PERU – The City of Peru is set to lose $200,000 on a loan to a Peru company that officials say has closed up shop.
Conforce USA, located near the intersection of U.S. 31 and U.S. 24, began operation in May 2011 and anticipated creating 175 jobs by the end of this year.
The company struggled for three years to get up and running, laying off all its employees twice and eventually never rehiring workers.
Conforce was to begin manufacturing a new product called EKO-FLOR, a composite flooring system that replaces traditional hardwood floors in semitrailers and other shipping containers.
The city enticed the company to the area with a number of tax abatements and a $500,000 forgivable loan. Each year Conforce met certain hiring and investment requirements, the city would forgive $100,000 of the loan and reapprove the tax abatements.
In its three years, Conforce never once met the abatement and loan requirements.
But the city won’t lose all the money it loaned to the company. City officials struck a deal earlier this month to get back $300,000.
City Attorney Bill Berkshire said the company has already paid back $50,000, and will give another $50,000 by the end of the year.
In addition, Conforce has agreed to pay at least $50,000 back every year until 2018.
Berkshire said the city has also put a lien on the company’s equipment inside the facility. If Conforce sells the equipment or begins to manufacture EKO-FLOR at another location, the city would then get its $300,000 back sooner.
“If we can get back $300,000 from a $500,000 loan, that’s not too bad,” he said.
Jim Tidd, executive director of the Miami County Economic Development Authority, said it’s unfortunate Conforce couldn’t survive, especially considering the company had a good idea for a product and a lot of cash to get started.