Carson City, NV, Nov 05, 2013 -- USDA and Heritage Bank of Nevada Announce $5.6 Million Loan
Manufacturers Produce Earthquake Protection Systems
MCCARRAN, Nov. 5, 2013 — USDA Rural Development and Heritage Bank of Nevada today announced they have partnered to provide a $5.6 million loan to Foley Tahoe-Reno to support two affiliated manufacturers that design and produce earthquake protection products.
Heritage Bank of Nevada was the lender on the project, with a Business and Industry loan guarantee from USDA Rural Development. Foley Tahoe-Reno (FTR) is the loan recipient and owns the building in the Tahoe-Reno Industrial Center where the two affiliated manufacturing companies, Dynamic Isolation Systems (DIS) and Scougal Rubber Company operate.
FTR had considered selling the property when their existing loan reached maturity with a substantial balloon payment and their original lender required them to pay a large amount to cover the decline in the building’s appraised value. If FTR had walked away from the building, both companies would have been forced to relocate, most likely out of the area, taking with them over 170 skilled jobs and international trade.
Thanks to Heritage Bank of Nevada and USDA’s Business and Industry loan guarantee, the owners of the building were able to secure funding to refinance the building. This allowed both companies to continue their operations, saving more than 170 jobs; and enhancing opportunities for international trade. DIS exports more than 80% of its product, while most of Scougal Rubber’s contracts are within the United States.
Kevin Callan, of Foley Tahoe-Reno, said the company had made a sizable investment in the facility to accommodate the special manufacturing requirements of DIS and Scougal. “We wanted to work with a local Nevada bank and Heritage Bank really stepped up for us. The USDA-backed loan we now have in place allows us to focus on our long-term growth plans, and to direct our efforts towards providing high quality products to both the US and international markets.”
“As a local community bank, we were able to meet face-to-face with the principals of FTR to understand the true value of their company assets,” said Tom Traficanti, Vice President of Heritage Bank of Nevada.
“We were presented with a win-win opportunity to restructure their loan using the B&I loan guarantee, giving them confidence to productively use their working capital to save and create jobs in our community,” Traficanti said.
USDA Rural Development State Director Sarah Adler noted that manufacturing is a priority for the federal agency. “Our goal is to assist firms in attaining long-term financing so that they can grow their business, and this project is right on target. It is even more exciting that product manufactured is exported out of the country. That supports the nation’s trade balance as well.”
Scougal Rubber manufactures fused and molded rubber products ranging from pads and load plates for bridges/freeway overpasses, vibration isolators and industrial molded products used in nearly every industry.
Dynamic Isolation Systems (DIS) is a world leader in earthquake protection, designing and manufacturing a variety of life-saving earthquake protection products, which include seismic isolator systems, that are sold worldwide. DIS is in a very technical industry which requires skilled employees and engineers. DIS has over $20 million in contracts in 10 different countries.
Currently, the two manufacturers combined employ 170 people and pay salaries and wages of close to $7 million a year. By working together, Heritage Bank, USDA, and Foley Tahoe-Reno have turned what could have been another victim of the Great Recession into a business growth success.
USDA Agriculture Secretary Tom Vilsack noted that today's funding announcement is another reminder of the importance of USDA programs for rural America. A comprehensive new Food, Farm and Jobs Bill would further expand the rural economy. He said that's just one reason why Congress must get a comprehensive Food, Farm and Jobs Bill done as soon as possible.
President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values.