The Toledo-Lucas County Port Authority Thursday took the first step toward an $8.5 million bond issue that would allow Brush Wellman Inc. to pay off a state loan for part of its beryllium manufacturing complex in Elmore and add equipment to the plant.
The bond-inducement resolution that the port's board of directors approved is a public acknowledgement that the agency and the firm may participate in a financing package, but negotiation of terms continues. A bond-issuance resolution is the second legislative step in the process.
Brush Wellman, a unit of Brush Engineered Materials of Mayfield Heights, Ohio, sought the bonds from the port authority's Northwest Ohio Bond Fund. The authority then arranged with the Dayton-Montgomery County Port Authority to provide $2 million of the bonds and intends to issue the rest.
Port Authority President Paul Toth said the deal reduces his agency's risk while helping the Dayton agency obtain a bond rating from Standard & Poor's after the Fitch ratings service dropped its ratings of Ohio port authority bonds last year. The Toledo port authority received an investment-grade rating from S&P before Fitch withdrew, but Dayton's bond program has too few issues to qualify, he said.
The bond request involves a $15 million plant Brush built 10 years ago using port authority financing and a $1.5 million Ohio Department of Development loan, Carla Firestone Nowak, the port authority's spokesman, said. The bonds would, in part, allow Brush to pay off that loan and take title to the building.
The rest is to pay for equipment the firm needs to expand its operations, she said.
Under questioning from port directors Jerry Chabler and William Carroll, Mr. Toth assured the board that the bond issue's terms will indemnify the bond fund against environmental or health claims tied to beryllium processing.
A Blade investigative series published in 1999 revealed that at least 127 Brush Wellman workers, including 50 at the Elmore plant, had contracted berylliosis, a respiratory disease from inhaling beryllium dust. It is disabling and sometimes fatal. The next year, Brush Wellman shut down its beryllium processing operations in Elmore after the federal government canceled a supply contract and the firm said its metal-refining equipment was obsolete. It continued to produce beryllium products using previously refined beryllium, which is desirable for its strength and light weight.
But in 2006, the firm sought port authority financing to build a new processing plant after beryllium demand rebounded. The port board sought more information about its potential liability, and Brush turned to the Cleveland-Cuyahoga County Port Authority's bond fund as an alternative funding source.
During Thursday's session, Mr. Toth gave out a chart showing Brush Wellman has just two outstanding berylliosis claims.
The board also approved an inducement resolution for $5.5 million in bonds to help finance the Dayton Regional STEM School in another cooperative effort with the Dayton port authority. The Science, Technology, Engineering, and Mathematics School is one of 10 such public schools planned in Ohio, including Toledo.
Contact David Patch at: firstname.lastname@example.org or 419-724-6094.
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