Coin-Tainer regrouping after fire

Coin-Tainer, whose factory in the Milaca industrial park was destroyed by fire on Jan. 15, may get some help from Mille Lacs County to rebuild.
The county commissioners met in a workshop on March 4 with community leaders to discuss the Coin-Tainer situation and by the end of the discussion, the board was considering tax abatement help if possible. The County Board authorized County Administrator Roxy Traxler to draft proposals for modifying the county’s property tax abatement program, which now doesn’t have a provision to help in catastrophic situations like Coin-Tainer’s. The board would then consider modification options for possible adoption at its next business meeting.
Sixty-three employees worked at the Coin-Tainer plant, manufacturing coin wrappers and ticket rolls used at more than 90 percent of retail stores nationwide. The company also employed an additional 50 independent contractors.
Since the fire, the company’s owners, Dave and Barbara Walters, have restarted much of Coin-Tainer’s production through contracting with competitors. Dave Walters told the Union-Eagle last week that 25 Coin-Tainer employees who lived in the Milaca area have been doing work for Coin-Tainer in Elk River since the fire. He also said he plans to build a new factory in Milaca.
“We’re buying all the products we used to manufacture, from competitors, set up through licensing agreements,” Walter said. The Coin-Tainer employees are doing packaging, labeling, boxing, taping and shipping, and some are also rebuilding Coin-Tainer manufacturing equipment, according to Walters. He said that he is servicing 100 percent of the customers that he has.
Walters said his plan is to open a new plant in the Milaca industrial park by October. He is exploring if it would be on the same location as the old factory or at another spot. The plant that burned was 50,000 square feet and the new plant would be 30,000 square feet, he said.
The County Board, along with Milaca City Administrator Greg Lerud, county economic development coordinator Richard Baker and First National Bank of Milaca Vice President Kirby Allen discussed how they could assist in Coin-Tainer rebuilding.
Lerud said an option for the city of Milaca to explore is tax increment financing. He explained that the city could look into establishing a TIF district to encompass the site where Coin-Tainer would rebuild. TIF works by capturing the taxes paid on the increased value of a project compared to what existed before.  Those captured taxes are then used to reimburse the developer, over a maximum of eight years, for eligible infrastructure and other costs that the developer incurred when doing the project.
The workshop discussion began with University of Minnesota Extension Educator Liz Templin presenting an economic impact analysis of the Coin-Tainer fire on the county, and she showed a graph explaining what sectors make up the employment in Mille Lacs County overall. Templin noted that the analysis gives “ball park” estimates because it was prepared in a relatively short amount of time. If Coin-Tainer folded completely, there would be a job loss equal to the 63 employees who had worked in the plant plus the 50 independent-contractor workers. The effect of the lost plant jobs would be considerably greater than losing the independent-contractor jobs because of the difference in pay, Templin noted.
Walters said after the workshop that the figures in the analysis, with the exception of the listed number of Coin-Tainer employees, do not represent the company’s actual data. Walters said he will not divulge the actual data because that could be used by his competitors.
If Coin-Tainer actually paid its employees an average wage with benefits of $48,600 that the analysis estimated, there would be a very long line of people waiting in line to apply for employment at Coin-Tainer, Walters said. He also said the analysis’ estimate of a $3.1 million plant payroll and of $23.2 million in annual sales are not representative of the company.
But what Templin and her associates at the U of M did achieve in producing the analysis was to show that there is a big ripple effect from a business that ceases operation.
It goes far beyond the lost job income and sales revenue; it also effects the wholesalers and other companies that gain revenue from supplying materials and more, Templin explained. Also, the restaurants and whatever other businesses that employees spend their income at suffer too, Templin said. The unemployed, for example, put off remodeling projects, and people may forget how much utilities and telecommunications are impacted from a company closing down, Templin noted.
Workshop attendees agreed that assisting Coin-Tainer has to happen as soon as possible.
Baker noted that area leaders looked around Milaca for a building Coin-Tainer could operate out of to go back into operation right after the fire, but a suitable structure wasn’t available.
Baker asked the county commissioners if they would consider adding a clause in its property tax abatement policy so the county could also assist businesses that have catastrophes such as fires. When someone wants to construct a new building or buy new equipment, they have to put 20 percent down, so it gets pretty costly, Baker said.
When Traxler asked if the County Board is interested in looking at modifying its tax abatement rules, Board Chairman Phil Peterson answered that it is, and that it also has to act quickly.
Commissioner Genny Reynolds said this will be a good opportunity to “ramp up the options to help more businesses.”
“And respond quicker,” Peterson said.
The board also has to determine what effect modifying the tax abatement rules will have on existing businesses, Traxler suggested.
“Tax abatements are never popular with existing businesses, but this is a different economy now,” Peterson said.