Schutt Sports Still Negotiating with the City of Litchfield

Schutt Sports continues to work with the city of Litchfield, IL, on ways to keep the sports equipment maker headquartered in that town.
According to a report in the Journal-News, Hillsboro, IL, one hurdle to a deal pertains to the security on a $5.3 million, ten-year loan the town would provide to Schutt for an expansion of its distribution center. The city is demanding a first lien holder position on the new addition. But Bank of America has first position on all of Schutt's current assets and any future assets that may materialize. Litchfield has so far rejected the offer of having a second position.


The other obstacle are the 301 jobs Schutt has promised to provide over the ten year term of the loan. Litchfield's economic board believes only full-time jobs should count while Schutt contends that part-time jobs should also be counted. Schutt and Litchfield have been working on an agreement for almost a year.

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Schutt Sports Still Negotiating with the City of Litchfield

Schutt Sports continues to work with the city of Litchfield, IL, on ways to keep the sports equipment maker headquartered in that town. According to a report in the The Journal-News, Hillsboro, IL, the two hurdles to a deal pertain to the security on a $5.3 million, ten-year loan the town would provide to Schutt for an expansion of its distribution center as well as the number of jobs Schutt promises to bring.

Schutt and Litchfield have been working on an agreement for almost a year.

Dean Krone, who has been working for the city on the deal, told the newspaper that it is important for the city to have a first lien holder position, at least on the new addition. The main problem is that Bank of America has first position on all of Schutt's current assets and any future assets that may materialize. Litchfield has been offered second position on all of Schutt's assets but the city's Economic Development Commission recommended not accepting that due to Bank of America's current liabilities pertaining to Schutt.

Regarding jobs, the company was to provide 301 jobs over ten years, thus paying off the loan. If more than 301 jobs were provided additional time would be taken off while if fewer than 301 were provided, the loan would take more than ten years.  The issue is that the Economic Development Commission believes that only full-time jobs should be counted into the 301 jobs, while Schutt contends that part-time jobs should also be counted.

Krone mentioned to the council that Schutt has sent a revised agreement but there are still several issues and the city staff is currently looking to the council for direction.

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Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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