Racine, WI, Apr. 29--Alloc has sharpened its threats to reduce future investments here if the city takes back some land the company has not used, according to the Racine Journal-Times.
Racine Mayor Gary Becker recently asked Alloc to put some money on the table to back up its promises to expand onto 15 or 16 additional acres it was given in 1997. The five year deadline for building on the additional land has expired, as well as a one year extension the city gave Alloc.
The original October 1997 contract called for the city to reclaim the extra land if Alloc did not develop on it within five years. The deadline expired in October 2002.
Alloc was given a one year extension so it could build in 2003. That deadline expired last October.
The company president's response to Becker was to reject the request for a bond and to have him to wait until the end of this year for an answer on expansion.
"Based on the threat of having needed property for expansion reconveyed, the board of directors of Alloc Inc. had decided to re-evaluate its total position in Racine," Alloc President Claes Wennerth warned in his written response to Becker.
"The board of directors further has rejected the proposal of a performance bond."
Becker said Gordon Kacala, Racine County Economic Development Corp. executive director, wants to "figure something out, and I want to figure something out."
However, Becker continued, "The bottom line's going to come down to if they can show us a plan for how to use the land and when it will happen.
"And I'm not convinced of that."
Kacala declined to comment.
Wennerth, on behalf of Alloc, a Norwegian laminated flooring manufacturer, also asked in his letter that Becker delay a reconveyance of the property deed until year's end. During that time, the company would complete its investment analysis and preparatory work for the 2005 budget year.
"A task that now has become significantly more complicated with the need for alternative locations to Racine," Wennerth added.
"My gut (feeling)," Becker said, "is, no, I'm not going to wait till the end of the year--unless there is something shown to me that I should wait till the end of the year."
Becker said it is his job to enforce a contract entered into by the city of Racine. "I have legal obligation to enforce this; it's not a personal decision," he said.
A different local company needs land for expansion, Becker said, and no significant parcels now exist.
In 1997 Alloc was sold the land for $1 so it could build its North American headquarters and a manufacturing operation in Olsen Industrial Park. At the time, Alloc was predicting 200 or more jobs here; the actual number so far is 42.
Wennerth recently said Alloc will expand next year, bringing the possibility of at least 20 more jobs.
In his response to Becker, Wennerth wrote that "significant preparations for the investments on the property in question have been made but are not completed.
"The timing of these investments will not be dictated by the city of Racine, but the location of them clearly can be, and it is the responsibility of the board of directors of Alloc Inc. to establish the most favorable conditions for these investments in the USA."
