Biofuel seeks new JOBZ?deal
FAIRMONT – When Biofuel Energy Corp decided to build an ethanol plant on the outskirts of Fairmont, the company agreed to invest a certain dollar amount in the facility and employ a certain number of workers in exchange for a tax break through the state’s JOBZ program.
The JOBZ agreement, signed in 2006, stipulates Biofuel must invest $100 million in the facility, employ 40 workers, and pay them $9 to $15 [er hour.
“Just looking at the subsidy agreement, they’ve over-performed,” said Fairmont city administrator Mike Humpal.
Biofuel spent $169 million on the plant and employed as many as 60 people, paying them $13 to $71 per hour.
But the high price of corn, a widespread drought and an ethanol surplus were a devastating combo for the industry. The plant idled operations in September, and in February, 36 workers were cut.
Businesses unable to meet JOBZ requirements are offered two options by the state Department of Revenue: to drop out of the program and start paying their full taxes, or to seek an amendment to the agreement. Biofuel chose the latter.
“We propose to amend our agreement to require that we maintain a minimum of 10 full-time employees for the remainder of 2013. We have been and will continue to be in compliance with all of the other conditions contained in the agreement,” wrote Doug Anderson, executive vice president and chief operating officer, in a letter to Humpal.
Also in the letter, Anderson said he expects the plant to remain idle until this year’s harvest season.
On Monday, Fairmont Economic Development Authority voted unanimously to recommend the City Council approve an amendment to the JOBZ agreement.
“Do you kick them when they’re down? I don’t think that gets us to our end goal,” Humpal said.
The end goal for the city is for Biofuel to make ethanol again.
Even with the JOBZ agreement, Biofuel is one of the top property taxpayers in Fairmont, since only 65 of the 200 acres it owns are tax-exempt.
Exactly how much the company pays in taxes to the city was not available Monday evening, since the county Assessor’s Office was closed for the night. However, the market value of the property gives some indication how much Biofuel’s taxes will increase when its JOBZ agreement expires in 2015. The facility’s market value is $24 million, but with the tax break, it is paying taxes on only $5 million of that value.
Besides the additional taxes that could someday pour into the city’s coffers from Biofuel, Humpal pointed out that the plant is also a boon for the area’s farm economy.
At full capacity, the facility is capable of producing 110 million gallons of ethanol per year, using 41 million bushels of corn in the process.