MMCDC has high hopes for (stackable) baked chips
The Midwest Minnesota Community Development Corp. has accomplished a lot of things in the last few years -- renovating the Graystone Hotel block, putting its financial muscle behind the DL community center, dispersing more than $100 million in federal tax credits.
So who would have thought that the largest investment ever made by the MMCDC would come in the form of a baked potato chip?
And not just any chip -- the first baked potato chip that can be stacked, Pringles-style, in a canister.
That saves a bundle in shipping costs, and opens possibilities not available with conventional bagged chips, says MMCDC President Arlen Kangas.
You see, baked chips are one of the fastest-growing segments of the snack food market, and until now it has not been possible to make a baked potato chip that stacks.
That's why the heart of the $8.5 million gamble by the MMCDC is new technology developed by inventor Steve Twitty in Thailand and his partner, John Smart of Grand Forks.
It combines technology used in the baking industry with technology used and perfected in the production of salty snack foods.
Once it's up and operating in August, the plant in the Mahnomen Industrial Park will use 90-foot-long, 280-foot-wide ovens to bake 16 lanes of chips at a time --producing 27 million canisters of baked chips per year.
The point of the project is to create jobs -- 57 of them, eventually, over three years -- but the project also involves construction of a 29,500-square-foot steel building. It will be the first in the Mahnomen Industrial Park.
The city donated the 5.4-acre site, and approved a tax increment financing district for it.
Mahnomen Baked Chips, LLC (a for-profit subsidiary of MMCDC) "will likely sell wholesale to someone else, who will market them," Kangas said. "We're not sure if we will do our own brand or be an offshoot of an existing brand."
The project draws on funding from a variety of sources, including federal New Markets Tax Credits -- but not from the MMCDC, which also has a big allotment of tax credits to disperse.
The project involves tax credits from the Local Initiative Support Corp. of New York.
U.S. Bank Community Development Corp., of St. Louis, is also involved, as is debt capital from Minnesota's Community Development Corp.
The MMCDC is kicking in $1.7 million in equity, and Smart and Co. of Grand Forks is also contributing equity.
Another key player is the U.S. Department of Health and Human Services, Office of Community Service, which came through with $526,000 in working capital.
Groundbreaking was held Oct. 18 and the building is expected to be finished in April. Equipment design and fabrication started in August and is also expected to be done in April. Equipment installation and testing is scheduled for May through July, with start-up in August.