Nevada’s Mid-States Material Handling and Fabrication plans 13,000-foot expansion with USDA loan

Several state organizations have collaborated to provide a significant loan for a rural Story County company.

USDA Rural Development recently awarded Colo Telephone Company a $2 million pass-thru loan to help fund a 13,000-square-foot expansion at Mid-States Material Handling and Fabrication in Nevada. 

The Iowa Area Development Group wrote the application with help from the Ames Chamber of Commerce.

The loan was received on behalf of the USDA’s Rural Economic Development Loan program, allowing Mid-States to access a 0% loan. Though Mid-States is about nine miles from Ames, Mid-States Senior Vice President Randy Vier said it is still considered a rural development.

“(Mid-States) has customers nationwide,” Vier said. “The loan gives us that much more capabilities of serving our clientele, not just in Story County but across the state and the entire nation.”

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What services does Mid-States provide?

Mid-States Companies has been based in Nevada since its first company opened in 2001. In addition to material handling and fabrication, Mid-States companies include Mid-States Millwrights and Builders, as well as Mid-States Crane and Trucking.

Mid-States offers millwright, design, crane and trucking services. Its fabrication company distributes structural steel products and material handling equipment.

Mid-States will add 13,000 square feet onto their existing 1280 S. B Avenue facility. They also have money appropriated for new manufacturing equipment. The expansion will allow the Story County company to hire nine additional employees in the next two years, folding them into their workforce of 85.

Vier said Mid-States started the expansion last fall and hopes to finish it by December 2024.

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A helping hand for local business

The $2 million loan is the maximum any one company can receive from the USDA, according to Vice President of Community Initiatives at IADG Ethan Pitt, who wrote the application on behalf of Colo Telephone and Mid-States.

The USDA doesn’t often distribute such significant loans.

“The program maximum fluctuates. It happens to be $2 million now, but a lot of those loans are less than that,” Pitt said. “Getting a $2 million loan is pretty substantial. “

For companies like Mid-States to qualify, a rural utility must step up and allow the loan to “pass through” their company. So, the $2 million loan will pass from the USDA to Colo Telephone to Mid-States.

“That money is only available if you have a rural utility provider like Colo Telephone who is willing to basically raise their hand and say, ‘We will be their conduit; we will be the pass-thru entity for the REDL,” Pitt said. “Without that local partner, the USDA can’t deploy the funds.”

John Ferrell, the Director of Business Programs at USDA Rural Development, enjoys administering their loan program because he works with diverse projects across the state. He believes that what sets the program apart is that it involves a collaborative effort rather than just a one-on-one relationship with the borrower.

“We work through our partners − our rural electric co-operatives and our telephone associations, they are the actual applicant on behalf of the borrower,” Ferrell said. “Collaboratively, they all work together with the borrower to identify the project and figure out what their needs are, and then they all come together to put together a design plan and they submit an application to us.”

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Organizations team up to boost projects

IADG, who helped write the loan application, is an economic development partner for rural utility providers across the state. The nonprofit has about 112 independent broadband utility providers as well as more than 20 rural electric co-operatives and rural municipal electrics it works with.

“Our organization helps them with any economic development project they’re interested in assisting with,” Pitt said. “Sometimes that’s helping with community projects, helping with business park or industrial sites, helping local businesses expand or recruiting local businesses. Anything under the umbrella of economic development that our utility partners are interested in, we’re there to help.”

Colo Telephone provides a fiber network for residents in rural Nevada, and Mid-States is a mainstay in the community, boasting more than 20 years of business.

“Mid-States is a customer, and we would like to support anything that is local when we see their growth in the community is going to be a benefit for everybody,” Shane Bellon, general manager at Colo Telephone, said. “With the help of the USDA and IADG, we were able to help them get the loan.”

Colo Telephone will be responsible for the loan until it’s paid off by Mid-States.

“It’s to their credit,” Pitt said. “There’s some sacrifice there.”

Pitt was complimentary of everyone involved and how the “web partners” came together.

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USDA loan program stands out nationally

Mid-States’ $2 million loan was closed in September of 2023 after a six-month application process, just one piece of the USDA’s record-breaking year.

The USDA in Iowa typically funds 20-25 projects yearly. However, in 2023, they supported a record 39 projects and awarded more than double the usual funding, Ferrell said. The federal department funded daycares, hospitals, schools and manufacturers.

Ferrell said Iowa taps into the program at a much higher rate than others do.

“It is due to our rural electric co-operatives and telephone associations in Iowa really taking an interest in their rural communities and trying to be proactive and initiate projects,” Ferrell said. “That has been what has made this program truly successful in Iowa.”

Celia Brocker is a government, crime, political and education reporter for the Ames Tribune. She can be reached at CBrocker@gannett.com.