A South Korean firm with its U.S. headquarters in south Forsyth has asked the county commission to sponsor its application for an Employment Incentive Program loan through the state Department of Community Affairs.
IUS Technologies, which develops devices for utility companies, hopes to expand its manufacturing and distribution center at McFarland 400 Drive, said Randall Toussaint, vice president of economic development for the Cumming-Forsyth County Chamber of Commerce.
The $1 million expansion would add a research and development center for design and testing of new products, Toussaint said during the commission’s work session Tuesday.
The addition likely would generate 50 new jobs for primarily technical workers and the Georgia Department of Labor would assist in accessing veterans in need of jobs, he said.
“The challenge they have run into is that being a foreign entity that is now here in the U.S., they do not qualify for several of the common small business financing streams that would typically go through on these projects,” he said.
The Employment Incentive Program would allow the business to secure up to $500,000, and the parent company in South Korea, Vitzro Group, agreed to match any amount the DCA awarded, which would total the $1 million needed for the expansion, Toussaint said.
The program provides a low-interest loan of 3 percent over 10 years through state community development block grant funding, which requires a local government sponsor for the application.
“The loan agreement can be structured so that way the company is actually on the hook for the funding if the project does not go through, as opposed to the community that is supporting the program,” Toussaint said.
“The other unique factor about the program is that all funding that is paid back after the loan is complete will go toward the creation of a revolving loan fund that can be lent out to other companies that are seeking to do similar expansion.”
That fund could then be managed by the Forsyth County Development Authority, he said.
Commissioners expressed interest in assisting with the application, but postponed a decision until their Aug. 27 work session to ensure the county’s credit would not be in jeopardy if Forsyth were to sponsor the effort.
County Attorney Ken Jarrard said his initial understanding was that “any obligation is going to be collateralized by way of assets of the entity,” which wouldn’t affect the county’s finances.
However, Jarrard added that he will further research the legalities of the program and its potential effects.
Commissioner Jim Boff referenced a previous request for a DCA loan program backed through the U.S. Housing and Urban Development that met with opposition from the community.
But Boff said this application of the program appeared more favorable.
“I think this is a good thing to do for this particular case,” he said, “assuming that the good faith and credit of the county is not on the line.”