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Posted April 26, 2012 | 2 Comments
EDA director says manufacturing plant still a possibility
By Joe Beck -- email@example.com
FRONT ROYAL -- The executive director of the Warren County-Front Royal Economic Development Authority isn't giving up on reviving plans for a new manufacturing plant at the former North American Housing site between Front Royal and Strasburg, despite an inability to obtain conventional financing.
Jennifer McDonald said Thursday the EDA is still working with TBI Investments, Inc. of Summersville, W.Va. and People, Inc. of Abingdon on finding a way to qualify the manufacturing plant for a federal tax credit program that could restore hope for opening the facility. People, Inc. is a community action agency with a mission that includes helping economic development in low income areas.
"The project is still viable, however they were unable to obtain conventional financing due to being a start-up business," McDonald said in an e-mail.
The planned site at 5210 Strasburg Road has remained closed and deserted since TBI president Lindsay W. Ray and McDonald said in December that hiring would begin soon. Ray and others said the plant would eventually employ up to 50 people at jobs averaging $42,000 a year.
A for sale sign appeared at the 17.26-acre parcel a few days ago after Ray signed a release allowing the property to be placed back on the market. The property is owned by Champion Homebuilders of Troy, Mich.
McDonald said TBI agreed to allow the property back on the market "to be fair" to Champion and "allow the property owner to continue marketing the property in case things fall through."
The project has stalled over eligibility requirements governing the federal government's New Market tax credit program. Bryan Phipps, vice president of development for People, said the proposed plant is located in a census tract that falls short on measures of poverty, unemployment rate, per capita income and other social and economic indicators that determine whether a project will receive the tax credits.
Phipps said the site technically qualifies for the program, but the data do not justify rating it as "highly distressed." As a result, he said, TBI's plant doesn't receive the same priority as other proposals for financial assistance that qualify as "highly distressed."
"It's very much a question of priorities," Phipps said.
Phipps said People, Inc. must reserve 75 to 100 percent of the tax credits it allocates to census tracts identified as "highly distressed."
He said People, Inc. has discussed a possible "mechanism" under which the Warren County plant site might be moved into the "highly distressed" category, but there has been little progress in the last two months.
"We talked with them earlier and gave them our parameters for our financing," Phipps said of TBI. "We haven't moved very far since then."