By Valerie Werkmeister
Last week, members of the Posey County Council took control of the reins on a major project to bring a fertilizer plant to the county. The council held a special meeting last Wednesday, June 19, and unanimously approved the reissuance of $1.2 billion in bonds to finance the project for the Midwest Fertilizer plant. The company has been linked to a Pakistan-based corporation, The Fatima Group.
The action came on the heels of Governor Mike Pence’s announcement last Tuesday, in which he authorized the Indiana Finance Authority to release and transfer its control of the bonds to Posey County, thereby ending the state’s involvement with the project.
Pence withdrew support for the project last month citing concerns that the fertilizer may be misused in explosive devices against American troops in foreign countries.
The Governor’s office released the following statement: “The State of Indiana stands by its decision to withdraw support for the Midwest Fertilizer project since Department of Defense officials still have not been able to independently confirm Fatima Group’s promise to replace their current fertilizer in Pakistan with a formula less susceptible to misuse by hostile forces in the region.”
According to Thomas Campbell, a representative for Midwest Fertilizer, the fertilizer will be consumed by U.S. farmers within a 200-mile radius of the facility. The availability of inexpensive natural gas sources, the proximity to rail, truck and water shipping capabilities and the availability of federal disaster bonds combined to make Posey County an attractive area to locate the company.
County officials are excited about the opportunity the proposed facility will bring to the county as well as the entire region.
John Taylor, Executive Director of the Posey County Economic Development Commission (EDC), said the construction phase of the plant will employ as many as 2,500 construction workers over the next three years, 309 permanent jobs and an expected economic impact of $1.8-$2 billion over the next 10 years.
According to Jonathan Weinzapfel who served as legal counsel for the Posey County EDC, the county has offered $143 million in tax increment financing to Midwest Fertilizer. They have also offered tax breaks that will be based on the number of Posey County residents it hires.
“I’m very proud that this has been just a huge, huge team effort. The Economic Development Coalition of Southwest Indiana and Greg Wathen, has been very instrumental in assisting with this project. The county council and county commissioners have all rallied around the project,” Taylor said.
Concerning the plant’s safety, in the wake of the explosion of the fertilizer plant in West, Texas, both Campbell and Thomas stated the facility will be world-class, state-of-the-art plant.
“This particular project will probably be the safest fertilizer facility on the face of the earth. As the federal government begins to tighten up the laws around fertilizer, this company will already be at the forefront,” Taylor said.
Campbell stated the plant will be safe and have a light impact on the environment. Natural gas is the key component used to produce fertilizer. He added there will be very little waste in the manufacturing process. Campbell also acknowledged the plant will produce urea ammonium nitrate, which is not the same type of fertilizer involved in the explosion in Texas. The new facility will also have its own dedicated fire department and crew.
Officials must act quickly to market the bonds which are set to expire July 1. If Posey County officials had not acted quickly, Midwest Fertilizer may have missed out on the opportunity to utilize the disaster bonds. Wathen expressed confidence that the economic development coalition will be able to sell the bonds in time.
Walter Kulakowski of Guggenheim Securities in New York explained the bond process. The bonds will mature in December and funds will be held in escrow for the company until then. He stated there will be no financial obligation to the county or the taxpayers. The county does not bear any risk if the company fails. The risk lies solely with the bond investors.
In the meantime, a site for the facility must be secured as well as various environmental permits.
By Valerie Werkmeister
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