Loenbro Comprehensive Pipeline Solutions to Open Soon
Nelson Architects was involved in the design of their 27,000-square-foot pipe fabrication facility which will house 20 welding stations and features two overhead 10-ton cranes and 20 one-ton.
As featured in the Great Falls Tribune, January 13, 2015.
A new pipe fabrication business is scheduled to open later this month north of Black Eagle, and its chief strategy officer says it could create more than 400 jobs over the next several years.
On Tuesday, Cascade County commissioners voted 3-0 to approve a resolution to apply for a $7.5 million loan from the Montana Board of Investments on behalf of Loenbro Inc. to help with financing the plant.
Loenbro Inc. has purchased a 52-acre lot at 1900 32nd Ave. N.E. where it already has constructed a 27,000-square-foot pipe fabrication facility with 20 welding stations, two overhead 10-ton cranes and 20 one-ton jib cranes, said Lee Haven, Loenbro’s chief strategy officer.
A 3,000-square-foot support shop will be connected to the fabrication facility.
A two-story 28,000 square-foot office facility is also scheduled for completion in July.
Work is expected to begin at the fabrication facility in late January.
The facilities are located south of ADF, a metal fabricating company, and malt producer Malteurop.
Loenbro is a rapidly growing energy services construction company that cuts and bends pipe to size and prepares pipe with valves and other modifications for use in pipelines and refineries. It also does industrial construction at refineries, pipeline construction and industrial circulation.
At this time, there is room for 50 employees at the pipe fabrication facility, with the number of workers at any one time varying depending on the work flow, Haven said.
“The goal is to fill it up with projects,” Haven said.
Over four years, the company anticipates creating 450 jobs, he said.
The $7.5 million loan will allow the company to utilize cash in a way that will help the business grow, he said. The total cost of the project is proprietary, Haven said.
The county, Board of Investments and Loenbro would enter into various agreements to secure payment on the loan, said Brian Hopkins, a deputy county attorney who advises commissioners.
Loenbro would transfer ownership of the lot and infrastructure improvements to the county, then lease them back from the county.
Loenbro would pay public improvement user fees in an amount sufficient to repay the county’s loan. After the loan is paid off, the county would transfer the property to Loenbro.
A big advantage of the loan arrangement is that Loenbro can deduct from its taxes the user fees it pays to the county, said Herbert Kulow, senior portfolio manager at the Montana Board of Investments.
The Board of Investments will probably take up the county’s loan request in February, he said.
The county is just a conduit to enable Loenbro to take advantage of the tax credits, Loenbro said.
Interest rate will be about 3 percent, Kulow said.
A provision in the agreement will “indemnify” the county from ever having to repay the loan, he said.
Only businesses that receive more than 50 percent of revenue from out of state qualify for the loan, Kulow said.
Loenbro was started in 1998 by Paul and Jon Leach of Sun River, where an existing 5,000-square-foot pipe fabrication facility is located.
The company sees “tremendous opportunity” in the oil and gas business in Montana, the Dakotas, Wyoming and Colorado, Haven said. The company is not overly concerned about the drop in oil prices because it works in the “midstream” side of the business, not the front end such as oil production companies, he added.
Pipe fabrication jobs are good paying and attract young people with the company recruiting at technology colleges, Haven said.
Reach Tribune Staff Writer Karl Puckett at 406-791-1471, 1-800-438-6600 or kpuckett@greatfallstribune.com.