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MassDevelopment In The News
State Helps K&K Thermoforming Get Room to Grow in Southbridge
January 5, 2007: Worcester Telegram & Gazette, by Brian Lee
SOUTHBRIDGE — After five years, Harold A. Keller and family were growing out of their behind-the-scenes business making plastic products for packaging in medical and electronic industries.
The company, K&K Thermoforming Inc., is now packing up from leased space on Ashland Avenue for its own digs at 394 Elm St., where it will share space with the J.I. Morris Co.
K&K Thermoforming has 25 employees, including Mr. Keller’s sons, David and Steve, who run day-to-day operations and sales, respectively. The company’s purchase of the 91,500-square-foot building from J.I. Morris Co. will allow K&K to continue to grow and add three more workers. K&K plans to move by month’s end.
J.I. Morris Co., a longtime manufacturing business co-owned by the Morris and Dirlam families, isn’t going anywhere. It is vacating a two-story section of the building, consolidating into a one-story level that will be shared with K&K, with additional space for rent. J.I. Morris’ continued use of the building space was a condition of the sale as the company, Vice President Peter B. Dirlam said.
"We have a lot of heavy equipment in place, all wired in, and we wanted to retain that space," Mr. Dirlam said.
The Morris company moved to Elm Street in 1941; at the time, it was a growing eyeglass accessory business making temple covers, caps and small screws. The rise of chain stores and imports, and steeper requirements of private label packaging, made it no longer feasible to continue the line of comfort products offered to the retail trade, Mr. Dirlam said. It now produces industrial polishing pads and precision miniature screws.
The Morris company has nine employees and, like K&K Thermoforming’s workers, most live in town or in the region.
Both Mr. Keller and Mr. Dirlam said they were thrilled to be able to keep the business in town.
Mr. Keller, a board member of the Tri-Community YMCA and Harrington Memorial Hospital, both in Southbridge, said, "Our long-term goal is to be a very successful employer in town."
Mr. Keller said the company’s product is used in a process that creates packaging for the medical and electronic industries. K&K’s product line also includes clamshell and blisterpack packaging, as well as plastic covers for electronic devices.
Mr. Keller said two other manufacturing companies signed on to lease space in the Elm Street building, consuming all of its manufacturer space. He declined to identify those companies. He said office space would be available in the Elm Street building in about two months.
Mr. Keller said he also plans to make improvements to the Elm Street building. The acquisition and rehab of the building is being aided by the Massachusetts Development Finance Agency, according to a press release from the agency. As the state finance and development authority, the agency works with businesses, financial institutions and local officials to stimulate economic growth.
The agency announced late last month that K&K "will use proceeds from a $2,000,000 tax-exempt bond supported by a $200,000 mortgage insurance guaranty to acquire and rehabilitate an industrial building located at 394 Elm Street in Southbridge," according to www.massdevelopment.com.
"MassDevelopment’s role in the process is that we’re the conduit issuer," spokesman Adam M. Bickelman said in an interview. "So we assess the financial feasibility of the financing package. We basically partner a private-sector investor with a borrower."
TD Banknorth is the private-sector investor for K&K Thermoforming, and it purchased the bond.
Other local borrowers using the state program in recent years have been Opticonx, of Webster, Old Sturbridge Village, Brookside Terrace Associates Limited Partnership of Southbridge, Optim Inc. of Sturbridge, The Bridge of Central Massachusetts Inc. of Southbridge, and Southbridge Photo Lab.
Also, Masonic Nursing Home in Charlton, developer Peter LaMountain of Oxford, Clean-Start Redevelopment Co. of Webster, Rehabilitative Resources Inc. of Sturbridge, and Overlook Communities in Charlton.
"It’s important to note that this is not taxpayer money," Mr. Bickelman said. "It’s all private-sector investment; the benefit comes from the savings that the investor realizes by not having to pay federal taxes. It’s a three-pronged process, with MassDevelopment in the middle as the issuer of the bonds."
The tax-exempt bond for K&K will bring 1 percent to 2 percent annual savings over the term of its loan, he said.
© Copyright 2007 Worcester Telegram & Gazette.
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