By Mark Beardsley
The company planning to buy the former Louisiana Pacific building in Center appears to be heading toward a closing.
The Jackson County Industrial Development Authority’s attorney advised the IDA last Friday that Atlantic Wood Pellets has its financing in order and says it is moving forward with the project.
“We’ll see,” said Daniel Haygood. “It doesn’t hurt anything for us to prepare the closing papers.”
Chairman Scott Martin questioned Haygood about whether the IDA should install language regarding a time frame for the company to begin producing its product, presenting a scenario in which the company does “absolutely nothing” with the building for five or six years while enjoying the tax abatements.
“It may be too late,” Haygood advised. The attorney suggested that it is unlikely that the company would go through with the purchase, expend the money, and then let the property lie idle.
“They wouldn’t have any viable revenue stream coming out of it to be able to service the debt,” Haygood pointed out.
Atlantic Wood Pellets proposes to manufacture wood pellets that will be transported to Savannah and exported to the United Kingdom, where they will be sold to Drax, the largest generator of electricity in the United Kingdom.
Atlantic Wood Pellets has been in the process of acquiring the LP facility for over a year, a timeframe that has given rise to some concern over the viability of the project.
The IDA approved $110 million in revenue bonds for the project — “phantom bonds” as they are referred to since no money actually changes hands — as a means of giving tax abatements to Atlantic Wood Pellets.
Commerce officials are anxiously following the progress of the company, since the facility will use a large amount of natural gas provided by Commerce in its production process.