A Rural Center performance agreement for biorefinery Chemtex, through which the company pledges to create 65 jobs at a future Sampson plant in return for $650,000 in federal grant money, was approved by the City Council during a meeting this week.
The Rural Center requires a performance agreement regarding the number of proposed jobs for each project. The agreement commits the company to reimbursing the center for jobs not created, but does not commit the city to the project.
“These are non-binding,” said Mayor Lew Starling.
“This really sets out more for the company than it does us,” said city manager Shawn Purvis. “This states our agreement with Chemtex and what they’re going to provide. This has already been presented to Chemtex.”
The grant has been in the pipe for awhile now. It was not known whether the awarded money would come to fruition with the Rural Center’s troubles months ago, but Clinton officials have been told the funds are available through what is now the Rural Economic Development Division of the N.C. Department of Commerce.
Under the agreement, the Rural Economic Development Division agrees to use $650,000 to fund the project.
“The parties acknowledge that this amount will be repayable only in the event the business (Chemtex) fails to achieve certain job creation goals,” the agreement states. “The business hereby agrees to create 65 jobs within two years from the date of contract execution with the center. Failure to achieve the objective will constitute a default under the agreement, and the business would have to repay all or a portion of the funds.”
As part of the agreement, Chemtex would allow access to records “as reasonably necessary” to verify the number and types of jobs created, and the wages paid to employees.
Chemtex is currently in the development stages of locating a $200 million plant on a 40-acre site at Clinton Industrial Rail Park on Turkey Highway. The plant is expected to be operational by mid-2015.
The company engineered and constructed the world’s first commercial-scale cellulosic ethanol facility in Crescentino, Italy for Beta Renewables to produce cellulosic ethanol from locally sourced ligno-cellulosic biomass using its PROESA Process. That facility began operations in December 2012.
The Sampson plant would be the first commercial-scale, advanced biorefinery in the mid-Atlantic region.
In addition to 65 direct jobs, Chemtex is expected to create at least 250 indirect jobs, excluding those relating to the construction of the plant. Both Sampson County and the City of Clinton have made preparations to accommodate the plant, applying for infrastructure grants while also working to establish plans for the extension of water and sewer to the facility.
In addition to the jobs, the plant is anticipated to be the foundation for the further expansion and development a significant “green” industry in North Carolina. The plant, project officials said, will benefit the local economies and farmers of Sampson and surrounding counties, while blazing a trail in alternative fuels production on a national level.
Extending that water and sewer service to the N.C. 24 Industrial Park in preparation for Chemtex International Inc.’s location to the site is a $3.5 million endeavor. Along with the $650,000 in Rural Center funds, the city is planning to utilize an Economic Development Administration (EDA) grant in the amount of $1,758,150.
Even factoring in Rural Center and EDA funding, that still leaves needed financing of approximately $1.1 million, however there is potential of $869,000 annually, possibly as high as $1.3 million, in revenues from Chemtex.
Chemtex officials have assured city officials they are coming, having done requisite environmental impact studies and permitting. City officials have expressed support, but said they would need to be sure that Chemtex was coming before expending any city money. Purvis said none of the grants, whether the EDA or Rural monies, would commit the city to the project.
“Even if we’re awarded the grant, if it falls through with Chemtex, we do not have to take the money,” Purvis has said.
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at email@example.com.