Interstate Packaging Inc. is staying in Albert Lea, the company has confirmed.

The past few weeks there was talk among local business leaders that the company might move to Owatonna.

Interstate Packaging President Steve Tripp said Monday that it indeed had been in negotiations with the owners of a building in Owatonna and with Owatonna city officials. The company had selected Owatonna after looking at several cities.

The search took place during more than six months of negotiations over rent at its Albert Lea building, 1851 S. Margaretha Ave., a site with 125,000 square feet of space. The Owatonna location was comparable in size.

“They both have their advantages and disadvantages,” Tripp said.

Tripp credited Albert Lea officials, and in particular Albert Lea Economic Development Agency Executive Director Dan Dorman, for putting together a deal that keeps Interstate Packaging in Albert Lea last week. The deal calls for the company to purchase the property, with the ownership transfer taking place July 1.

“It makes sense to work out a resolution,” Tripp said.

He said cities should value having a strong economic development agency and should stay aware of competitive advantages and disadvantages.

Interstate Packaging has about 45 employees.

Tripp declined to give the building’s price tag, citing the deal’s confidentiality. Interstate Packaging will purchase the building from father and son Brad and Steven Wright.

Dorman said the deal almost didn’t go through as the Owatonna plan was a day from closing. He credited all parties for picking Albert Lea.

“It was a team effort,” he said.

Tripp credited Owatonna officials and property owners for their assistance.

“It was the right decision to reach an agreement with the current owners,” he said.

The Albert Lea City Council in October approved a $200,000 loan out of the city’s economic development revolving loan fund to assist Interstate Packaging with more than $300,000 in equipment purchases. The loan, at 3 percent interest, is required to be repaid over seven years.

Tripp said the loan has helped the company reduce waste and down time.

The company makes corrugated cardboard products such as boxes for apples, cheeses, and toys, among other products. It makes point-of-purchase displays, partitions and other items made from cardboard.

Interstate Packaging was sold off from manufacturer Georgia-Pacific about three years ago. Tripp, who lives in La Crescent, is one of three owners. Prior to Georgia-Pacific, the company was owned by National Packaging Solutions Group. Before that, it was Interstate Packing, owned by the Wrights.