Hy-Ko Products is a leading manufacturer of numbers, letters, signs, keys and display products. They provide these products to some of the largest hardware, home center, grocery, drug and mass merchandise chains in North America. The company sources its parts globally and exports products to Canada and Mexico. Hy-Ko’s steady growth necessitated a new headquarters, manufacturing, distribution and warehouse facility. Plans were developed to move over 100 employees into Summit County. A new 125,000-square foot facility was planned in the Village of Northfield, Ohio.
Find the most effective means of financing new construction.
Provide a favorable environment for international business in Summit County.
Hy-Ko was able to finance the project without a construction loan.
As a conduit, the DFA issued debt to Hy-Ko at a reduced interest rate.
Due to DFA involvement, construction materials were tax-exempt, saving $102,000.
The DFA has extensive capital leasing experience.
The DFA lobbied the Department of Commerce to establish a Foreign Trade Zone.
Project Cost: $5.5 million
$5,500,000 - Development Finance Authority Industrial Revenue Bonds
The Development Finance Authority provided conduit financing with industrial revenue bonds. KeyBank issued a letter of credit to secure the financing. Hy-Ko obtained an IRS-approved, tax-exempt variable interest rate. DFA also structured a capital lease with the following features:
Hy-Ko designs and builds the facility to its specifications
Hy-Ko claims the tax advantages of depreciation
Hy-Ko will become the owner for a nominal cost at the end of the lease term
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