County to buy IP land for $9 millionPublished 12:15am Tuesday, April 30, 2013
NATCHEZ — Even as Adams County inks a $9 million agreement to buy the former International Paper property from Rentech, local economic development officials said they are working with five potential clients to keep the property in taxable hands.
Rentech’s board of directors ratified a sale agreement for the 478-acre property at 61 Carthage Point Road Monday morning.
Natchez Inc. Executive Director Chandler Russ said the property had to be purchased as a whole unit because Rentech was not interested in parceling it off.
The sale was official as of March 22, but the agreement did not become binding until the Rentech board ratified it, Adams County Board Attorney Scott Slover said.
When Rentech bought the property in 2008, the purchase price was not made public, though it was known at the time that the county netted approximately $2.9 million by acting as a broker for the deal. Slover said Monday Rentech paid approximately $9.5 million for the property.
Rentech bought the land with plans for a coal-to-liquid plant that never reached construction phase, and when the company put the property up for sale in mid-March, the asking price was $8.5 million. Russ said the price went higher because of a competing bidder.
Natchez Inc. is now working with the competing bidders about the use of the property, Russ said, and five potential industrial clients are interested in the property in some fashion.
“Anything in the steel, chemicals, petroleum — all of that type of industry that has a big need for rail infrastructure and river access — that site is going to play in,” Russ said.
“With KiOR taking the (former Belwood country club) site off the market, our land inventory had reduced down to literally 4.5 acres of marketable property remaining in the industrial park port area.”
One potential industry — Emberclear, which announced earlier this year the company was studying Adams County for a gas-to-liquids plant near the port — needed access to the river, and the IP land will provide that access, Russ said.
“For Emberclear, we had to have pipeline access to the river as well as frontage on the river to put in another liquid loading dock. The acquisition of this property also resolves all of our needs regarding that project in the way of right-of-ways, easements and frontage for liquid loading dock.”
Adams County Board of Supervisors President Darryl Grennell said the county board was unanimous in the decision to purchase the property, but that it was not a decision that came lightly.
“We have had long discussions on it, asking, ‘Is this going to be the right thing for the county?’” Grennell said “We have had those major discussions, and there was some hesitance, but eventually the board agreed to proceed with it.”
Supervisor’s Vice President Mike Lazarus said the supervisors might not have made the decision to buy the property if they had not had the input from Natchez Inc. that they did, and that the purchase could be considered a painful correction of a past mistake.
“When we sold that land to Rentech in the first place, we should have had a clause in the contract that said that if they didn’t put the land to use that it would come back to the county,” Lazarus said. “We are paying for that mistake now.”
In addition to adding land to the county’s marketable portfolio, Russ said the sale will help address the county’s industrial wastewater needs for many years as the property has a wastewater treatment facility that will be able to accommodate expansion for the foreseeable future.
The $4.7 million grant the county received from the Mississippi Development Authority to solve wastewater needs for the Elevance project was drawn from plans to repair IP’s former wastewater facility.
“That $4.7 million number wasn’t drawn out of thin air,” Russ said. “That is the cost estimate for refurbishing and bringing back to operational function the treatment facility at Rentech.”
The third benefit to holding the property is that it eliminates the extra party one would have to deal with when trying to recruit new industry, Russ said.
“Us being in control of it is very important,” he said.
Slover said the property will ultimately be paid for by bond, but when the first note will come due or how much it will be is unknown at this time because the county has not finalized the bond paperwork yet.
Lazarus said he believes the county will not have to pay a note on the bond before the property sells.
“It is a big step for the county,” he said. “We have to move that property. We have got to get it back on the tax rolls, and we have got to put some industry on there to get some jobs.
“It has port access, rail access and it is not affected by flood water — it is the best piece of property we can have now. I don’t foresee it sitting there for a long time.”
Russ said Natchez Inc. appreciates the commitment the supervisors were willing to make for the property.
“We understand it was a big commitment and was not entered into lightly without significant discussion or understanding the risk involved in it,” he said. “Once you sit down and look at the benefits versus our risks and take that into account, the investment into that property was something we could not walk away from.”