By Howard Greninger, The Tribune-Star
TERRE HAUTE - Lenex Steel Corp. has acquired the former Interstate Welding & Fabrication building and is investing $3.5 million in equipment and building improvements, the company announced Wednesday.
The Indianapolis-based company in July closed on the purchase of a 100,000-square-foot building at 2325 S. Sixth St., said Lenex President Mike Berghoff. It is one of two buildings that belonged to the former Interstate Welding & Fabrication Co.
Interstate Welding filed for bankruptcy last year and began laying off workers in November, telling the Indiana Department of Workforce Development that 140 employees eventually would lose their jobs.
As part of an incentive package, Lenex Steel will receive $50,000 from the city of Terre Haute from the city's portion of the County Economic Development Income Tax, said Steve Witt, president of the Terre Haute Economic Development Corp.
"There are some minor contamination issues with the soil in the area where there was an above-ground petroleum tank," Witt said. "The soil must be removed and replaced."
The company also will seek 10-year real property and 10-year personal property tax abatements from the city, Witt said.
The Indiana Economic Development Corp. will offer up to $45,000 in training grants and about $305,000 in tax credits based on job creation and capital investments.
"I think it is a good project," Witt said. "It is not often that we have the opportunity to reuse older industrial buildings. This is a demonstration that it can be done."
Mayor Kevin Burke said he thinks "these incentives that have been offered have already proven to be very successful and we look forward to Lenex Steel finding out that Terre Haute is a great place to do business.
"I am fond of small businesses, which is the No. 1 employer in the United States," Burke said, adding Lenex Steel adds to the small-business base in Terre Haute.
Lenex Steel began operations in July with about 30 workers and already employs 50, Berghoff said. The company plans to have 60 employees by 2008.
"The facility in Terre Haute is the largest fabrication facility in the state. It accounts for three-quarters of our production capacity," Berghoff said.
"The previous owners had built a very efficient and well-organized shop and employed some very talented people, which we were able to benefit from," Berghoff said. "The people are one of the reasons why we bought the building and equipment because we knew it would come with these well-trained and hard-working hourly folks."
The Terre Haute facility already has been making steel fabrication for CertainTeed Corp.'s new plant in the Vigo County Industrial Park. CertainTeed is building a 370,000-square-foot plant to produce fiber cement siding.
"We were also awarded to furnish and install the steel for Riley Children's Hospital in Indianapolis, which is building a new nine-story, 600,000-square-foot hospital on the grounds of IUPUI. We got that contract in part because of the Terre Haute facility," Berghoff said.
"We also have a real keen interest in the Union Hospital expansion that may happen next summer," Berghoff said. "The [Terre Haute] plant really positions us well to compete for that job."
Lenex Steel receives structural steel from a mill, Berghoff said. That steel comes in different lengths and sizes. The facility in Terre Haute cuts the steel to length, drills and punches holes, and shop fabricators weld components to the steel "to allow it to be erected in the field. In a lot of ways it is metal manufacturing and processing. It is welding and cutting equipment, overhead cranes and material handling systems."
Lenex Steel was founded in November 2002 by Berghoff to provide fabricated steel products and engineering design services for the construction industry. The company maintains its headquarters and two fabrication shops in Indianapolis. The company will continue to serve its eastern Indiana and Ohio clientele from its Indianapolis facilities.
Two other recent projects that used Lenex Steel's products and services include the Metropolis Mall in Plainfield and the new Simon Headquarters building in downtown Indianapolis.