Hopewell council OKs grant for plant
By Caitlin Davis, Senior Staff Writer
Aug 19, 2014, 10:31
HOPEWELL — The bio-energy plant has been given another vote of confidence by the city of Hopewell. Vireol Bio Energy LLC will be given a $250,000 matching grant from the city. Council adopted and accepted the performance agreement securing the funds.
However, words of doubt still lingered among council on the future of the plant.
Vireol, a UK-based company, purchased the former Osage Bio-Energy Plant last year for $13 million and made an announcement shortly thereafter that the company would disassemble the plant and ship the parts to a similar facility overseas.
Then Scoular Company, based in the Midwest, signed an agreement last fall with Vireol to lease the one-million-bushel grain terminal on the plant site. The announcement was made in December that the plant would open and create 70 jobs, 45 being Vireol employees and 25 being sub-contractors.
Peter McGenity, CEO of the plant on Sixth Avenue, spoke at the council meeting Tuesday evening and said the plant is on track to meet all the terms of the performance agreement.
McGenity said the plant, to date, has invested $20 million in private capital, created 45 direct jobs and 50 indirect jobs. Vireol has produced seven million gallons of ethanol and the plant is gearing up to be able to produce five million gallons of ethanol per month by the end of the year.
“We’re hopeful now that we have a foundation for significant further capital investments in the plant and creating even more jobs for the future in Hopewell,” he said.
McGenity said the plant is committed to employing at least 70 people with an average salary of more than $50,000.
McGenity also told council that the future of the plant was also a bright one, indicating the plant is “committed to investing $26 million and we’re committed to purchase at least 27 million bushels of Virginia grown grains which has a value of $100 million over a three-year period.”
City Manager Mark Haley told council that in order for the plant to receive the matching funds from the state, the city must approve the performance agreement. Back in March when the performance agreement was brought before council, it was not accepted.
Earlier this year, Haley told council that Vireol had been seeking financial support in the opening of the plant, one of which was the Agricultural and Forestry Industrial Development grant.
Part of the stipulations is that the city must match the $250,000 grant, which is given over a period of two years, with $125,000 per year. To be able to make the match, the city had proposed 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.
Councilor Jackie Shornak, who was not in favor of the agreement in March, remained strong in her continued opposition.
“I just can’t support it,” she said. “I just do not see that you have made the commitment to Hopewell to stay here, to create jobs. I don’t know, you could be debunked tomorrow but right now I can’t make the decision.”
For Shornak, it was too soon to judge Vireol’s performance in the city, saying perhaps after a year of the doors being opened, council could better make a decision.
“If you had been here a year and you could have shown me that you all could have invested and brought more revenue into the city of Hopewell, I could understand that. I wouldn’t have problem helping out, but I don’t know that,” she said, also noting the various issues the city had with Osage Bio-Energy, the previous owners of the plant.
“We understand the history of the previous owners and that is history,” McGenity said.
Councilor Wayne Walton also moved to put the past in the past and make a new mark for the city of Hopewell.
“There is a lot of history that hopefully we can move past some of that stuff,” he said. “I know that we’re an industrial town. ... Supporting jobs, supporting industry is what we’ve always done here in Hopewell.”
Councilor Roosevelt Edwards also stood in opposition of the plant, not wanting to believe that any of the employees at Vireol were from Hopewell.
“I don’t believe anybody works there from Hopewell,” he said. McGenity said the plant does support local jobs, with 15 to 20 percent of the workforce living in the city, including the human resources coordinator.
Councilors Edwards and Shornak were the only councilors who did not accept the performance agreement and Councilor Christina Luman Bailey abstained from voting.
“We’re pleased to report we’re now at a very, very strong trajectory,” McGenity said. “We have a really good foundation now to build a successful business for Hopewell. ... We intend to hopefully in 20 years, we will be talked about as a legacy business as well.”