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Auburn’s Northwest Territorial Mint a real money maker
by JOSEPH TURNER

Northwest Territorial Mint is a small company, but its reach extends around the world. The company along the West Valley Highway in Auburn takes large bars of silver and gold and melts them down to make tiny bars of silver and gold so they’re more affordable to small investors.
It also mints coins for admirals, generals and military units to commemorate their rank or tours of duty in Iraq or Afghanistan, and now the U.S. military wants the company to make Bronze and Silver Stars to honor its heroes.

It has quietly become the unofficial mint for 19 countries by making legal tender for nations in South America, Pacific island nations and on the European continent, countries too proud to let it be known that a small company in America – not their own treasuries – is minting their currency.

“National currency is something that countries are sensitive about, even though three-fourths of them farm it out,” mint owner Ross Hansen said in an interview earlier this month. “There are over 200 countries in the world, and only 53 have national mints. A lot of countries are so small that it’s not economical for them to set up their own mints. But they’re still sensitive about it.”

That’s why, Hansen said, he couldn’t be more specific about which countries hire his company.

Hansen said he’s looking to move the company to Tacoma.

“Right now, we’re shoe-horned in here in three different buildings,” he said of his plant on the valley floor.

In the next three to five years, he wants to triple the size of his factory, double his work force, open his factory to public tours and create two museums to tell the history of minting and money.

He believes his factory and museums would be a perfect fit in Tacoma’s museum district. It could take advantage of the synergy between downtown and the Tacoma Dome with its museums for history, art, glass, children and, eventually, a car collection.

But land prices have gone up, so Hansen said he’s also looking at property in Federal Way as a fallback location.


TURNING BIG BARS INTO LITTLE BARS


Hansen has come a long way from the coin shop he once operated in downtown Auburn. In 1981, Auburn Precious Metals and Coins had only two part-time employees. It expanded to 10 full-time employees after he moved into an old bank building and started selling jewelry and renting safety deposit boxes.

He started minting his own coins in 1984, largely because he wasn’t happy with the quality of metals he was getting from private mints at the time and they refused to improve the products they were selling him. He started his own mint and drove the others out of business.

The Legislature gave Hansen’s company a tax break in 1985 because the state sales tax was driving his customers to states that don’t have a sales tax.

The bullion part of his business entails buying and melting 1,000-ounce – about 70-pound – bars of mostly silver and turning them into 1-, 5- and 10-ounce bars for investors.

Those large bars are out of reach for smaller investors, he said, with gold hitting an all-time high of $921 an ounce in late January and silver selling for $16.70 an ounce – a 28-year high.

“Would you pay $990 for a bar of gold here or drive to Portland and pay only $900?” Hansen asked. So lawmakers exempted that portion of the business from sales tax in the mid-1980s.


STATE ALLEGES UNFAIR PRACTICES


This year, Hansen is asking the Legislature to extend the company’s tax break to the state business and occupation tax.

He faced a setback earlier this month when the state Attorney General’s Office sued his company.

The lawsuit, filed in King County Superior Court, alleged that Northwest Territorial Mint failed to deliver products to customers on time and was unfair in its refund policy.

“Many consumers who bought bullion from Northwest Territorial Mint lost the value of their investment,” Paula Selis, senior counsel in the Attorney General’s Office in Seattle, said in a news release. “By the time the order arrived, the gold or silver was worth less than what they paid.”

The Attorney General’s Office, the Better Business Bureau and the Federal Trade Commission have received 82 complaints against the company, the news release said.

Hansen said the Attorney General’s Office doesn’t understand the nature of his business. He contends his customers have not been financially harmed and that his delivery and refund policies are tailored to a business where metal prices can fluctuate hourly.

He also argues that his company deals with investment products – not consumer items – and therefore is not subject to a state consumer-protection law that requires companies to refund customers’ payments within 30 days if they don’t deliver when promised.


600,000 POUNDS OF COPPER A YEAR


Gold and silver have more allure, but copper is the metal that his mint uses most – 600,000 pounds a year, Hansen said. It is the major component of brass, and most coins are made from a copper nickel alloy or a copper zinc alloy.

The mint makes a lot of coins. The military accounts for 60 percent of what is called the custom minting field.

“Every unit in the military has its own coin – every commanding general, every admiral, every ship, every unit,” Hansen said. “And there are literally thousands and thousands and thousands of unit coins.

“Guys also like to commemorate events like a tour in Iraq or Afghanistan,” he said.

Northwest Territorial Mint now has 135 employees. The company makes coins for the FBI, the Secret Service, police officers, fire departments and emergency medical technicians. Microsoft and Boeing order coins they can give to workers upon completion of a special project or for their traveling executives, Hansen said.

“Coins are like business cards,” he said. “People exchange them. It’s like a secret handshake.”


‘PEOPLE THINK THIS IS SEXY’


Hansen said one reason he wants the museum is to showcase the talents of his staff and the work they do.

“What we do, people think this is sexy,” he said, referring to the artistry and pouring molten metals into forms.

“I can’t draw a straight line, but I have seven full-time artists on staff and a number of sculptors who create these coins,” he said. “A coin is a piece of metal with art on it.

“The history of money from different cultures over the years, we think that has a lot of appeal,” he said. “And we’ll give them a factory tour.”

Last summer, Hansen brought Rob Vugteveen on board to head up the money and minting museum project. Vugteveen, who has a masters in geophysics, developed the Asarco Mineral Discovery Center in Tuscon, Ariz., a former open pit mine that’s now a museum.

The Museum of Minting and Money would tell the story of the minting process from the Roman era to present day, Vugteveen said.

“We don’t have an extensive collection of items, but we know people who do,” he said. “We’re in conversation with people, and they are as excited as we are and are moving forward.”

Hansen said he’d like to have his new factory and museum open in late 2010.



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