The Lebanon City Council has authorized a $400,000 advance to fund improvements that are intended to keep the Ice Cream Factory in business.
At its meeting Tuesday night, the council approved economic development funds that will pay for electrical improvements to the plant building at 1201 Ice Cream Way. The money is to be repaid within one year. Councilman Mike Evans cast the only “no” vote.
According to the staff informational sheet from City Administrator Troy Schulte, the money will be provided to a trustee “who will disburse the funds upon the submission and approval of eligible expenses by the Ice Cream Factory for necessary electrical system improvements.” The work must be inspected and approved by the city before the funds are released.
At Tuesday’s meeting, the council heard via video from Gail Kurpgeweit, CEO of PNC Brands, which bought a controlling interest in the Ice Cream Factory last October. She said the plans for the plant are to increase production capacity and create more jobs.
“That plant has about 90,000 square feet of production capacity that we're only using about 20,000 (square feet) of it because the electrical systems in the plant do not allow for us to bring in any additional equipment,” she said.
She said there is an unused portion of the building that can be put to work for producing frozen meals and sauces and other products that can be sold at retail. She said this would solve another problem, which is that the ice cream business is seasonal.
“So this time of year, from about October all the way to January-February, it's really tough to make sure everybody has full-time hours and that the plant is operating effectively because the ice cream market slows down so much during that time,” she said. “So building out that second floor will allow us to keep that plant running all year long and keep a steady stable growth for the community. We need that electrical to be upgraded and once that's done, it really opens up opportunity for the plant to be successful and for us to be a really valuable employer.”
Councilman Dan Mizell asked Kurpgeweit why she did not get private financing for the project.
She said she had not originally been looking to buy a plant but needed the facilities as a copacker for a new milkshake product. She said she heard the plant was going to close Oct. 31.
“We’d already invested a lot into that team to get that product producing,” she said.
Kurpgeweit said she had to take on more debt than originally intended and had to use funds that would have paid for plant improvements. She said she has bought about $2 million in equipment but was not able to get financing for the electrical work.
According to Schulte, the funds will be provided at a zero-percent interest rate and are to be repaid within one year of the funds being drawn from the trustee.
“In the event of non-payment, the City of Lebanon will retain ownership of the property that is currently part of a Chapter 100 Industrial Development project area,” he wrote.
The plant was originally built in the 1940s and is listed on the National Register of Historic Places.
