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SD: Custom Touch Homes Announces Expansion in Madison

17 May, 2011


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Custom Touch Homes recently announced plans to build a 48,000-square-foot addition to their Madison plant which will increase the plant’s size to 100,500 square feet. The expansion, their second in the past two years, will allow Custom Touch to double capacity and increase efficiency in production. Custom Touch has been a part of the Madison community since 1996.

Custom Touch currently has 56 full-time employees with plans for over 100 in the next few years, creating up to 50 new jobs in Madison. Custom Touch contracts with several local sub-contractors who will also hire additional workers. This may lead to an additional 15 to 20 full time employees within the community.

“Job growth in South Dakota is my top priority, and growing companies like Custom Touch Homes are the perfect means to that end,” said Gov. Dennis Daugaard. “I’m pleased that state government and the community were able to work together on an expansion project that will benefit both Madison and the state as a whole.”

“The Lake Area Improvement Corporation (LAIC) is extremely excited the Custom Touch expansion is coming together,” said Linda Salmonson, president of the LAIC. “The addition of new employment opportunities and revenues are both good for the community.”

Custom Touch will continue to build homes inside their plant, out of the weather, from start to finish. Homes are built without time delays or weathered materials due to inclement weather such as rain or snow.

“We are extremely happy to be a part of the Madison community,” said Custom Touch co-owner Jeff Larson. “The mayor and commissioners of this community are forward thinking individuals. We could not have brought this project to fruition without the hard work of both the state and city.”

A key partner in the expansion project was the state of South Dakota. Custom Touch obtained a Revolving Economic Development Initiative (REDI) Fund loan from the Governor’s Office of Economic Development to assist in the $2.6 million expansion. The state worked in association with Bank West to provide funding to the project. The low interest loan fund is available to start-up firms, businesses that are expanding or relocating, and local economic development corporations. The REDI Fund provides up to 45 percent of a project’s total cost.

In 2010, Custom Touch developed a new business model that included starting a transportation division. This allowed Custom Touch to deliver homes to their final destination rather than contracting for the service. The company also began attaching the homes to the foundation which completed the new business model of becoming a full service provider.

“As our company grows and we continue to provide improved service, it has a significant impact on the community of Madison,” said Custom Touch co-owner Scott Larson.

Beginning in January 2011, Custom Touch changed the point of delivery of its product, allowing the city of Madison and the state of South Dakota to collect newly generated sales tax, due in part to their regional approach. They are now able to capture tax for the city and state on homes delivered out of state. Custom Touch delivers homes to neighboring states including North Dakota, Wyoming, Minnesota, Iowa, Montana and Nebraska.

The city of Madison recently entered into an agreement with the LAIC to provide Custom Touch with a rebate equal to half of the new sales tax revenue paid by Custom Touch’s Madison operations. Custom Touch could receive up to $1,000,000 back in sales tax rebates. The incentive was developed to aid in Custom Touch’s growth which generates additional income for the city.

"The city is excited to be involved in this economic development expansion for Madison,” said Madison Mayor Gene Hexom. “It will mean new jobs and new revenue for the city. It's a team effort with other entities involved and one we believe will reap benefits for years to come."

Heartland Consumers Power District of Madison has also been a key player in Custom Touch’s success, providing rebates and incentives for past growth. According to Heartland manager of community and economic development Russell Olson, Custom Touch could see over $50,000 worth of hiring incentives and utility rebates from Heartland on this project.

“Custom Touch’s expansion is a great example of how development of one company helps the entire community,” said Olson. “New jobs mean more money spent by these employees in Madison businesses, more kids in our school district and more tax revenue and increased sales for local companies Custom Touch contracts with. Heartland is proud to be part of economic development in Madison and thank the Larsons for their investment in our community.”

The owners of Custom Touch are proud their homes are locally produced and they work with local partners. According to co-owner Virginia McDonald, Custom Touch could not expand without their local partners and suppliers. She pointed out that each home that leaves their plant is Energy Star rated and the expansion will allow them to produce a house a day.

Custom Touch contracts with many local companies such as Montgomery’s Furniture, Rosebud Manufacturing, Dakota Fixture and Cabinet, Timmer Supply, Homestead Do It Center and others for floor coverings, furnishings, countertops and building materials. According to Clark Sinclair, owner of Montgomery’s Furniture, Custom Touch is an asset to the Madison community and their investment in this expansion is more good news for Madison’s future.

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