Royal Tractor sees setbacks for move
Plans for Royal Tractor Inc. to move to Eudora are still in the works. But the move will take longer for the move than previously expected.
Jim Hardwick, Royal president, said he remains optimistic in finding a financing package to aid the move of the heavy industry machinery company. Hardwick said Eudora is still the first choice for the new location.
"As of right now, Eudora is our first pick," Hardwick said. "We still have an informal contract with Impact for the Intech Park and they are working together with us on a contract for the financing package."
Royal contacted the Eudora City Council in March, asking it to apply for a Community Development Block Grant (CDBG), a federally funded grant for developing communities and businesses. The CDBG would aid Royal's move from its current location, of which Royal's lease has expired and promoted a search for a new location. It also requested the city sponsor a total of $5.5 million in industrial revenue bonds to cover construction cost and future expansion, with a tax abatement of 75 percent over a 10 1/2 year period.
Ray Barmby, financial consultant for Royal, said a financial package for the bonds was not yet fully intact. The company withdrew its application for the federal grant under the advisement of Steven Robb, grant writer from the business and technical institute of Pittsburg State University. If Royal were awarded the grant, it would provide the company with $750,000 toward the move.
"When we were still trying to put this financing into a marketable shape, Mr. Robb said 'Look, we don't want the governor to make the award, and then say we can't use it for three months,'" Barmby said. "(Royal) went ahead and asked for it to be withdrawn and it's kind of sitting on the side in limbo. Robb advised Royal to resubmit in the next round. There are about four or five dates throughout the year."
The next application date for the CBDG is August 25, Barmby said. He said a financing package should be nearing completion within 30-45 days. Part of the delay in the financing is from high interest rates, but also in how much money the company can spend to move.
Hardwick said determining a financial package for the company has been no easy task.
"It's more than a car, but it isn't the Oz," He said. "For us, we're not a big company; this is a lot of money."
Dissuading rumors about moving into the Communicolor building in Intech park, Hardwick said the building is not big enough or designed properly to handle the company's needs. Communicolor announced it would close its doors in August earlier this year. Barmby said the company has looked into the cost of building 70-75,000 square feet now, versus the 95,000 square feet the company would need. With the company's fiscal year ending June 30, the company will examine its profits and determine when the move will be the most affordable.
"We're still working on the deal," Barmby said. "It's kind of like a jigsaw puzzle, you've got a pretty good idea of the picture, but you're three pieces short to complete it. We're trying to figure out the best course of action for Royal Tractor as we can."
Hardwick said he hopes a deal can be worked out soon for a financing package and applying for the CBDG, getting his company on the big move.
"I wish it were tomorrow," Hardwick said. "We're still out there working on it diligently every week."