Weak economy slows Sleepnet growth rate
20 new jobs will come, but not at original projected date
By Nick B. Reid
Hampton Union, December 10, 2013
[The following article is courtesy of the Hampton Union and Seacoast Online.]
HAMPTON — Selectmen had questions after a Hampton company that received a $375,000 grant to boost its production of masks that help patients suffering from sleep apnea didn't create the jobs it promised. But the company says it's going to repay the loan, and it will still create those jobs in a slightly longer time frame.
Sleepnet Chief Operating Officer Michael Rubin said the company will create 20 jobs because of new products made possible by the grant. He said Sleepnet has received early positive feedback on the products, but "significant volume increases (and corresponding hiring) has not yet occurred as the marketplace evaluates these products, a standard process in the medical device industry."
The town of Hampton is involved because it serves as a middleman between Sleepnet and the federal government, which gave the grant, according to Town Manager Fred Welch.
The town sponsored the Community Development Block Grant in August 2010 after being asked by the Coastal Economic Development Corporation, which believed that Sleepnet could add new products and create 20 jobs. At that time, Hampton agreed to accept $400,000 from the U.S. Department of Housing and Urban Development for that purpose and pass it on to be distributed by the CEDC.
In February 2012, Sleepnet said it had been hindered by the flagging economy, but vowed that it would be able to accomplish its goal with an extension, which the selectmen granted unanimously.
However, Welch said, no jobs have been created yet. The selectmen were asked to sign off on a document detailing repayment of the loan last Monday, but wanted to understand the situation better before signing.
Rubin said Sleepnet will grow in sales and employee count, but "on a more traditional growth curve compared to the one anticipated by the terms of the grant."
"There is limited flexibility in the amount of time (the government agencies) can wait for the originally promised 20 new jobs," he said.
Dan Gray, managing director of the CEDC, said the "global economic slowdown" has affected many businesses over the past few years.
"While our financing may not have had the exact result in terms of hiring within the (U.S. Department of Housing and Urban Development) time frame, we are pleased to have helped the business position itself for future growth and hiring within the Seacoast region," Gray said.
He said the CEDC will repay Hampton, which will repay the loaning government agency. Sleepnet will repay the CEDC. If the 20-jobs objective had been satisfied, the loaning agency wouldn't have asked for repayment, and CEDC's coffers would have grown to continue supporting local businesses.