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Serving Northern St. Louis County, Minnesota

Lamppa project agreement heads to city council

Marshall Helmberger
Posted 7/2/19

TOWER— City officials here were expected to approve an agreement on Monday night that will ensure that Lamppa Manufacturing moves into their new manufacturing facility as soon as new equipment is …

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Lamppa project agreement heads to city council

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TOWER— City officials here were expected to approve an agreement on Monday night that will ensure that Lamppa Manufacturing moves into their new manufacturing facility as soon as new equipment is installed. The action came after the Timberjay’s early 4th of July week deadline, but the terms of the deal were not expected to be controversial.

Representatives of the city, Department of Iron Range Resources and Rehabilitation, and Lamppa Manufacturing met last week in Eveleth to get the project back on track after delays and disagreements over some of the equipment installed in the facility prompted Lamppa Manufacturing officials to walk away.

Under the agreement worked out last week, the city would agree to swap out the current welding room fume extractor for a different unit, will incorporate the cost of a gas manifold system for the welding station (at a cost of $8,300) into the project loan, will cover the company’s moving expenses (estimated at $4,000), and will provide free rent from the anticipated move-in date of Sept. 1 through the remainder of the year. The term of the original 10-year lease will be extended to Dec. 31, 2029.

The Tower Economic Development Authority was expected to approve the agreement at a special meeting on Monday night, followed immediately by a special city council meeting to authorize the deal. Lamppa Manufacturing owner Daryl Lamppa and manager Dale Horihan have already signed off on the agreement.

The new sweeteners will be rolled into the overall project, which means the city won’t have any additional up-front costs associated with the settlement. The change-out of the fume extractor is the only big ticket item, with an estimated cost of $54,000 minus the return value of the unit that was installed but never used. The city has more than sufficient funds remaining from the initial $1.8 million non-recourse IRRR loan to cover the additional expense.

The new terms, assuming they are approved by the city council, should allow Lamppa Manufacturing to move into their new home by Sept. 1. The company has seen explosive growth in demand for their wood furnaces, which are certified as the most efficient and cleanest-burning wood furnaces manufactured in the U.S.

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