Lessons to be learned from Rentech dealPublished 12:01am Wednesday, March 6, 2013
Rentech’s ill-fated plan to bring a $2 billion coal-to-liquids alternative fuel plant to Adams County was sketchy from the inception.
The deal sounded good, and the State of Mississippi agreed to offer the company a small — at least relative to the total investment planned — incentive, so it seemed to have everyone’s blessing.
After idling for a while, the project picked up steam when a deal was struck for Rentech to purchase the former International Paper site.
The complicated transaction was heralded as a win-win for all sides. IP got rid of the property. The county came away with approximately $1.7 million and Rentech had more land than it really needed.
But what Rentech lacked was a project that made viable economic sense without outside help.
None of us realized then that the flaw in the land transaction was the “what if” that eventually came to pass.
What if Rentech doesn’t build the plant? Without any contingency in place, a huge piece of valuable industrial property may have been out of reach for decades. The deal didn’t include clawback provisions that would have allowed the sale to be “undone” if the company failed to delivery on their promise of a facility.
Fortunately for Adams County, Rentech announced last week they plan to put the former IP property on the market to be sold.
It’s too bad the county no longer has the $1.7 million it earned off the deal. It might have made a good down payment on what could be an enormous new industrial park.
Lots of tough lessons are to be learned in the Rentech saga. However, we’re glad Natchez-Adams County’s economic future is in much more capable hands with Natchez Inc.’s current leadership.