The Summit Poultry/Horizon Foods deal has until now been a mess for the Economic Development Corporation of Jefferson County. It could have been a huge boon to the local economy, but it just never came to pass. All that stands to change now thanks to a new agreement reached between the Economic Development Corporation (also known as the “tax board”) and a new group of investors.
As reported in The Commercial, in 2012 when Horizon Foods opened its plant, the board loaned Horizon the money to buy refrigeration equipment, with the provision that the debt would be repaid by the creation of jobs at the plant.
Horizon went out of business and defaulted on the loan. The board then filed a lien on the equipment. That lien remained when Summit took over early this year.
Board member Glenn Barnes aptly circumscribed the new agreement with a question to board chairman, George Makris, “So the idea is to get as much out of this as we can?”
Makris responded, “Correct. We’ve already spent $5,000 in legal fees.”
During the meeting Tuesday, Makris outlined some of the terms with the new group of investors. Makris said the group that had provided financing to Summit was no longer involved. A new group, Agri-Max Inc., will be taking over by the end of this month and leasing the facility back to Summit, Makris said.
At the conclusion of the deal, Agri-Max will pay the tax board $163,000 in cash, which is half of the debt left by Horizon for the refrigeration equipment plus the cost associated with storing and securing the building until Summit moved in.
Makris said the $163,000 still outstanding on the debt can be paid off if Summit creates 100 new jobs by Dec. 31, 2015, and if that doesn’t happen, the board will file another lien on the equipment.
According to Makris, Agri-Max has a “pretty good pool of funds.”
Board member and former White Hall mayor, Jitters Morgan added, “I don’t see how we can lose on this.”
This turn is most certainly a step in the right direction. Anything that recoups a substantial portion of the public’s tax investment is a good thing.
In thinking about this situation in broader terms, we hope that this exercise has been one of institutional learning for the Economic Development Corporation. We recognize their job is not easy and that chances must be taken.
We also recognize their obligation to be good stewards of the public’s money. The deal with Agri-Max goes a long way toward fulfilling that obligation.
As Makris and the other members of the board hope, we likewise hope that Agri-Max will make good on its end and provide another hundred desperately needed jobs for our community. Do we hear 150?