Cullman Council considering $1.5M loan to HomTex for expanded mask production

Cullman Mayor Woody Jacobs wears one of HomTex’s reusable masks at Monday’s council meeting. (W.C. Mann for The Cullman Tribune)

CULLMAN, Ala. – The Cullman City Council announced in an emergency meeting Monday afternoon that it will consider a $1.5 million loan to the city Industrial Development Board which will, in turn, be loaned to textile manufacturer HomTex for the purchase of equipment that will be used to manufacture disposable safety masks. The company has already begun making disposable masks and will continue to do so, while the new machinery will allow the company to expand its operation to include the disposable masks, and will add 80 to 120 new jobs at its Cullman facility. According to Cullman Economic Development Agency Director Dale Greer, quick processing of the loan will allow the company to make a down payment on machinery and have it up and running in 45 days.

The council issued this notice:


NOTICE IS HEREBY GIVEN, pursuant to Amendment No. 772 to the Constitution of Alabama (1901) (Section 94.01 of the Recompiled Constitution of Alabama and hereinafter referred to as “Amendment No. 772”), that at the regular public meeting of the City Council (the “City Council”) of the City of Cullman, Alabama (the “City”), scheduled to be held at 7:00 p.m. on Monday, April 13, 2020, in the Municipal Auditorium located inside Cullman City Hall at 204 2nd Avenue NE, Cullman, Alabama 35055, the City Council will consider a resolution concerning the proposed authorization, execution, and delivery, on behalf of the City, of a Loan Agreement (the “Agreement”) with The Industrial Development Board of the City of Cullman, a public corporation under the laws of the State of Alabama (the “IDB”), under which the City will loan to the IDB funds in an aggregate maximum principal amount of approximately $1,500,000.00 and bearing interest at a per annum rate of approximately 2.2%, and which the IDB will, in turn, make available to HomTex, Inc., an Alabama corporation (“HomTex”), for HomTex to use to purchase and install certain machinery and equipment at its existing facility, located at 2125 2nd Ave SW Cullman, AL 35055, necessary for the production of disposable surgical masks to be used to fight the spread of the coronavirus (COVID-19).

The public benefits sought to be achieved by the proposed authorization, execution and delivery of the Agreement are (i) promoting local economic development and stimulating the local economy; (ii) increasing employment opportunities in the City; (iii) increasing the City’s tax base, resulting in additional tax revenues for the City; (iv) promoting the development of existing business enterprises in the City; and (v) curbing the spread of the coronavirus (COVID-19), all of which inure to the economic health of the City and constitute important public benefits to the City and its citizens. For purposes of Amendment No. 772, the City proposes to lend its credit or grant public funds or things of value for the benefit of the IDB and HomTex.

The funds that the City proposes to make available to the IDB and HomTex are provided in accordance with Amendment No. 772, which authorizes the City to lend its credit to or grant public funds and things of value in aid of or to any corporation or other business entity, public or private, for the purpose of promoting the economic and industrial development of the City.

The proposal will be presented at the City Council meeting next Monday, April 13 at 7 p.m. Public attendance is limited, based on current state social distancing orders, but The Tribune will livestream the meeting.

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W.C. Mann