By Sara Quam
Courting businesses is something the Luverne Economic Development Authority is getting used to. This time, though, Director Tony Chladek holds out more hope than usual.
If located in Luverne, this Burnsville company expects to employ up to 71 workers within three years.
ReiTech Corporation is a manufacturer and marketer of a safety device called Easy Off Power Control. It is installed on heavy equipment used in educational, industrial, food and home workshop settings. The shut-off mechanism is designed to reduce machine accidents.
Jack Reiter, president and CEO, presented to the Luverne Economic Development Authority Thursday. He told the story of how the product was dreamed up.
"My dad was a school teacher during the day and ran a furniture shop at night. He was cutting wood on a table saw one time. … He was holding the piece and feeling around trying to find the push-button and kept missing it so he took his eyes off his work to look at it and when he did, the piece kicked back and cut his thumb off — that’s how the product was born."
Reiter started designing the product that is retrofitted to equipment like table saws. The fitting puts a large stop button at knee level which allows the operator to push the button with his knee while keeping hands free for work. It’s called "simple, convenient, instinctive."
ReiTech contracts:Ethan Allen Co.AristokraftNorthwest AirlinesMobil OilSylvaniaThe Boeing CompanyUnion Pacific RailroadLucent TechnologySteinway and SonsHarley DavidsonMiller BrewingNational Park ServiceUSDA Forest ServiceFord Motor Co.Texas A&M UniversityU.S. Postal ServiceAshley FurnitureReiTech is negotiating with others such as Los Angeles County Schools, San Bernadino (Calif.) Schools, Hexcell Corp. and New York Public Schools.
LEDA’s involvement
LEDA members felt strong enough about ReiTech’s potential that they sent the company a proposal. The city said in a letter to the company that "We feel we can offer the following:"
o$550,000 Signal Bank loan to be used for both old and new debt.
o$250,000 LEDA interest only/low interest loan for new debt contingent upon city approval and Signal Bank loan.
o$150,000 of regional low interest loan financing for new debt contingent upon Signal Bank loan approval, city loan approval, available collateral position and board approval.
oA renovated 11,000-square-foot building (the former Jubilee) that Luverne would pay rent on for a year — a $60,000 value.
oA new building for the company constructed (while ReiTech is in the above building) with competitive lease arrangements.
oCustomized training for employees to be held in-house through Minnesota West Technical College.
oWorkforce recruiting through a headhunter that has an estimated value of $10,000.
Not all items listed in the proposal would be provided directly by the city, but the city would assist ReiTech in accessing those sources.
The company
ReiTech markets its product as unique because the "stop" area is 100 times larger than the push-button controls. It can be retrofitted to almost any machine.
The future for the company has been painted as a bright one. It has been asked to start surveying for the first of 19 plants for Chrysler Corporation. It is working on a contract that would mean an automatic 3,200 distributors in the United States.
The city looks into the total financial package of companies when trying to get them to Luverne. ReiTech provided balance sheets, revenue sources and expenses, projections and income tax returns.
One aspect of the company that could ensure its market is its hiring in school and government agencies. ReiTech offers inspection, installation and assessment services along with its sales of the product.
With safety as its selling point, the Minnesota OSHA office and Minnesota Department of Health have asked the company for services already.
In the presentation, Reiter built up the company as already established, saying it has 10,000 units of equipment already and is in the commercial stage. In other words, it’s not in product development stages.
He said, "Seven years ago I quit everything I was doing and put the product into marketable form that meets all regulations."
The city is hopeful the proposal will meet with favorable reaction from ReiTech, but many other cities are trying to strike a deal at the same time.
Generally, the LEDA is looking forward to a future with ReiTech because of the number of jobs in different positions it could offer the community.