Palm Plastics to expand in Bowling Green 3.25.09

Written by David Green.

By DAVID GREEN

From Wall Street to Main Street in 24 hours. David Munson didn’t think the effect of the Lehman Brothers collapse would reach Michigan that fast.

Munson, the director of corporate affairs for Palm Plastics, remembers how an important step in the company’s expansion project was nearly complete when the banking giant failed.

“We were right on the edge of getting the job done when Lehman Brothers folded, and that was it,” he said.

Since then, financing for development projects has been nearly impossible to find. In Palm’s case, no builder can come up with the cash to construct the new facility costing at least $7 million. In the meantime, Palm continues to face strong demands from customers to make more product.

The existing plant in Morenci is filled to capacity and there’s no more usable space at the temporary operation in Fayette. To meet demand, Palm was forced to locate additional manufacturing space.

The only really suitable facility found in the area, Munson said, is a former plastics factory in Bowling Green, Ohio. The building includes chillers, a heavy duty electrical distribution system, resin storage silos—most everything needed for Palm’s operation.

All equipment in the Fayette location will be moved to Bowling Green and some equipment now in storage will also be installed there.

The existing 250-some jobs in Morenci will remain here, but the expansion project called for an additional 132 jobs.

No one is happy about the change in plans, Munson said, and hope remains to use the more than $7 million worth of state grants and incentives to build in Morenci.

The state funds come with a two-year  window for development, Munson said, and that money is key to the Morenci expansion.

The delay also puts Morenci’s industrial park road project on hold, since the $900,000 CDBG funds are tied to job creation.

“Until the jobs are created,” Munson said, “Morenci will not get that money.”

Developers and builders are ready to move forward on Palm’s expansion, but the search for funding leads to a dead end.

“We don’t know when that may change,” Munson said, “but we can’t ride it out for a year.”

He has pages and pages of business cards from potential builders and their lenders, but he’s never seen the capital market shut down to this extent.

When the expansion project was announced last October, initial plans called for Palm to begin leasing a new building in Morenci this spring.

“Everybody has done everything to expedite this,” Munson said. “We didn’t foresee how difficult the economy was going to become.”

Until that changes, much of Palm’s production will move from one temporary facility to another.

  • Play Practice
    DRAMA—Fayette schools, in conjunction with the Opera House Theater program, will present two plays Friday night at the Fayette Opera House. From the left is Autumn Black, Wyatt Mitchell, Elizabeth Myers, Jonah Perdue, Sam Myers (in the back) and Lauren Dale. Other cast members are Brynn Balmer, Mason Maginn, Ashtyn Dominique, Stephanie Munguia and Sierra Munguia. Jason Stuckey serves as the technician and Trinity Leady is the backstage manager. The plays will be performed during the day Friday for students and for the public at 7 p.m. Friday.
  • Front.F.school
    PROGRESS continues on the agriculture classroom addition at Fayette High School. The project will add 2,900 square feet of space and include an overhead door that would allow equipment to be driven inside. The building should be ready for the start of school in August. Work on ball fields and a running track is also underway.
  • Front.rover
    CLEARING THE WAY—Road crossings in the area on the construction route of the Rover natural gas pipeline are marked with poles and flags as preliminary work nears. Ditches and field entry points are covered with thick planks in many areas to support equipment for tree clearing operations. Actual pipeline construction is progressing across Ohio toward a collecting station near Defiance. That segment of the project is expected to wrap up in July. The 42-inch line through Michigan and into Ontario is scheduled for completion in November. The line is projected to transport 3.25 billion cubic feet of natural gas every day.
  • Front.geese
    ON THE MOVE—Six goslings head out on manuevers with their parents in an area lake. Baby waterfowl are showing up in lakes and ponds throughout the area.
  • Accident
    FAYETTE resident Patricia Stambaugh, 64, was declared dead on the scene of a single-vehicle accident Friday morning south of Morenci. Rescue units were called around 9 a.m., but as of Tuesday, law enforcement officers had not yet determined the time of the accident. According to Ohio State Highway Patrol, Stambaugh was driving west on U.S. 20 when her Chevrolet Malibu traveled off the north side of the road and down a steep embankment, coming to rest in Bean Creek (Tiffin River).
  • Front.teacher Leading
    PRESCHOOL MUSIC—Fayette band director Jeffrey Dunford spends the last half hour of the day leading the full-day preschool class in musical activities. Additional photos are on page 7 of this week’s Observer.
  • Front.poles
    MOVING EAST—Utility workers continue their slow progress east along U.S. 20 south of Morenci. New electrical poles are put in place before wiring is moved into place.
  • Face Paint
    FUN NIGHT FUN—Savanna Miles sits patiently while Abbie White works on a face paint design Friday during the Morenci PTO Fun Night. Gracie Snead watches the progress after having spent time in the chair. Abbie was one of several volunteer painters, each creating their own unique look. Additional photos are on the back page of this week’s Observer.

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