City of Babbitt to purchase Kasson assets

The City of Babbitt will again enter into an agreement to purchase the assets of a troubled company. This time it’s Kasson Manufacturing, the pool table company that has been struggling financially for the past six months. The Babbitt city council met Friday morning and approved a plan along the lines of a previous deal.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. Mayor Don Negley said this would be a similar situation with the city acting as “a conduit.” 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. The city will also have to work with U.S. Bank, which owns the inventory at the plant. Right now the company’s future is in an extreme state of flux. 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.“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. 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.The city already is involved in the deal, with money owed on a piece of curing equipment at the plant. The IRRRB owns a piece of equipment at Kasson as well. 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. A sheriff’s sale last November gave the company six months to find a buyer. 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.