Inside the Columbus inducement agreement for this company’s $13 million expansion

On May 14, the Ledger-Enquirer reported Heckler & Koch, a German firearms manufacturer operating locally as HK USA, will expand its Columbus facility with a $13 million investment.

We obtained the inducement agreement documents signed between the Development Authority of Columbus and Heckler & Koch.

Here is an inside look at the deal that promises to bring 38 new jobs to the Chattahoochee Valley.

What do these documents mean?

The inducement agreement is commonly signed when two parties formalize plans for a major economic development project. This document outlines the incentives offered, approvals granted and commitments each side is making.

The inducement was signed by Development Authority chairman Selvin Hollingsworth, Greater Columbus Chamber of Commerce board member Geniece Granville and an unnamed representative from Heckler and Koch.

What does HK USA get out of this deal?

According to the document, the Development Authority agreed to issue bonds (loans) at a lower interest rate to finance the HK USA project. The Development Authority has issued $13.8 million in bonds.

The company is proposing to renovate its existing facilities and build additional facilities at 5175 Cargo Drive.

The bonds being offered are industrial revenue bonds (IRBs), which are typically issued by a government entity to help provide capital to private businesses to stimulate economic development. Individual taxpayers are not responsible for the repayment of these bonds.

In return, HK USA will create 38 jobs and maintain 105 full-time positions by Dec. 31, 2029, according to the agreement.

HK USA can terminate the agreement at any time if it provides a written notice and reimburses the Development Authority for any costs incurred.