Norwalk Furniture bought for $2.5M

NORWALK Local officials are keeping mum on the financial details of the sale of Norwalk Furniture.
Cory Frolik
May 24, 2010

 

NORWALK

Local officials are keeping mum on the financial details of the sale of Norwalk Furniture.

But information obtained by the Register this week helped shed some light into the terms of the agreement.

The real estate of the Norwalk Furniture Corp. was sold for $2.5 million to 100 Furniture Parkway LLC, according to Huron County Auditor's records.

The transfer involved 40.20 acres of property -- the bulk of which is the 435,000-square-foot facility.

Judging from auditor's records, the deal may have been a steal. The auditor lists the property as worth about $4.64 million.

That estimate was made by an appraiser who did an industrial report on the building back in January 2006, Huron County Auditor Roland Tkach said. The value may have changed in the nearly three years since then.

The $2.5 million payment only bought the building. Buying the assets took another million, said a person familiar with the sale.

"What the bank was paid was $3.5 million," the source said.

On top of that, the investors -- all of whom are locals -- had to pay more than double that amount to fund the start-up costs, the source said. Running it will takes millions more.

This means it may be a long time before the investors make any money from the new company -- Norwalk Custom Order Furniture, the source said.

But while investors may have a delayed payoff, local workers are on track to reap benefits much sooner.

The new company recently announced what Norwalk residents have waited weeks to hear. That was the news that job applications for Norwalk Custom Order Furniture will be available from 8 a.m. to 2 p.m. Thursday and Friday at the Norwalk High School Performing Arts Center.

Job-seekers will apply on the spot.

The exact number of people the new company will hire is unclear, said Mary Geretz, receptionist for Norwalk Custom Order Furniture.

"We just don't know yet," Geretz said. "We hope that production will slowly increase as our orders do. We don't have a long-term (idea) of what we can expect, especially with the economy the way it is."

Last week, officials announced that the company would hire between 175 and 200 employees. The Ohio Department of Development estimated this week that about 260 full-time jobs would be created within three years.

The state is pitching in to help get Norwalk Custom Order Furniture on its feet.

The Ohio Tax Credit Authority is extending the company a six year, 55 percent tax credit valued at $718,900.

One stipulation of the tax credit is that the company stays at the project site for 12 years, according to the Department of Development.