FORT SMITH -- City directors on Tuesday voted to issue up to $75 million in industrial development revenue bonds to a company taking over the mothballed Mitsubishi Power Systems plant at Chaffee Crossing.
Proceeds of the bonds will be used by Glatfelter Advanced Materials N.A. LLC to acquire, renovate and equip the 200,000-square-foot building for manufacturing specialty paper products.
"Glatfelter Advanced Materials N.A. LLC will be solely responsible for the debt service payments of the bonds," acting City Administrator Jeff Dingman wrote in a memorandum to directors. "The city has no obligation to make the bond payments."
Along with the the industrial development revenue bond issue, which will gain the company a lower interest rate, Dingman's memo said Glatfelter will make payments in lieu of property taxes for 15 years that will be equal to 35 percent of what it would normally pay each year in property taxes.
The York, Pa.-based company announced last month its intention to buy the plant and invest $80 million in its purchase and renovation. Company officials said they plan to hire 83 workers within three years at an average wage of $25 an hour.
The Arkansas Economic Development Commission offered Glatfelter an incentive package that included $2 million from the Governor's Quick Action Closing Fund. The company also will receive a cash rebate equal to 3.9 percent of its Fort Smith payroll for 10 years and sales tax refunds on building materials, taxable machinery and equipment for the plant.
Mitsubishi finished building the plant in 2011 at a cost of $100 million but never opened it after General Electric Co. sued Mitsubishi in federal court in Fort Smith and elsewhere, alleging patent infringement involving wind generators. Mitsubishi had intended to manufacture wind generator components at the Chaffee Crossing plant.
The lawsuit in Fort Smith was dismissed in 2014.
Chaffee Crossing is made up of 7,000 acres on the west end of Fort Chaffee that the U.S. Department of Defense declared surplus in the 1990s as part of the Base Realignment and Closure effort to downsize the military.
The Mitsubishi plant was part of the Fort Chaffee Redevelopment Authority's effort to return the former military property to civilian residential, commercial and industrial use.
State Desk on 04/06/2016