Investment pays dividends as NorStar gets a lift
When NorStar Products International, Inc., of Duluth received a purchase order from one of its best customers for a significantly larger version of its articulating, extendable lift product, NorStar needed a partner to assist with the capital that would be required to develop the product.

The customer, Western Area Power Administration (WAPA), needed a vehicle that would transport its personnel and heavy material to heights in excess of 100 feet. Working in the rural areas of Colorado and New Mexico, WAPA wanted the vehicle to get to off-road areas while carrying the necessary equipment to perform tasks on electrical power transmission lines carrying up to 500,000 volts. It was desirable that the vehicle also be legal to operate on public roadways without any special use permits. Such a lift truck wasn’t being offered anywhere in the world.

Since 1995 NorStar has manufactured, sold and serviced its popular AE line of vehicle-mounted aerial platforms to electric utilities, construction companies and government entities. The company markets the “cherry picker” lift trucks worldwide.

In addition to wanting to satisfy a good customer with its new purchase order, NorStar also strongly felt that the expansion of its product line would increase overall sales significantly. It also realized that such a project could not be undertaken without a significant investment in design, manufacturing and testing.

NorStar found a willing financial partner in its landlord — the Duluth Seaway Port Authority.

Gerald DeMeo, president and CEO of NorStar Products International Inc. (left), turns over what all hope will be the first of many royalty checks to Andy McDonough, Port business developer, while NorStar Chief Engineer Gary Werkhoven and Chief Financial Officer Kelly Herstad look on.

We saw this project as a perfect opportunity to assist a small local company while at the same time enabling the Port Authority to make an investment in a sound business venture. We had worked with NorStar’s owners long enough to have confidence in their ability to execute a plan and bring a quality product to market.

The Authority provided the funds on condition that the company would extend its lease at an increased rate. In addition, the funds were secured by a loan forgiven monthly with the increased lease payment. Further, the Authority was to receive a royalty payment on each of the new units sold and a smaller payment on each existing model sold that used the resultant new technology.

Now that investment is paying off for both parties. The first of the new AE115s was delivered to WAPA in early March, and the first royalty check was delivered to the Port Authority Board of Commissioners at its annual meeting on March 31.

“In addition to securing our niche in the marketplace with this new product,” said Gerald DeMeo, company president and chief executive officer, “NorStar was also able to acquire state of the art engineering software so we can more rapidly respond to the needs of our customers.

“As a custom manufacturer, this has been especially important in securing the future of our company. Moreover, when we started this project there were 45 of us on the payroll. Today that number is 55 — directly due to the expansion in our product offering.”

Mr. DeMeo anticipates that before the end of this calendar year, new AE115s will also be shipped to American Electric Power in Ohio, South Texas Electric Co-op and Tri-State Generation and Transmission Company in Colorado.

Development note:
Fifty-six companies that provide about 840 family-wage jobs now operate on Port Authority properties.