ACTION REQUESTED:
Title
Communication from the City Manager with a Request to APPROVE a Loan from the City's REVOLVING LOAN FUND to IVEX SPECIALTY PAPER LLC, PAPER INVESTMENT LLC AND BRENT EARNSHAW, in the Amount of $250,000.00, and to Authorize the City Manager to Execute the Necessary Documents.
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BACKGROUND: The IVEX Paper Mill is in the process of being purchased by IVEX Specialty Paper LLC, owned by Paper Investment LLC; and Brent Earnshaw is the majority owner of Paper Investment LLC. Altogether, both LLC's and Brent Earnshaw (collectively IVEX) will purchase the IVEX Paper mill for $1,025,000 as a going concern, and invest $2.0 million in machinery and equipment upgrades. A view of the property is attached (see Exhibit).The property at 1 Sloan Street consists of 125,000 sf of buildings on 6 acres of land. Currently 46 people are employed-8 managerial and 38 in warehousing/manufacturing.
Company Background
The paper mill at 1 Sloan Street was built in 1912. Since then, the paper mill has gone through several owners and on June 2015 New INDY - JV Corporation purchased the Peoria paper mill along with three larger paper mills. The specialty paper mill in Peoria was unique in that it was small compared to the other three mills, which were high volume paper mill operations.
The paper mill's main operation in Peoria takes clean recycled cardboard as raw material and coverts it into large rolls of a specialty paper products with unique qualities--thickness, strength, texture, and weatherization capacities. The paper rolls are sold to various business for conversion into: a) bag tape used to seal charcoal bags, b) crepe filters for food processors, c) carpet seam tape, and d) misc. kraft paper.
Financing Structure and Terms
IVEX's $3.025 million investment in capital investment include $1,025,000 to purchase all business assets, and $2,0 million in strategic capital improvements. In addition, a $1.25 million line-of-c...
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