Financing pending on Shell Valley sale

COLUMBUS -- The economic downturn of the past 18 months, which resulted in a 60 percent sales decline and closure of the 38 year-old Shell Valley Companies Inc. in mid-April, may have a happy ending.

Travis Roth, 37, of Bancroft and Rich Anderson, Shell Valley owner, have signed letters of intent and final financing is pending in the sale of the replica kit car business to Roth.

“I was on my way back from Shell Valley after picking up parts and about half way back I thought ‘maybe I should buy Shell Valley,’” Roth said. “That was a few weeks ago, and we’ve been working to make it happen ever since.”

Since signing the letters of intent, Roth has hired back five of the seven remaining employees whose jobs ended in April. He plans to rename the company Shell Valley Classic Wheels.

“The economy has been bad,” Roth said, “but I feel it’s coming back upward again. I certainly hope that’s the case.”

Anderson purchased Shell Valley Companies 12 years ago and at one time employed 37 people.

When Anderson closed Shell Valley he owed a balance of $202,381 on a $500,000 economic development loan he had obtained through Platte County in 2003. Anderson had made payments, totaling $297,619 and has a rescheduling agreement with the county that sets his payments aside until July 1.

Records provided by the Platte County Assessor real show estate and improvements owned under the name of Shell Valley Companies Inc. are worth a total of $430,000.

Roth said financing is still pending on the sale, and the unpaid balance owed to the revolving loan fund remains unresolved.

“That balance due to the county fund is a red flag in the financing, and I’m not sure what the answer will be,” Roth said. “I know the bank and the lawyers are working on it, and we think they’ll find a way to make it work.”

Business Loan Specialist Jeff Christensen, of the Northeast Nebraska Economic Development District said $505,000 was granted to Platte County through the Nebraska Department of Economic Development community development block grant in 2003. He said $5,000 was granted to the county for administrative costs.

The county then loaned Anderson’s company $500,000 for use in expanding his replica car kit business. The transaction was the first loan used to establish the Platte County Economic Development Revolving Loan Fund.

The idea behind the county’s revolving loan fund is that as loan payments are received into the fund, additional loans can be made to assist other businesses with capital to fuel further economic development in the county.

The county currently receives payments from five other businesses with loans from the fund totaling $356,000. Funding for these loans has been made available over the past four years.

Christensen said the original terms required Anderson to pay back the loan over 84 months at $5,952.38 per month and maintain 37 jobs for the 34 months following the loan closing. Anderson made his payments and maintained the employment numbers as required, meeting the original conditions of the grant and avoiding the need to repay the entire amount.

Christensen said Anderson’s collateral included a promissory note, deed of trust on the business real estate, and personal guarantees. The county’s loan is subordinate to BankFirst of Columbus and the Small Business Administration, Christensen said.

Roth said he will continue to operate Roth Racing Performance in Norfolk. Roth Racing Performance sells high performance cars and parts. After deciding to purchase Anderson’s business he sold another venture, Ideal Wheels, a used auto, repair and collision center located in Bancroft to a former employee.

“I really can’t believe how nice the Shell Valley employees have all been through this,” Roth said. “I know they’re happy to have their jobs again, and I’m certainly happy to have them working for me.”

Roth said he, his wife Deanna and their three children will move to Columbus as soon as they are able to purchase a home.