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Crenlo seeks subsidy to keep Rochester plants open

Notice of a public hearing concerning a business subsidy for Crenlo Engineered Cabs, was on the April 5 Rochester City Council meeting agenda, but the hearing was continued to April 19. It's unknown how much money Crenlo is requesting from the state and the city to remain in Rochester. Crenlo has operated in Rochester for 70 years.

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The Crenlo plant at 2501 Valleyhigh Drive NW, Monday, Oct. 26, 2020. (Ken Klotzbach / kklotzbach@postbulletin.com)

In the wake of threats by its owners to close its Rochester manufacturing operations, Crenlo Engineered Cabs now is in talks to receive financial boosts from the State of Minnesota and the city.

Crenlo sent a letter to UAW Local 215 in October stating that the labor contract for the almost 500 workers needed to be renegotiated or the 70-year-old company would be forced to close. Angeles Equity, a California-based private equity firm, which manages a $360 million venture fund, became the majority owner of Crenlo in December 2019.

That letter spurred a lot of uncertainty among the workers, who had just signed a five-year contract 10 months prior. After that initial letter, the company went silent about its plans.

Recent comments by the interim president of Rochester Economic Development Inc. and an appearance on the Rochester City Council meeting agenda signal that a plan to keep the major employer operating is in the works.

“We worked very closely with the city, DEED ( Minnesota Department of Employment and Economic Development) and others to ensure their [Crenlo’s] continued viability,” said John Wade at RAEDI’s annual meeting in March.

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A public hearing about Crenlo receiving a business subsidy appeared on the city council’s meeting agenda for its April 5 meeting.

The agenda notice stated, “The City, State, and RAEDI have been working closely with representatives of Crenlo Cab Products, LLC in response to the Company’s indication of its intent to move its business operations out of the City of Rochester to several of the Company’s other out of State locations “but for” business assistance being provided to the Company.”

The April 5 public hearing notice was just a placeholder, and the April 5 meeting was continued to the April 19 council meeting due to last-minute issues, according to Assistant City Administrator Terry Spaeth.

“We thought it was ready, and then we found out there was still a concern or a question from the company that needed to be resolved,” said Spaeth. The issue came up too late to pull the public notice of the hearing, so it was continued to the next meeting.

The unanswered questions about Crenlo’s subsidy are what form it will take and how much money is at stake. The most recent comparable situation happened last year, when a Med City cheese packager was looking to expand.

In 2020, RAEDI provided a $200,000 loan from Rochester’s Economic Development Fund to Pace Dairy to help fund a $7 million expansion. The Minnesota Job Creation Fund made a $175,000 grant available on the condition that Pace adds 20 jobs with an average wage of $24.28 an hour. Overall, Pace is eligible for up to $325,000 in state funding.

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