By a unanimous vote, members of the Gering City Council approved a $20,000 loan to Magnolia Homes on Monday.
The funds would come from the city’s LB 840 program, which earmarks sales tax monies for economic development projects.
Magnolia Homes employs 60 full-time people, building modular houses at their plant in the Gering Industrial Park. However, with the sluggish economy and housing market, the company has struggled to remain open at full capacity. While they see opportunities in the future, especially in the oil, gas and energy sectors, those orders haven’t developed as companies take a “wait and see” position.
The LB 840 committee’s recommendation to the city council said funds would be used to build a minimum of two modular houses. The loan, which carries 1.75 percent interest, would be repaid through the sale of the houses. The funding would also keep the plant in operation at full capacity until more orders develop.
The LB 840 committee also reported they were very pleased with the entire transaction when a similar loan was extended to Magnolia Homes a few years ago and the loan was fully repaid to the city.
Western Nebraska Housing Opportunities would own the homes and repay the loan to the city on behalf of Magnolia Homes once the houses sell.