City of Babbitt to purchase Kasson assets

by Nick Wognum

The City of Babbitt will again enter into an agreement to purchase the assets of a troubled company. <BR><BR>This time it’s Kasson Manufacturing, the pool table company that has been struggling financially for the past six months. <BR><BR>The Babbitt city council met Friday morning and approved a plan along the lines of a previous deal.<BR><BR>Babbitt bought the former Tirecyle rubber plant and sold it to BIRCO through a non-recourse loan from the Iron Range Resources and Rehabilitation Board. <BR><BR>Mayor Don Negley said this would be a similar situation with the city acting as “a conduit.” <BR><BR>Council action included appointing Negley and council member Dick Niss to negotiate with the company’s creditors, including the U.S. Department of Agriculture, the Northland Foundation and Minnesota Power. <BR><BR>The city will also have to work with U.S. Bank, which owns the inventory at the plant. <BR><BR>Right now the company’s future is in an extreme state of flux. <BR><BR>The city’s motion approved a non-recourse loan but did not specify any amounts or who the loan would be paid back by. There is also the possibility that the plant could close.<BR><BR>“There are three entities interested in purchasing the assets of the company and one of them could continue to operate without an interruption,” said Negley. <BR><BR>If a deal can be reached with USDA the city would have 80 percent ownership. Northland Foundation and Minnesota Power each have a 10 percent interest.<BR><BR>The city already is involved in the deal, with money owed on a piece of curing equipment at the plant. <BR><BR>The IRRRB owns a piece of equipment at Kasson as well. <BR><BR>While Negley was hopeful a deal could be reached to keep the plant open and retain the 30-plus jobs there, the clock is ticking. <BR><BR>A sheriff’s sale last November gave the company six months to find a buyer. <BR><BR>Negley said Friday that the deadline to make a deal is May 19. If an agreement is not in place by May 20, the plant will close after 20 years of operation.