It's official, and it's good news for the local economy.

Sofamor Danek, the orthopedic firm with operations in Winona Lake, will stay in Kosciusko County.

The Warsaw City Council approved a Memorandum of Understanding Tuesday that will enable the company to construct a new 150,000-square-foot facility on a 25-acre site at the intersection of CR 150W and U.S. 30.

The estimated cost of the new facility represents a $20.2 million investment and will result in 140 additional jobs, adding $4.273 million per year in additional payroll. The expansion brings the total number of employees to approximately 390 by the time the new facility is completed in spring 2003.

"We're just thrilled Sofamor Danek has chosen to stay with us," said Warsaw Mayor Ernie Wiggins Tuesday. "It's definitely a positive. The trickle-down effect of the County Option Income Tax, the additional property taxes, and the additional jobs - we're just tickled to have Sofamor Danek staying in the area."

Under the agreement, the city agrees to annex the property where the new facility will be built and issue economic development bonds to fund the extension of utilities and other infrastructure improvements to the site. Those bonds will have only one purchaser - Sofamor Danek.

"This allows the city to construct the necessary improvements and not use tax dollars from outside this development," said Rich Hill, attorney for the South Bend law firm Baker and Daniels. Hill drew up the MOU for the city and Danek.

The council's action clears the way for Sofamor Danek's president and CEO, Ronald Pickard, to sign off on the deal. According to William Reynolds, vice president and general manager of the Warsaw operation, that approval is expected today.

Pickard previously confirmed to the Times-Union that Sofamor Danek will phase out its manufacturing facility in France and move that operation to Warsaw. With that confirmation, Pickard's signing the MOU is considered a formality.

"We've already begun the process of closing down the French facility," Pickard said. "The architects are now working very feverishly on the plans of the new facility in Warsaw.

"We've always been very impressed with the business climate in Warsaw and the quality of life the town offers, so we are very pleased that we are staying there," he added.

Also part of the MOU is a commitment on the part of the city to help the company obtain financial assistance from the state, in the form of the Indiana Department of Commerce's Industrial Development Grant Fund, EDGE tax credits and Training 2000 grants.

According to Kevin Waltman, DOC spokesman, the department is aware of Warsaw's efforts on behalf of Sofamor Danek and is prepared to help complete the package in retaining the company in Warsaw once the agreement is signed by all parties involved.

"We're actually a couple of steps away from having this signed, sealed and delivered," Waltman said. "But this project, if we can get everyone signed on, is something we are excited about and are ready to help keep the company in Indiana and provide the additional jobs to the Warsaw area."

A formal announcement of the agreement is expected to be made Thursday at a joint news conference with company, city and state officials. [[In-content Ad]]