Stinger Welding gets financial boost; tax credit is $17 million shot in the arm for bridge-builder

While Stinger Welding in Libby is the recipient of what totals to be a $17 million investment, the lion’s share of that investment comes from the company itself, said its president and chief executive officer.

“We have invested heavily in Montana,” Stinger Welding CEO Carl Douglas said Friday. “We have the potential to offer the people of Libby many jobs.”

On Thursday, the Montana Community Development Corp., in conjunction with Goldman Sachs, the Lincoln County Port Authority and Stinger Welding, announced the securing of $17 million in financing to complete the construction of a new fabrication plant in Libby for the bridge-support manufacturing company.

According to Paul Rumelhart, the executive director of the Port Authority, Stinger Welding contributed more than any other, a fact confirmed by Douglas.

According to the MCDC press release, Stinger Welding is employing about 43 currently, a fact that Douglas said Friday is about 50 percent low.

Those jobs, which now total more than 60, Douglas said, could go as high as 100 by the end of the year.

“Yes, it could be well over 100, but that remains to be seen,” Douglas said. “As long as America is building bridges, we’ll keep making materials. And, actually, Stinger Welding invested more than the lion’s share of this, but that’s as much as I’m going to say.”

Montana has invested $1.5 million; the Port Authority $3.4 million and the rest — or about $12 million — has come from Goldman Sachs and Stinger Welding. While Douglas would not reveal numbers, he did say the Stinger’s investment was “huge.”

One person who is talking is Rumelhart, who wasted no time in crediting Douglas for his investment in Libby.

“First of all, we all need to thank Carl Douglas for having the guts to invest in Libby, Montana,” Rumelhart said. “The double Superfund stigma need not be a hindrance for economic development and community growth.  The attention Libby receives for the past manufacturing and mining errors can be turned into community pluses when approached in a positive manner.  Carl’s ability to “stay the course” over the past three years is witness to this,” Rumelhart said. 

In addition to Libby, Stinger Welding also operates a large steel-fabrication plant in Coolidge, Ariz., where it is the premier steel bridge component fabricator for the Southwest.

Stinger chose Libby over several other plant locations because of its proximity to potential markets in the Northwest, direct access to rail lines in the Kootenai Industrial District, lower comparable labor costs for skilled labor and the economic incentive package offered by Lincoln County, Libby, and the State of Montana.

“We are excited to move forward in the completion of our new fabrication plant in Libby,” said Douglas.

“Libby’s workforce is full of the type of tough, hard-working and highly skilled individuals it takes to fabricate major steel bridges in the United Sates. We are proud of the support from the people of Libby, Lincoln County, and the State of Montana.”

Stinger will hire workers at various skill levels, with wages ranging from a $13.55 per hour minimum to $16 average hourly wage.

Salaried positions will also be available.

The Flathead Valley Community College (FVCC) added welding classes at its Kalispell and Libby locations and graduated 20 welding students in April targeted to meet Stinger’s workforce requirements. Hiring has begun with applications taken through the Kootenai Job Service in Libby.

The new 105,000 square foot Libby plant will provide steel for bridge infrastructure projects in the Northwest. Current operations in Libby have already produced steel products for use in projects in Spokane, Portland and Seattle.

Stinger expects the new construction to be complete next month. Production should begin in the fall with a ramp-up to full capacity varying with market demand.

Major equipment will be delivered and put into operation during the next two months.

Construction of the new facility began in 2009, but has been delayed due to financing challenges.

The deal came together as a result of a federal financing program written by U.S. Sen. Max Baucus and through his efforts to profile Montana’s business opportunities to national investors including Goldman Sachs at an economic development summit.

The tax-credit financing was made possible through MCDC’s allocation of New Markets Tax Credits.

The New Markets Tax Credit program is a federal tax credit tool that provides incentives for private investment in projects that help revitalize low-income areas.

Before 2008, the program had been used primarily in larger urban areas. However, because of changes in the program, spearheaded by Baucus in 2007, a portion of the tax credits were required to be invested in rural states.

The tax credits will fill the financing gap and make the project possible. In addition to the tax credit financing, the project came together with the help of a significant equity investment by Stinger Welding, Inc., $3.2 million from a previous insurance settlement reached by the Libby industrial district, an $800,000 Community Development Block Grant and a $400,000 grant from the Big Sky Trust Fund.

“Folks in Libby need jobs more than ever and I couldn’t be more pleased to see this opportunity going to work for a community that deserves an economic boost. MCDC has done a great job making the New Market Tax Credits program a viable option for Montana businesses to grow and prosper,” said Baucus.

MCDC received its first-ever allocation of $40 million in NMTC in 2008 and a second award of $56 million in 2010. The Libby project came out of MCDC’s 2010 NMTC allocation and its partnership with the Urban Investment Group at Goldman Sachs.

“This is an ideal project for us to expand from our traditional expertise of urban investing to a rural community because of the rapid and significant impact it will have on the ongoing revitalization of Libby, Montana and the surrounding areas,” said Alicia Glen, Managing Director and Head of the Urban Investment Group at Goldman Sachs.

Still, Rumelhart said cooperation came from many sources.

“The support the project received from the State of Montana Department of Commerce played a critical role in this development,” Rumelhart said.

“Former Director Tony Preite, Assistant Director Andy Poole, Sections leaders Quinn Ness, Karyl Tobel and section manager Nancy Guccione and program manager Angela Nelson all contributed to the development of the project and provided much needed grant capital to Lincoln County and the City of Libby.  (Former) County Commissioner John Konzen’s and Libby Mayor Doug Roll’s sponsorship of the Community Development Block Grant and Big Sky Trust Fund programs provided the funding for the most sophisticated overhead cranes in the Northwest.”