I had not heard anything for a minute about the billion-dollar titanium plant planned for north Fayetteville. That is, until Cumberland County sent out a recent news release that the bonds to finance the project would be considered by a government body that is probably unknown to most of us.
The meeting of the Cumberland County Industrial Facilities and Pollution Control Financing Authority is scheduled for this Thursday. It had been postponed from last Wednesday.
This body is to consider a final resolution authorizing the tax-exempt bonds of $1.3 billion for the plant. The authority would approve the bonds under a state financing act that invests in private companies that bring manufacturing and employment opportunities.
The Cumberland County Board of Commissioners unanimously approved the financing model in the spring. The North Carolina Department of Commerce and other state and local entities are fully behind the effort, which would build a plant that recycles titanium scraps that could be used in the aerospace and related industries. This type of “mini-mill” titanium production is supposed to have a light environmental footprint, and the effort, code-named Project Aero, is tapped to create more than 300 jobs with an average salary of $123,476, well above the current average for the county, which is just under $50,000.
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I have already wondered if Project Aero seems too good to be true. Time will tell.
But a few people have also asked me, what are we on the hook for? As in: What is the risk for taxpayers if things do not work out with American Titanium Metal LLC, a company started just over a year ago?
A different kind of financing model for Cumberland
American Titanium Metal wants to build a 500,000-square-foot facility as part of its operations. The land it would use is managed by developer Franklin “Rusty” Clark and located behind the Goodyear Tire & Rubber Plant on Ramsey Street.
The Financing Authority would issue tax-exempt revenue bonds purchased by private bondholders, whose money would be paid back from what the project generates. Neither local nor state money would be responsible for making up any shortfall.
Rick Moorefield, the county attorney, said in response to my emailed questions: “Neither the authority nor the county is liable for the bonds. These bonds are issued to comply with IRS regulations for tax-exempt interest financing for projects that recycle materials for use in the manufacture of a new product.”
He distinguished between the kinds of bonds at play in this project.
“This is not a bond issuance in the usual context of the county incurring debt to construct a county project,” he said. “Since 2011, only one other project that qualified for this type of financing has been developed in the county, and that bond issuance was for an amount not to exceed $27,000,000.”
Moorefield said he did not know the history of projects like these, if any, before 2010.
The Financing Authority issued $27 million in bonds to Cargill in Cumberland County to build a recycling facility that is projected to create 70 jobs by 2028. It would turn residual material from its soybean operations into feed, “rather than disposing of them in the landfill,” according to a document published by the North Carolina Department of State Treasurer.
Titanium plant expected to make ‘significant’ investments
Aero has been approved for a Job Development Investment Grant, a 12-year state grant that could pay the company as much as $8 million but only if the company meets performance obligations related to “job creation and investment targets,” according to the Commerce Department release.
Aero is expected to bring $37 million in payroll dollars, and state officials believe it will grow the North Carolina economy by $1 billion.
“Companies only make such significant capital investments when they are confident in the business conditions and collaborative partners at the location they choose,” Commerce Secretary Machelle Baker Sanders said in the news release. “North Carolina once again comes through with flying colors, and we welcome Project Aero to our great state to join our growing aerospace sector.’’
Fayetteville and Cumberland County approved incentives
Both the commissioners and the Fayetteville City Council have approved incentive packages for Project Aero/American Titanium Metal LLC, and those, too, are performance-based.
There is still not much information publicly available about the company. Teresa McBride is listed as chairman of the company. LeRoy Prichard, the head of its capital projects, has an extensive background in the metals industry, as I reported.
This seems like the kind of project that will make everyone look good and boost the community — if it can be pulled off. But can it?
When similar titanium dreams did not come off in South Carolina
The enthusiasm over the potential plant here mirrors a similar reaction in 2008 by South Carolina officials when a different titanium company named American Titanium Works Inc. eyed property in Laurens County. That plant, another mini-mill, was to bring 320 jobs and $422 million investment, according to a trade publication.
But the original plan was scuttled by the downturn in capital markets, ATW officials said in 2012; by then they were back with a new and similar plan, a local media outlet reported. That did not pan out, either, and after a third and final attempt in 2019, the company ultimately went bankrupt, according to CityView.
Such a scenario would not be ideal in Cumberland County, but it does not sound like we would be out any money if worse comes to worse.
Just time and energy. Those are important, too, however.
Opinion Editor Myron B. Pitts can be reached at [email protected] or 910-486-3559.
