GREEN BAY, Wis. (AP) — Wisconsin’s local economic development groups began to feel the impact of the Great Recession in 2009, a recent analysis of public records found.
There were only a few business loan write-offs in central and eastern Wisconsin through 2008. But they jumped to 12 the following year and continued to average a dozen per year, Gannett Wisconsin Media reported.
The news organization’s investigative team evaluated data from more than 40 municipalities from 2004 to 2013. It found that the groups surveyed issued an average of 67 loans annually.
Plastic Composites, a Green Bay startup, received a $125,000 loan to turn milk jugs into plastic lumber. Officials attributed the internal struggles of the business, including management and competition issues, to the recession. They said it caused a lower demand for construction materials. Most of the loan was written off by Brown County in 2011.
Chad Pelishek, Sheboygan’s director of planning and development, said the city helped businesses refinance and push off payments in an attempt to limit the number of write-offs. Sheboygan has written off six loans totaling nearly $800,000 since the recession.
Gannett Wisconsin Media examined nearly 1,000 economic development loans in its investigation.
It found that nearly 25 percent of the money loaned in the past 10 years was in one transaction with Mercury Marine in Fond du Lac. The boating manufacturer was struggling, its workforce was cut in half and it had to decide whether to close operations in Fond du Lac or Stillwater, Okla. Revenue dropped 50 percent between 2007 and 2009.
The company decided to keep its world headquarters in Wisconsin after it received a $50 million loan from Fond du Lac County and reached a new agreement with the local union. Up to $2.1 million of an annual $5 million loan payment is forgiven if targets are met, which they have been so far. The company has grown back up to 3,000 employees in the Fond du Lac area and it said investments have totaled $500 million since 2009.
Gannett Wisconsin Media reported that other economic development groups weren’t so lucky.
Heus Manufacturing received an $850,000 loan in late 2007 to revive a plant that had been recently shut down. The company struggled through the recession and ended up closing within two years. Calumet County wrote off the entirety of the loan.
Morgan Aircraft, based in Oostburg, also struggled to expand after the recession. In 2009, the state issued a $30 million incentive package so the company could build a 600,000-square-foot manufacturing plant at the Sheboygan County airport. The county approved a 50-year lease on the property and a $686,000 loan to help keep Morgan Aircraft afloat. But the lease was terminated after the company failed to pay rent, and it is expected to default on the loan.
Information from: Press-Gazette Media, http://www.greenbaypressgazette.com