AEDC on Nordex: 'This Did Not Catch Us By Surprise'

by Luke Jones  on Friday, Jun. 28, 2013 10:00 am  

AEDC says it is working with Nordex on what to do with leftover incentive money (Photo by Shutterstock)

A spokesman for the Arkansas Economic Development Commission said Friday that the end of production at the Nordex USA facility in Jonesboro "did not catch us by surprise," and that the wind energy company was working with the AEDC on what would happen to millions of dollars in incentives for the plant.

"We've been having discussions with them," Joe Holmes, director of marketing and communications for the AEDC, told Arkansas Business. "They've been a very, very upright company. Unfortunately, like what the news release says, things just haven't worked out with the production tax credit the way people thought it was going to, as well as the other market conditions they mentioned."

Mark Young, president and CEO of the Jonesboro Regional Chamber of Commerce, also said the company had been up front with him about the state of the industry.

"They have been in contact with us to discuss the challenges within their industry," he said. "And they've communicated with us regarding this facility's future as well."

The AEDC used incentives to attract Nordex to Arkansas in 2008. The Governor's Quick-Action Closing Fund provided Nordex with $8 million, including $6 million for training and site preparation. But Nordex had only spent $2.5 million.

The other $2 million of the $8 million was intended for Jonesboro to improve rail and road access; so far, the city has spent about $1.3 million.

Nordex had also been given an $11 million bond guaranty from AEDC and the Arkansas Development Finance Authority. Holmes said the company still owed about $9.3 million and had been making its payments "like clockwork" and would continue paying them.

Finally, a "Create Rebate" has been giving Nordex a 5 percent cash rebate on the payroll of new jobs created. The company had received one check for about $263,000, Holmes said, which has been returned to the state.

"They didn't cash it," Holmes said. "They didn't expect to with some of the market conditions that had been going on at the time."

Now the AEDC is working with Nordex on what to do with leftover incentive money.

"We do have clawbacks in place," Holmes said. "We'll be working with the company over the coming weeks to work something out with that. There are formulas based on employment levels and wage levels, on how long they were able to keep folks employed."

Holmes said Nordex employed about 100 in Jonesboro at its peak, far short of the 750 the company estimated to reach over time.

 

 

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