Editor’s note: This story needs clarification. West Hill Development and West Hill Investment Group owns, secured financing for and constructed the shell building. The group has also led in the development of the tech park with support from the city of Warsaw. InkFreeNews regrets the oversight.
By Dan Spalding
WARSAW – City officials did not have to look far for the occupant of its newest shell building in the expanding Technology Park along US 30.
Nextremity Solutions, which had been outsourcing its production of various licensed orthopedic products for years and headquartered in downtown Warsaw with non-descript offices, will centralize its operations and move into a new facility in the tech park in a phased-in approach beginning this summer.
The announcement came at two city meetings Monday, May 18.
The deal will eventually result in 42 new jobs in the next few years and will add an estimated $8 million in taxable property to the city tax rolls after the company settles into its home at the corner of Silveus Crossing and Polk Drive just east of Banner Medical’s facility, according to City Plan Director Jeremy Skinner.
The shell building is still under construction, but company officials said they want to start using part of the building for manufacturing sometime this year.
Shell buildings are a strategy used by developers and municipalities to attract new industry to specific sites. This marks the second shell building marketed and supported financially by the city.
The city’s first such shell building in the park is occupied by Patrick Industries, but it took more than two years to fill, according to Skinner.
The arrangement with Nextremity was sought by city officials and Kosciusko County Economic Development Corporation (KEDCo).
Details about the state’s incentive package are expected to be released Tuesday.
A memo of understanding, which gets the ball rolling, was approved unanimously by the city redevelopment commission and city council in separate meetings held Monday.
George Clemens, a member of the redevelopment commission, is a stockholder in Nextremity and abstained from voting.
The plan includes significant incentives from the city and the state.
Warsaw plans to cover the cost of $250,000 in machinery and provide another $250,000 in the form of a forgivable loan. If Nextremity meets its stated goals involving jobs, it will not have to repay the loan.
The loan has not been finalized. It will be paid out in five increments over a five year period.
“It was too good of an opportunity and too great of an investment in our community for us to pass up,” said Dan Stichter, chief financial officer for Nextremity, at the redevelopment commission Monday afternoon.
“We do intend to consolidate both the manufacturing operation and our primary business – product development – in this tech park space.”
The company expects to double in size in terms of employees and sales in the next five years, Stichter said.
The shell building is about 52,000 square feet, but will be further expanded by the time construction is complete.
“This is a great foundation for our company,” Stichter added.
Nextremity acquired Lakeland Technology, Warsaw, in March 2020 as the manufacturing arm of its operations. That move sped up desires to expand.
The transition to the tech park also clearly represents a major milestone for the company.
Rod Mayer, Nextremity’s president and CEO, began working in orthopedics in 1977 when he was hired by DePuy.
Nextremity was founded by two surgeons in 2007 in New York City. Mayer joined the company in 2013 and moved the corporate headquarters to Warsaw.
The company has more than 130 patents. In 2016, it announced an exclusive distribution agreement that allowed Zimmer Biomet to expand its footprint in the foot and ankle portfolio.
The announcement also comes as the city seeks to have the park re-certified by the state, which opens the door for the city to continue collecting a certain share of state employment taxes that can then be reinvested by the city into the park for more development.
“With Nextremity’s expansion plans this year and their decision to go into manufacturing, this just creates the perfect tenant for the tech park that we had in mind,” said Mayor Joe Thallemer.
“I’m really excited about the fact we’ve got a homegrown company that is willing to take the risk, invest in the community, provide jobs for families and be a part of our continued orthopedic story,” Thallemer said.
Numerous city council members applauded the move.
Councilman Michael Klondaris pointed out the city’s financial commitment does not rely on property tax dollars. Instead, it will come from economic development income tax and money from its tax increment finance money.
“How many other communities wish they were in our situation? Here we are in a pandemic and we had the foresight, cooperation and willingness … It’s amazing how fortunate we are,” Klondaris said.