Millions in incentives attracts Canada firm to Arkansas town

CONWAY -- State and local monetary incentives totaling millions of dollars helped persuade Canadian-based company DBG to open its U.S. headquarters and operations in Conway.

DBG announced Wednesday that it has acquired IC Corp.'s plant on Dave Ward Drive. Until now, the plant has been the home of Navistar subsidiary IC Corp., formerly Ward Transportation Services, and has made school-bus parts.

The 41-year-old DBG, with more than 650 employees, previously had operations only in Canada and Mexico. The company supplies the heavy truck, automotive, agricultural and commercial industries with custom metal parts.

The 200 employees already at the Conway plant will join the DBG payroll, and the plant will continue to provide parts to Illinois-based Navistar.

"Conway's almost 100-year history with the bus and heavy truck market is as old as modern manufacturing itself," Conway Mayor Bart Castleberry said in a news release. "The fact that a growing company like DBG recognizes and invests in our manufacturing future is an honor."

The company offered no specific numbers on employment goals and did not respond to emailed questions by Wednesday evening.

But Peter Chapman, a former IC Corp employee who lives in Conway and is general manager of DBG Conway, said in the news release that DBG "has aggressive plans to double its business over the next [five] years."

"This will require substantial investment in facilities and equipment while in turn creating significant employment opportunities that are less reliant on the seasonality of the bus market," Chapman said.

Brad Lacy, chief executive officer of the Conway Area Chamber of Commerce and Conway Development Corp., said Wednesday's announcement follows a yearlong process of talks with DBG, which stands for The De Biasi Group.

DBG President and CEO Mike De Biasi said the company has looked for a place to locate its U.S. operations "for many years."

De Biasi called Conway "a growing community" that offers "a strong experienced workforce." He said the Conway plant also will help the company diversify its product offerings.

The Conway City Council earlier this week approved a resolution expressing its intention to issue up to $5.2 million in industrial revenue bonds to help DBG with the purchase, renovation and equipment of the plant.

The state incentive package includes up to $650,000 from the quick action closing fund, Arkansas Economic Development Commission spokesman Jeff Moore said Wednesday.

Commission spokesman Lisa Cogbill said those funds must be used for permanent improvements of the facility.

"The company will be required to submit support documentation after the improvements are made before [it] can be reimbursed," Cogbill said in an email.

DBG also has qualified for two years of what the state calls "create rebate" benefits, Moore said.

"In order to qualify, the company must create a minimum of $2 million annually in new payroll," Moore said in an email. "The minimum payroll must be met within 24 months of the effective date of the financial incentive agreement. No benefits may be claimed until the $2 million annual payroll threshold is met."

The benefits are available after verification that the business has met minimum payroll requirements. The percentage of the benefits in this case will be 3.9 percent of new payroll, Moore said. The 200 employees already at the facility will count toward the minimum $2 million payroll, Cogbill said.

The city's incentive is aimed at reducing DBG's property taxes and will not cost the city any money, said Little Rock attorney Gordon Wilbourn, who advises Conway on bond-related matters.

Wilborn has said that for property taxes to be abated under Arkansas law, the property must be owned by a government entity. In cases such as this one, he said, the property gets transferred to the city and is then leased back to the business. At the end of the bond term, 20 years for example, the company buys the property back for a nominal amount such as $100, he said.

"Advanced manufacturing jobs play an integral part in our state's economy," said Mike Preston, executive director of the Arkansas Economic Development Commission. "I applaud DBG's decision to invest in Conway and keep 200 valuable employees working here as the company explores additional growth opportunities."

Lacy said DBG "has been recognized as one of Canada's best managed private companies and one of the best to work for."

"Our team has seen firsthand how thoughtful and growth-oriented they are," he added.

A Section on 08/03/2017

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