NATCHEZ — Rather than taking $3 million for the KiOR project that would have to be paid back, Adams County is taking $2 million that won’t.

Adams County has agreed to build a levee on the former Belwood golf course, which floods during high-water events, as part of an economic recruiting package for KiOR. The company announced plans last year to build an alternative fuels production facility on the site, committing to a $350 million investment that would generate 320 direct and indirect jobs.

In September, the Adams County Board of Supervisors voted to apply for a $3 million Capital Improvements Revolving Loan to partially finance the levee.

But when the MDA reviewed the loan application, the levee work wasn’t eligible for the loan, Natchez Inc. Executive Director Chandler Russ said.

Now, instead of taking out the loan, the county will receive a $2 million grant from the Mississippi Development Authority for the levee, and a $1.9 million grant that will likely be used for a new well, a water tank and improvements to existing water lines, Natchez Inc. Executive Director Chandler Russ said.

“Instead of putting in that CAP loan, we were able to secure $2 million in grant money (for the levee),” Russ said. “We came out of there in good shape. We were pleased the MDA was able to work with us and continue to be a good partner in this process.”

Board of Supervisors Vice President Mike Lazarus said he thinks it is “excellent not to have to pay that loan back.”

A bond will finance the remainder of the levee. While the supervisors have advertised an intention to issue a bond for as much as $7 million for the project, Lazarus said that does not mean the county will borrow that much.

“That ($7 million) amount is for any kind of incidental,” Lazarus said. “We have thought all along that it is going to cost $5 million.”

The supervisor said he believes the levee bids may come in very close to the $5 million mark based on the number of inquiries that have been submitted by contractors.

“I expect the price of the levee to come in $5 million or under, so the grant will be basically paying for half of the levee.”

The levee work will not move forward until the county enters into a memorandum of understanding with the company about its commitment, Russ said.

“We don’t foresee us not being able to get to terms with them,” he said. “It is a matter of getting everybody back together in a room and getting agreements in place.”

The next meeting is tentatively scheduled for next week, Russ said.

KiOR officials have previously said work on the Adams County facility will begin once the company’s facility in Columbus — which is a smaller-scale version of what it plans to do in Natchez — begins production. Operations at the Columbus plant began last fall, though in late February a company spokesperson declined to state if fuel was being produced there at the time.

Statements about production would come at the company’s fourth-quarter investor’s conference call, the spokesperson said.

The earnings call is scheduled for Monday.