Ethanol plant gets Va. grant, will open
By Caitlin Davis, Senior Staff Writer
Apr 11, 2014, 13:32
HOPEWELL — After years of turmoil and controversy, unpaid taxes, Osage being extinct, Vireol coming in, and the possibility of being shipped overseas to England, the ethanol plant in Hopewell will finally open its doors.
Gov. Terry McAuliffe announced on Wednesday that Vireol Bio Energy LLC will begin production.
The announcement comes on the tails of the $250,000 Agricultural and Forestry Industrial Development grant that had to have the support of City Council. At the end of March, council showed their support in a 3-2 vote to have Vireol move forward and apply for the grant.
“In the first month of my administration, I was able to sit down with Vireol’s business and investment team to share with them my commitment to creating jobs and diversifying the Commonwealth’s economy and encourage them to begin their ethanol production here in Virginia,” McAuliffe said in the press release. “Vireol’s decision to invest in Virginia rather than sending the plant’s assets overseas brings to life an impressive yet completely unutilized facility that will create good paying jobs right here in Virginia.”
The company is slated to produce 70 new jobs at the plant, up to 3,000 associated jobs in the wider Virginia agricultural industry, and invest over $26.2 million to begin production at the facility.
Part of the stipulation of the grant is the city must match the $250,000, which is given over a period of two years, with $125,000 per year. To be able to make the match, the city is proposing to give Vireol a portion of the rebate from the machinery and tools tax. The M&T tax is based on the appraised value of the plant which currently sits at over $178 million.
The projected rebate from Vireol is $409,263 and the rebate is able to be given to companies located in the Enterprise Zone, which is endorsed by the state. The state is awarding the City of Hopewell the maximum amount of the grant, which sits at $250,000.
The grant was created during the 2012 General Assembly session to grow the state’s agricultural and forestry industry.
A performance contract is also attached to the grant. In order to get the grant, Vireol must meet certain criteria, such as creating jobs and using a certain number of bushels of locally grown produce.
In a press release sent out by the governor’s office, Vireol is expected to spend more than $100 million to purchase from Virginia producers. This will create 21.7 million bushels of grain that the company will need over the next three years. With those millions of bushels of grains, Vireol is estimated to produce 170 million gallons of ethanol over a three year period.
“Many thanks for the grant. This is great for the City of Hopewell, great for the Commonwealth of Virginia and great for our farmers,” Delegate Riley Ingram, R-62 said in the press release.
The executives at Vireol sent out a press release on the passing of the grant as well, pleased with the approval and the future in the city of Hopewell.
“The plant is ideally located for road and rail access and will take advantage of Virginia’s rich corn and small grain production. It has the capability to produce up to 63 million gallons of bioethanol a year, which will be blended with gasoline to help the U.S. reach its renewable fuel targets, while also supporting jobs’ growth and the agricultural community,” it states.
Vireol also is projecting that the plant will produce a revenue of about $150 million in the first year of operation.
Peter McGenity, CEO of Vireol LLC, stated that the company is ready to begin productions in the city.
“We are delighted to advise that with the support of Governor McAuliffe’s office and the City of Hopewell, we will be starting production of renewable ethanol this month,” McGenity said. “After reviewing our original strategy to relocate the plant to UK, we are pleased to emphasize our commitment to all of our stakeholders based on starting up one of the world’s most modern ethanol plants here in Hopewell.”
When Vireol opens its doors later this month, it will be the largest ethanol plant on the East Coast.
“The City of Hopewell eagerly anticipates the potential opening of the Vireol operation here in our great city,” Mayor Mike Bujakowski said in the press release. “... We anticipate a long and prosperous relationship with our new business partners from across the Atlantic.”