could add up to 54 employees companywide and increase blending capacity by about 250 percent to meet growing demand worldwide. Plans include a new bulk loading area that will triple the number of rail cars that can be filled at one time and enclosed and indoor tanks farms to improve efficiency and employee safety.
The expansion comes just three years after AMSOIL purchased the 371,000-square-feet building that once housed Fleming Foods. AMSOIL currently owns a half dozen buildings in three Superior locations with more than 650,000 square feet of office, production and warehouse space.
"I'd just like to say thank you," Anderson said. "For that Fleming building to be returned to a useful purpose and to see the AMSOIL logo up there and know that is a business that's grown here in Superior and its been here since the beginning -- that's wonderful."
Shelley Nelson can be reached at (715) 395-5022 or snelson@superiortelegram.com .
