As a Jefferson County judge evaluated a deal between local officials and Rockwool, state officials offered the company their own proposal.
According to the deal, signed by the chairman of the Economic Development Authority and Rockwool May 2, the state would issue $150 million in bonds to buy property from Rockwool, the company building a controversial stone wool manufacturing plant in the state’s Eastern Panhandle. The Gazette-Mail obtained a copy of the deal this week.
The deal is similar, in part, to the so-called PILOT (payment in lieu of taxes) agreement that allowed the Jefferson County Development Authority to acquire the 130-acre property and lease it back to Rockwool. The City of Ranson and Jefferson County’s board of education, sheriff, assessor and county commission all signed.
In an effort to kill the project, residents challenged the PILOT agreement in Jefferson County Circuit Court arguing the company should have to pay the same taxes every other citizen. But a judge said he couldn’t rule because the lack of a vote by the county development authority rendered the PILOT just a proposal, not a binding agreement.
Had the Jefferson County Development Authority signed it, the property would have been exempt from state property taxes only if considered a public property, the judge said in his August decision.
Residents thought that quashing the PILOT agreement might mean Rockwool would go away. The state’s offer proved otherwise — a deal residents and some public officials didn’t learn about until this week. The revelation came only after they filed a public records request.
This week, they wrote to about 20 public officials, including Gov. Jim Justice and the EDA itself.
“It looks to me like Economic Development Authority is simply acting on its own to do what the Jefferson County Development Authority thought it did, but which [Jefferson County Circuit] Judge Hammer said it didn’t do, which is to give away that property tax break,” said John Doyle, D-Jefferson.
The plant has been a focal point for residents, who have protested, filed lawsuits and made five-hour trips en masse to Charleston. For residents who found out about the state’s $150 million deal five months after Rockwool and the EDA signed it, the agreement is just another reason to be skeptical.
“It’s not a PILOT because it’s not a ‘payment in lieu’ but it does seem to provide them tax alleviation as well as a massive loan for 150 million,” said Christine Wimer, president of the Jefferson County Foundation, a citizen group that sent the letters.
According to the EDA’s website, the body is “charged with the responsibility to develop and advance the business prosperity and economic welfare of the State of West Virginia,” by offering financial assistance, including loans, direct financing and operating leases to industrial and commercial developers. The board is run by nine members, all appointed by Gov. Jim Justice, who has publicly supported Rockwool.
When it’s built, Rockwool will manufacture stone wool insulation at its factory, using milled coal and natural gas to melt rock, creating a lava-like material that’s spun into woolly fibers. This plant has clearance to build two 200-foot stacks and other smaller stacks and would use between 100,000 and 125,000 gallons of water a day. The company says it plans to create 150 jobs. Rockwool has secured other funding from the state, including a $2.2 million forgivable loan, outlined in a 2017 memorandum of understanding.
Two citizen groups said as much in letters sent Wednesday to public officials.
“Usually, packages like this are used to entice companies to an area with demonstrable need of economic development,” the letter says. “However, Rockwool was, at the time of the May 2, 2019 meeting, clearly already committed to building in Jefferson County and did not require new state commitments of $150 million in bonds to entice it.”
“We have received the letter and at this time what can be said is that the West Virginia Economic Development Authority conducted an open public meeting, that was properly posted on the Secretary of State’s website, to discuss this financing and they voted to approve it,” Brian Abraham, general counsel for Gov. Jim Justice, said in a statement provided to the Gazette-Mail. “This project has obtained the proper permits and continues to move forward under the scrutiny of the Department of Environmental Protection to make sure that the terms of those permit [sic] are being followed.”
The EDA did not respond to a request for comment Thursday.
In a statement, Michael Zarin, a spokesman for Rockwool, said the company looked forward to “delivering on the economic commitments we have made to the local community.”
“To support our investment, our expectation remains that JCDA will fulfill the commitments it undertook in the original PILOT agreement. The WVEDA resolution provides additional assurance that the tax incentives that have been committed will be delivered,” Zarin said.
Residents should have been more widely informed about the agreement, Doyle said.
“It may be legal, but it is certainly wrong,” Doyle, who received a letter Wednesday afternoon, said. “If you’re going to give away property taxes going to a county, that county should be required to give its permission.”
He noted that this loss in property taxes could pull funds from schools across the state, adding that the EDA “snookered the people of West Virginia and, in particular, the people of Jefferson County.”
“It’s an attempt to obfuscate what is really happening so that the people don’t fully understand it: What is happening is that Rockwool is getting a $150 million loan at a low interest rate and doesn’t have to pay $60 million in property taxes,” said Doyle, referring to a figure he said came from Rockwool North America’s president.
When Judge Hammer threw out the lawsuit in August, Shaun Amos, president of Jefferson County Vision, the citizens group, said the ruling was a step toward “removing Rockwool from our community once and for all.”
A spokesman for Rockwool said “We are fully confident that relevant authorities will deliver the promised economic incentives.”
By that point, state authorities and Rockwool had already signed their $150 million agreement.