The Wyoming Business Council has recommended that the state lend some $9.86 million to help expand Cody Laboratories — though that’s less than a third of the $33.75 million that the company requested.
Speaking at the Business Council’s Sept. 8 meeting, Cody Labs President Bernhard Opitz suggested the pharmaceutical manufacturer might not be able to go forward with its plans in Wyoming unless the state can offer a bigger loan.
Cody Labs is proposing to build up its manufacturing operations on Road 2AB at Cody’s northern edge. The $45 million plan would involve installing one new production line alongside the warehouse that opened just last year. Adding that line would more than double Cody Labs’ production from approximately 5 metric tons to 11 metric tons and would ultimately create 39 new jobs, according to Business Council documents.
Opitz asked the Business Council to approve Cody Labs’ full $33.75 million request, saying that’s “really the element that we need to make a very, very strong impact on our parent company to finally approve the project.”
He noted Cody Labs is owned by Lannett Corporation, a Philadelphia-based company that operates in multiple states — and could move into others — that are all willing to offer assistance.
“I’m really, as president of Cody Laboratories, fighting to have this expansion happening in Wyoming,” Opitz said. “The limited funding that you showed right now makes me concerned if that’s enough to convince our (Lannett’s) board.”
The $9,865,000 figure endorsed by the council had been suggested by staff. The staffers based their recommendations on the project’s expected impact on the property tax base over a three-year period; in the case of Cody Labs, the Business Council staff projected the expansion would lead to a nearly $9.87 million increase in the assessed valuation.
Two other applicants were also recommended for loans at last week’s meeting and also weren’t recommended for as much money as they’d wanted:
• Standard Alcohol is proposing to build a $76 million facility south of Cheyenne that would manufacture a fuel additive using a mixture of natural gas and carbon dioxide (CO2).
Standard Alcohol asked for a $25 million loan and was recommended for $17.44 million. Robert Mulverhill, the executive chairman of the Denver-based company, said the project could move forward with that reduced amount.
• Atlas Carbon requested $25 million to help fund a $36.5 million project to develop and expand an activated carbon production plant in the Gillette area. Atlas was recommended for a $6.53 million loan. CEO Frank Levy said he wasn’t sure if the company could complete its project with that amount of money.
At the outset of the discussion about the Economic Development Large Project Program loans, Business Council member Kelly Lockhart of Jackson said the council was very fortunate to have received three quality applications.
“(It) shows that this program is in demand, that we can help some great businesses here,” Lockhart said.
Ultimately, the board chose not to deviate from staff’s recommendations, though, “We all wish we had more funds and that we could complete your requests,” Lockhart said.
The Wyoming Legislature set up the large project loan program in 2014 with $25 million and refined the criteria earlier this year. The effort was spearheaded by state Sen. Hank Coe, R-Cody, who sponsored the legislation with Cody Labs’ expansion specifically in mind.
Cody Labs officials quickly expressed interest in the program in 2014, but no one actually applied for funding until recently.
Standard Alcohol and Atlas Carbon applied earlier this summer, while Cody Labs submitted an application at the very end of August, economic development finance manager Josh Keefe said during the meeting.
Noting that investing such large amounts of money is a big decision, Opitz said the creation of the large loan program allowed Lannett Company “really to think of Wyoming as the place” to expand.
“This expansion project is the real anchor to make us a Wyoming company and be here for the long run. This is extremely critical for us,” Opitz said.
He noted that Cody Labs is already in the final stages of completing a $13.8 million pilot production line at its facility on Yellowstone Avenue; it currently employs around 126 people with a $12.5 million payroll.
The Wyoming State Loan and Investment Board — made up of the state’s five elected officials — will consider the Business Council’s loan recommendations on Oct. 6.