County maps Elevance funding
Published 12:01am Tuesday, July 19, 2011NATCHEZ — Payment plans to beef up the Adams County port area to make way for new $225 million chemical company Elevance Renewable Sciences are under way.
The Adams County Board of Supervisors voted unanimously at Monday’s board meeting to advertise for a bond issuance to move forward with financing plans for $7.1 million in Elevance-related infrastructure improvements.
The company, which creates chemicals that serve as ingredients in everyday products, is scheduled to begin construction in Natchez later this year. It is expected to create 300 construction jobs and 165 permanent jobs.
The cost of the Elevance project package is more than originally expected, Financial Advisor Demery Grubbs said, because a $500,000 match to revamp Government Fleet Road is now being added to the package.
“(Government Fleet Project financing) will get a better rate added into this pool,” Natchez Inc. Executive Chandler Russ said after the meeting.
The improvements to the port area included in the Elevance incentive package were originally priced at $6.5 million. The addition of the Government Fleet construction to the package and $100,000 cost of taking out a bond from local banks bumped up the total, Grubbs said.
The county has been working with the Mississippi Department Of Transportation on the $3.6 million Government Fleet Road extension project for approximately seven years.
Extending Government Fleet from Providence Road to the port will cut two miles off the trip trucks must make to the port.
The National Highway System Intermodal Connector Improvement Program is funding 80 percent of the project’s cost, and now the county’s $500,000 match is being grouped and financed with Elevance-related port improvements for cost efficiency, Grubbs said.
County engineer Jim Marlow said Monday construction of the road extension project should begin next week by W.E. Blain and Sons, Inc., who signed a 400-day contract for the project.
Other financing sources for Elevance include a Mississippi Development Authority grant for $2 million, a zero-interest loan from MDA Rail Loan for $2 million and a 20-year $3.1 million taxable bond, which the county will borrow from local banks.
Grubbs said the county will likely refinance the 20-year bond after 10 years, at which point Elevance will be placed on the tax rolls and bringing in more revenue than the “fee in lieu” of taxes it will begin paying after its first year.
Since the $3.1 bond will be dealt with at local banks, the debt service will not affect the county’s bond rating, Grubbs said.
Russ said Monday members of Natchez Inc. are already in talks with local banks about financing the county’s debt service for the Elevance improvements.
Grubbs said the county’s first annual payment on both its loans should be approximately $409,000.
The county should earn enough revenue to afford its debt service in just over a year when Elevance pays the county a fee of $296,000 in lieu of taxes upon completion of its first phase of construction.
The county will see its first fee from Elevance once services from the improvements begin, which is slated for the fourth quarter of 2012, Grubbs said.
The Adams County Port Authority has also pledged to pay the county $100,000 toward the county’s debt service once the improvements generate revenue.
“Worst case scenario the county has $10,000 to $20,000 to pick up for a few years,” Russ said.
Russ said fees from the second phase of construction will kick in three years from now, and the additional fees will be well in excess of what the county might struggle to come up with in the next two years.
“It’s really a wash, (the county) is not losing any funds at all,” Russ said.
Russ said the county will complete its obligations with the state and company from the incentive package with the $7.1 million that was detailed Monday.
However, Elevance is slated to fund further infrastructure improvements.
“The company agreed to fund up to $7 million additional improvements out of their pocket,” Russ said.
The county’s bond lawyer, Sam Keyes, asked the board for a resolution to authorize and hire he and Grubbs to proceed, which the board passed unanimously.
The county also unanimously voted to pass an intent resolution to take out bonds, which it will advertise in the newspaper.
