Colorado Springs News, Sports & Business

Mayor to talk more about manufacturer's expansion in Springs

WAYNE HEILMAN Updated: November 22, 2011 at 12:00 am

A news conference is scheduled noon Tuesday during which Colorado Springs Mayor Steve Bach and others will discuss the construction of a manufacturing plant on the city's far north side.

The Gazette will have full coverage.

The company, medical device manufacturer Bal Seal Engineering Inc., is expected to employ 250 within five years.

Read more below from our Nov. 22 story about Bal Seal and the expansion in Colorado Springs.

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The Colorado Springs City Council on Nov. 22 approved $543,000 in tax rebates as part of a $2 million incentive package to persuade a California-based medical device manufacturer to build a plant on the city’s far north side expected to employ 250 within five years.

Bal Seal Engineering Inc. already employs 39 at a plant near Garden of the Gods Road to manufacture custom-engineered, high-performance electrical contacts and seals used in pacemakers, defibrillators and other implantable medical devices as well as planetary rovers used in space and oceans.

The Foothills Ranch, Calif., company plans to build a 137,000-square-foot plant next year on 17 acres southwest of Voyager Parkway and Republic Drive, east of Interstate 25, that would begin operation in 2013.

Bal Seal plans to spend $25.4 million building the plant and another $19.5 million on manufacturing equipment and other furnishings for the facility and will add another 211 employees to its Colorado Springs payroll within five years, according to a memo sent Tuesday to council members by Mayor Steve Bach.

The jobs are expected to have an average salary of $49,725 and produce an estimated annual economic impact of $112 million, including the existing 39 jobs, according to the memo.

“Our Colorado Springs expansion is a major milestone in our transition into a global technology and manufacturing powerhouse,” Rick Dawson, Bal Seal’s President and CEO, said in a news release issued late Tuesday after council approved the incentive package. “This growth enables us to better serve our rapidly expanding markets while staying true to the engineering and entrepreneurial spirt that (Bal Seal founder Peter Balsells) imbued into the organization for more than a half century.”

The company plans a formal announcement of its plans Dec. 6 in Colorado Springs. The company likely is the unidentified medical device manufacturer The Gazette reported earlier this month after reviewing planning documents.

Bal Seal opened its Colorado Springs plant in 2006 with about 20 employees to add a second manufacturing facility to its California headquarters, and planned to build a 50,000-square-foot plant near the Colorado Springs Airport two years later.

That expansion was delayed due to the recent recession, but company officials began meeting with city staff in June while evaluating options on where to expand and city council “advised staff of its informal support” in November for the incentive agreement, according to Bach’s memo.

“I am absolutely thrilled that they are looking at moving into the north end. It’s a fabulous area, growing, and I look forward to helping them through the process,” said City Councilwoman Angela Dougan.

The city has agreed to rebate $305,000 in sales and use taxes on building materials, $195,000 on sales and use taxes on business personal property and $43,000 in business personal property taxes. The El Paso County Commissioners will consider an incentive package Dec. 1 that includes $152,500 in rebates of sales and use taxes on building materials. State officials also have approved $1.14 million in state income tax credits and $182,000 in job training funds and is eligible for other local job training programs.

The city’s $543,000 in rebates are expected to net $1.54 million in tax and other revenues, or a nearly 3-to-1 payback, according to Bach’s memo.

“Bal Seal Engineering is an excellent example of American ingenuity and we are pleased with today’s announcement,” Gov. John Hickenlooper said in the company’s news release. “Bal Seal’s expansion in Colorado Springs will create jobs and continue the momentum our state has an innovative place where businesses can thrive. We look forward to supporting Bal Seal as it continues to produce key engineering solutions for Fortune 500 companies with proprietary solutions made only in the U.S.”

Bal Seal wanted to expand to a location within three hours travel of its southern California headquarters with “a large, educated labor pool for engineers and designers,” Dawson said. The company and an outside site selection consultant have been working with the Colorado Springs Regional Economic Development Corp. for nearly a year on the project and also considered Phoenix and Salt Lake City before selecting Colorado Springs, he said.

“We asked for the best (incentive) package you were able to offer. That was not the only consideration, however. We felt the combination of the package you offered, the support of the company and synergies with the area would bring us the right employees, skill sets and property to work together to grow our business,” he said.

Much of Bal Seal’s growth comes from new customers, Dawson said.

“We are actually seeing 10-15 percent growth per year and expect to double our sales in the next five years. We have a number of automotive and medical customers coming on line that are fueling our growth. Despite the current economic conditions, with our growth and technology we believe it is a good time to expand the business,” he said.

Bal Seal was started in 1958 by Balsells, a young inventor and immigrant from Catalonia, Spain, and his American-born wife, Joan, and now generates $75 million in annual sales. Peter Balsells, now in his 80s, remains actively involved in the company as its owner and chairman.

The company, which holds more than 120 U.S. and foreign patents, employs 450 at its 125,000-square-foot headquarters and also has offices in Hong Kong, Tokyo, Amsterdam and Prague in the Czech Republic.

Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

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