The state of Ohio is offering a $3.2 million, low-interest loan to keep Little Tikes Co. making rotational molded toys in Hudson, Ohio.
It's the latest chapter in what has been an ongoing saga of uncertainty for economic development officials and Little Tikes employees.
The Ohio Department of Development on July 27 announced the proposed loan to Little Tikes parent company MGA Entertainment Inc. of Van Nuys, Calif. The five-year loan would carry an interest rate of 3 percent.
According to state officials, the loan would support a $5.8 million expansion in Hudson that would create 66 jobs and retain the Little Tikes factory's existing 395 jobs.
MGA officials said they will not make an immediate decision on whether to stay in Hudson.
A month earlier, the state announced a 55 percent job-creation tax credit for MGA valued at $134,228 over seven years. The city also has offered an income tax grant, to return to Little Tikes a portion of the taxes paid by new employees at the rotomolding plant.
Other financial incentives include a workforce development grant and a one-time grant of $300,000.
Chuck Wiedie, Hudson's economic development director, said he is “cautiously optimistic that this will be enough” to ensure that Little Tikes stays in Hudson. He said the complete financial package came after more than three years of talks with MGA and Tikes.
“Keeping Little Tikes in Hudson is critically important,” Wiedie said.
But Little Tikes' future in its home town remains unclear. In a statement, Little Tikes General Manager Tom Richmond acknowledged Ohio's $3.2 million loan offer “did add another piece to the puzzle.”
“The next step is that the state [controlling board] will meet in mid-September and they are the ones who release the funds. Once all of that is complete, we'll be in a position to take the entire proposal before executive management of our company to make a decision,” Richmond said.
Wiedie said the board next meets Sept. 14.
Little Tikes was founded in 1970 in Hudson. MGA, a Van Nuys, Calif.-based toy maker best known for its Bratz dolls, bought Little Tikes in 2006 from Newell Rubbermaid Inc. of Atlanta.
Isaac Larian, MGA's founder and CEO, asked for government aid to keep Little Tikes in Hudson even as MGA officials said manufacturing could be moved to another state, or to Mexico.
Also clouding the picture: controversy over the legal war between MGA's Bratz and the Barbie doll from Mattel Inc.
Mattel sued MGA, charging that Bratz were designed by a former Mattel employee who secretly shared the idea with MGA. Larian's company introduced Bratz in 2001.
In April, the judge in the case upheld a jury verdict against MGA for $100 million and lifted a stay on his previous ruling that barred MGA from making Bratz dolls. Retailers will be able to keep Bratz dolls on store shelves through 2009.
The judge has said that Bratz is the property of Mattel.
Barbie has beaten Bratz — although MGA has filed a last-ditch motion to stop the decision pending an appeal.
Now MGA is coming out with a new doll line called Moxie Girlz. Ranging in price from $10.99 to $29.99, Moxie Girlz rolled out nationwide Aug. 15.
According to Plastics News data, Little Tikes is the ninth-largest rotational molder in North America, with estimated rotomolding-related sales of $65 million.
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