JANESVILLE — A manufacturer/distributor of engines and power generation systems plans to open a warehouse in Janesville that would add up to 30 jobs to the local economy.
The city council is expected to act Monday on a Tax Increment Finance agreement with the Indiana-based Cummins, Inc.
Cummins plans to lease 187,500 square feet in a facility built and owned by local developer Jeffrey Helgesen and the Helgesen Family Limited Partnership on the city’s south side.
Under the terms of the agreement, the city would make Cummins a $187,500 forgivable loan that will be amortized at 4 percent interest over 10 years. The loan’s repayment would be linked to the creation and retention of 30 jobs. If the Cummins plant employs fewer than 30 workers in any year, it would repay a portion of the loan.
If Cummins leaves Janesville at the end of its initial five-year lease, the Helgesen partnership would be responsible for the loan’s balance.
The TIF loan is expected to help Cummins with building improvements, equipment and employee training.
Cummins is a group of businesses that design, manufacture, distribute, and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.
While doing business in 160 countries, it posted 2007 sales of $13 billion.
Mark Land, a Cummins spokesman, said the company’s Janesville warehouse would serve its manufacturing plants in Mineral Point and Wautoma, which make exhaust treatment systems for the treatment of emissions.
The Janesville plant would warehouse and distribute parts to those plants. It also would handle finished products and at some point might do light assembly work.
The majority of the plant’s employees would not be on Cummins’ payroll. Land said Cummins would contract with a third-party company for the distribution work. He stated that he didn’t know what the distributor’s wage scale would be.
“We’re not logistics experts, so we’ll hand-pick a company to do that for us,” Land said. “That’s a fairly common business model for us.”
Helgesen built the 250,000-square-foot building on Venture Drive in 2007. One tenant already occupies a quarter of the building, and Cummins would move into the remainder.
Land said Cummins plans to install warehouse racks and forklift equipment this fall.
Working with the third-party distributor, Cummins plans to create 25 jobs by June 2009 and an additional five by the following June.
“The building’s proximity to the Interstate and the fact that it was a facility that met our needs and that we could get in pretty quickly appealed to us,” Land said.
Helgesen’s building on Venture Drive originally was expected to be the home of LiquiPur Holdings, which announced in August its intention to move its bottling operation from the Chicago area to Janesville.
When Cummins expressed an interest in the building, Helgesen was able to convince LiquiPur to move to a building HDC owns at 505 S. Wuthering Hills Drive on the city’s east side.
LiquiPur is expected to add 90 jobs to the local economy.