Put on hold by COVID-19, Kern Electronics and Lasers is now prepared to add on another 20,000 square foot space to their existing building in the Wadena Industrial Park.
Kern Electronics and Lasers President Derek Kern said the expansion was part of a plan in the making over the last few years. As the company has continued to grow and expand into overseas markets, the need to increase staffing and production was necessary.
The expansion will be a noticeable change for those coming to the site including a change to the front entrance and office expansion. A large part of this includes an increase in production space.
Kern said the need for more space also comes as the products they assemble, namely large laser cutting machines, are getting bigger for their ever expanding corporate clients. They continue to serve their smaller one-man shops all the way up to the larger corporate businesses.
“We’ve seen an increase in sales over the past few years, so just preparing for the next growth for the company,” Derek Kern said. “We’ve started selling more in Europe, overseas, so just ramping up production and making sure we have enough room to build the machines, and the machines are also getting larger in size. So we just need more room to work on them and build them and get them shipped out.”
More space can also mean more employees coming on. More office space means additional sales, technicians and accounting employees could be coming with it. The business currently employs about 35.
Across the way is Kern Technologies, which employs another 15. Aaron Kern is president of that arm of the business. Both companies are owned by the same group of people, BDBA Properties LLC.
Kern’s current space was built in 2017. A plan to expand in 2020 was put on hold with concerns surrounding the coronavirus, but as it turns out, the company did very well selling machines that kept busy making all the shields and plexiglass dividers needed to form a barrier from the virus. Keeping up with the demand has been made easier with a loyal employee base.
“We’ve been happy we haven't had any of the employee hiring shortages,” Kern said. “We’ve got a lot of good employees here that have helped us grow. Just a good pool of hard working people that want a good job here locally, so we are very fortunate.”
Kern said the changes at the site will include a new front entrance and parking lot on the north side facing County Road 100, as opposed to the current westerly facing entrance. They hope to be fully moved in by early winter.
Kern Laser Systems got its start in 1982, by Gerald Kern. The business started by supplying motion systems for the existing computerized rotary engraving machines. As the sealed CO2 lasers became commercially available, Kern incorporated its motion package with the laser, developing a complete turnkey laser cutting and engraving solution.
Related to this project, the Wadena City Council recently approved new funding as they did back in 2017. The council authorized modification of the MIF loan with BDBA Properties. BDBA Properties is a Limited Liability Corporation (LLC) created by the children of Kern Electronics and Lasers owners Gerald and Ivy Kern. Ownership of the LLC is in the hands of Brandon Kern, Derek Kern, Bethany Shaw and Aaron Kern.
In May 2017, the City issued a $250,000 MIF loan to BDBA LLC for a business expansion, taking a first mortgage on the property. Now BDBA LLC is doing another expansion with the purchase of another lot and will be financing the new expansion through MMCDC New Market Tax Credit program. That financing package is going to be $1.47 million, according to Wadena Development Authority Director Dean Uselman. They are asking the city to subordinate the remainder of the balance of about $121,000. The approved request includes a subordination of the existing loan with the city, which is approximately 50% paid. In re-negotiating the terms, BDBA LLC has agreed to a second mortgage on both the existing property and the new addition, along with the already on file personal guarantees of the four business principals.
The WDA Board reviewed this proposed change and recommended to the council to approve a subordination of the existing mortgage and a modification to include a second mortgage on the new lot and addition.