- Last Updated on 10:55 AM 01/06/10
- BY Paula I. Bryant
Supervisors approved a resolution in a special called meeting Friday afternoon supporting the Halifax County Industrial Development Authority’s (IDA’s) submission of a $5 million research and development grant to fund up-fit for a 20,000-square-foot facility that is not located in Riverstone Technology Park.
IDA officials declined to comment further on the possible location of the prospective high-tech industry, emphasizing only that it is not located at Riverstone.
According to the resolution, the facility could be expanded by an additional 100,000 square feet and would be leased by an economic development prospect.
In addition to the $5 million grant, the resolution also states the IDA will provide a match of $13,165,000 in the form of a loan guaranteed by USDA-Rural Development for the purpose of purchasing equipment for the economic development prospect.
The IDA plans to recover the matching funds through a binding lease agreement with the prospect, the resolution states.
IDA Project Manager Jeff Reed told supervisors prior to the vote Friday that he had just left a meeting with representatives from the prospective high-tech company that could invest between $23 to $25 million in this area creating 199 new jobs over a five-year period and offering employees a starting salary of $41,000 in the first 30 months and a weighted salary of about $51,000 after 60 months.
Reed stressed the new economic development project “is not tied to Riverstone,” adding, “but I cannot tell you what they are looking at doing.”
Supervisor Bowman questioned whether the county would be liable or have to guarantee any part of the $13 million loan.
“I can tell you at this point Mr. Bowman that we are led to believe that no guarantee is going to be required. We may have to find out more information as we get into this, and I think it will depend on how successful we are with the grant application,” Reed said.
He added the USDA guarantees loans at the level of $5 million or more at 70 percent by the federal government, and the original bank the IDA has been working with on this project “was happy with that.”
“That’s a pretty comfortable guarantee to a bank lender,” Bowman said of the 70 percent.
Supervisor Chairman William Fitzgerald reiterated an earlier question by Bowman asking what specifically would be the county’s moral obligation.
“The financial institution we were working with indicated they were not going to need one, and we believe that will be the case with just about anyone we work with because it is being guaranteed already by the federal government,” Reed responded.
If at the last minute, a guarantee from the county becomes necessary, Reed assured supervisors that would be a negotiation point that would be brought back to the full board of supervisors.
“Right now we have no reason to believe that is going to be needed,” he added.
The time line of this project involves applying for a grant from the $100 million research and development fund set aside by the tobacco commission.
Applications are due today, Reed told supervisors, noting the IDA’s application is the first application to be received.
“We are under the impression they will receive these Nov. 9, and the committee will meet within 10 days to review the applications they have received and then award sometime in January. If the commission committee is not comfortable with that process, they may delay awards until April,” he said noting the committee’s next meeting is set for Dec. 10.
Reed explained the IDA has vetted this research and development project with the Virginia Economic Development Partnership and with the tobacco commission staff, and staff feels very comfortable with the application meeting their criteria.
“We have no feeling on how the funding will go,” he added, “whether it will be full, partial or none,” he added.
Before making the motion to approve the resolution, ED-4 Supervisor Bowman said he is aware the IDA has been working with this particular prospect for six months.
Seven supervisors attending the meeting unanimously approved the resolution authorizing the IDA to submit the grant application by today’s deadline.
ED-6 Supervisor Wayne Conner was unable to attend the special called meeting.