Little tax benefit from Enviva until 2015
Published 8:53 am Friday, January 6, 2012
COURTLAND—It appears Southampton County will see little tax benefit from the construction of a wood pellet plant at the Turner Tract industrial park until 2015.
“I think the citizens in the county think the jobs will be here as soon as they announce there will be jobs and tax revenue, and expect that miracles are going to happen overnight,” said Newsoms District Supervisor Glenn Updike. “That’s not the case.”
“They expect us to balance the budget on revenue we’re not going to get,” Updike added.
County Administrator Mike Johnson said Thursday he expects it will take Enviva about a year to get its air emissions permit for its $75 million plant off Rose Valley Road; an estimated 18 months for construction will follow.
Real estate taxes can be levied on the land once the sale is completed, but the brunt of the taxes on the buildings cannot be levied until the December after the occupancy permit is issued. It’s likely taxes will not be levied until December 2014, meaning taxes will be collected in late 2015.
The annual deadline for paying real estate and personal property taxes is Dec. 5, said Treasurer David Britt.
At the current rate, Enviva would pay $77,000 in real estate taxes annually.
The county cannot levy the machinery and tools tax until the plant, which will employ 65, begins operating. At the current tax rate, Enviva will pay $1.25 million the first year in machinery and tools tax.
However, Enviva also will be rebated $1.96 million in machinery and tools taxes over five years, or 42 percent. The county made the agreement to match $300,000 provided by Gov. Bob McDonnell.
Enviva will receive $6 million to $7 million in local, state and federal funding for the project.
Johnson said he also anticipates that Enviva will not close on the purchase of the 120 acres at the Turner Tract for $1.3 million until it has its air emission permit.
“It could be later in the year, but I can’t speak for the company,” he said.
Elizabeth Woodworth, director of marketing and communications for Enviva in Bethesda, Md., said it could take up to a year to get the air emissions permit, and construction would follow. The time line is 12 months for construction.
“Our permitting took very little time in North Carolina,” Woodworth said. “It took about 60 days.”
Enviva in November opened a wood pellet plant in Ahoskie at the former Georgia Pacific location.
“We haven’t built from the ground up, or in Virginia yet,” she said.
“It takes time to get one of those permitted and built,” Johnson added.
He noted that during construction, the county would benefit from any materials, supplies, meals and other items purchased in the county.
“One percent of the sales tax comes to the county,” Johnson said.
Updike isn’t so sure the Turner Tract, which cost $17 million to develop, was the best place for Enviva.
“It limits our future (for the industrial park’s continued development),” he said. “Who wants to be beside the noise, odor and traffic (of a wood pellet facility)?”
“I would love to see the company come in, but I think to get the business we sold our soul,” Updike added.
Enviva will not pay the county anything for the property the first two years and follow with five annual payments of $260,000. The county will charge no interest.