By Candace Renalls
A 30,000-square-foot speculative building next to the Range Regional Airport in Hibbing that’s been vacant since it was built five years ago has a likely tenant lined up.
Detroit Diesel Remanufacturing, based in Hibbing, is not only looking to move its operations to the site but to build an addition and create about 50 jobs. That would bring its work force up to about 150, according to the Iron Range Resources & Rehabilitation Board.
To make it happen, the Chisholm-Hibbing Airport Authority is seeking a $2.5 million loan from IRRRB to pay for the build-out to accommodate the company’s office, storage and manufacturing needs.
The IRRRB will consider the project and the loan at its meeting Thursday in Eveleth. The facility was built with a $1.625 million IRRB loan.
According to the airport authority’s website, economic development incentives and support assistance would be available to a qualified business tenant.
The company — also known in Hibbing as DMR Electronics — designs, manufactures and remanufactures industrial electronic components and wiring harnesses for trucks, buses, trains and heavy equipment. It would not only occupy the new facility’s entire 30,000 square feet, but it would build an addition to meet its expected need for 40,000 square feet of additional manufacturing space, officials said.
The company, which has been successful in Hibbing since its beginnings in 1987, is “busting at the seams” at its current Hibbing site, IRRRB Commissioner Tony Sertich said in a news release.
Its international market is growing, including a $6 million manufacturing opportunity that it cannot accommodate at its current facility, according to the IRRRB.
Sertich predicted Detroit Diesel will thrive in the new customized space near the airport.
But Shaun Germolus, the airport authority’s executive director, was cautionary, calling Detroit Diesel a potential tenant at this point. The airport authority has talked with “lots of potential tenants” in the past five years; talks with Detroit Diesel began a couple of months ago, he said.
Much needs to happen before it’s a done deal, he said.
First, the loan needs to be approved.
“It’s a concrete shell with a dirt floor,” Germolus said of the building set on five acres on Minnesota Highway 37. “We would have to complete the interior work, create offices and install the heating (systems).”
A lease also must be negotiated. And DMR’s parent company would have to approve it.
“A lot of things can happen,” Germolus said. “But so far, we’re pretty confident things will progress here.”
LP siding expansion
Also Thursday the IRRRB will consider a $2 million loan to Nashville-based LP for its $7.05 million expansion in Two Harbors.
The company has manufactured siding there since 1985 and wants to rebuild the existing press to increase capacity. The expansion would increase LP’s annual use of wood from 80,000 cords to about 100,000, while decreasing plant production costs.
The expansion also would create 17 new jobs and retain 112 jobs, according to the IRRRB.