Capital Safety to expand in Red Wing

Article By: Finance & Commerce   |   Brian Johnson

With subsidies from state and local sources, Bloomington-based Capital Safety is planning a 60,000-square-foot expansion of its 140,000-square-foot manufacturing plant at 3833 Sala Way in Red Wing.

The expansion was announced Tuesday by the Minnesota Department of Employment and Economic Development, which awarded the company $750,000 from its $24 million Job Creation Fund.

On Monday, the Red Wing City Council approved up to nine years of property tax abatement for the project, which is expected to create up to 100 jobs over five years. Goodhue County also approved a tax abatement plan.

Construction was scheduled to start in June and wrap up by Dec. 1, according to city documents.

Kevin Coplan, president of Capital Safety’s North American operations, said in a press release that the expansion and additional jobs are necessary to support continued growth at the company.

At its Red Wing plant, the company manufacturers harnesses, guardrails, netting and other safety products for construction and other industries. It also maintains space for research and development and training classes.

According to county documents, the project’s $11.75 million cost includes $3.8 million for construction, $5.75 million for machinery and equipment, $1.536 million for renovation of the existing building and $664,000 for public infrastructure upgrades.

The expansion will provide two new dock bays – for a total of six in the facility – and add new high-bay warehousing, according to the county. Safety improvements, additional parking, and expanded office and conference areas are also planned.

County documents said the project will create jobs with average wages of $16 per hour and minimum benefits of $7 per hour.

Three-fourths of the jobs are for textile sewing, light assembly, or shipping/receiving, all of which start at $12.50 an hour plus $7 an hour in benefits. Twenty-five management positions with hourly rates of $26 per hour – plus $7 an hour in benefits — are also planned.

DEED’s Job Creation Fund provides up to $1 million for qualifying businesses. To qualify, businesses must create at least 10 full-time jobs and spend at least $500,000 in private money, according to the release.

DEED has awarded $9.5 million to 14 projects so far through the fund, according to DEED spokesman Monte Hanson. In all, DEED says, the companies have promised to create 1,100 jobs and invest $163.7 million.

Peggy Rehder, a Red Wing City Council Member, said in an interview that the tax abatement is a good investment for the city.

Capital Safety has been “an excellent corporate citizen, and they have grown and consolidated and become a bigger employer, and they pay living wages,” Rehder said.

“They have been a very responsible company. We are delighted to have them. I think it’s a win-win for everyone: a win for the city; and it’s good for their business and the economy of the whole area.”

Capital Safety has operated a manufacturing plant in the city since the 1970s, though the company was under different ownership then, Rehder said.

In early 2012, New York-based Kohlberg Kravis Roberts & Co. acquired the company in a $1.12 billion deal, and later that year Capital Safety held a grand opening for its new headquarters at 7900 International Plaza in Bloomington.

The company has six production facilities, 11 sales offices, 14 warehouses and 18 training centers worldwide.

Its business has benefited from increased safety regulations around the world, as reported by Finance & Commerce in September 2012. Competitors include Maplewood-based 3M Co. and Morristown, N.J.-based Honeywell.

Capital Safety’s workers in Red Wing may have new housing options if a separate project moves forward.

CommonBond Communities is planning 40 units of workforce housing in the city, though the project is at least two years from construction, according to Randal Hemmerlin, executive director of Red Wing’s Housing and Redevelopment Authority.

A 2009 study showed a need for 135 new rental units in the city and nothing has been added since then, Hemmerlin said.

“With 100 new jobs … we want these people to be living in Red Wing,” Hemmerlin said. “We don’t want to have them commute.”

Red Wing Mayor Dan Bender said the housing development is coming at a good time.

“If we get this increased number of workers for Capital Safety, we are going to need that housing,” he said.