Suwannee Democrat

May 1, 2013

Candid about Klausner

Wainwright talks about sawmill, plans

Andrew McGee
Suwannee Democrat

Branford — Suwannee County Commissioner of District 5 Wesley Wainwright spoke recently in Branford on the latest with the catalyst site.

He then moved on to do a quick re-cap of the Klausner project and where it was presently. Originally, when Klausner had their eye on the catalyst site, they hired a separate company to do soil borings prior to Suwannee County having borings done.

“Amazingly, the clay out there ran like marble,” said Wainwright. “Just veins. Looking back, there was no way we could have determined the extent of what we would find out there.”

He said Suwannee County had the best location in the state, but the worst soil.

“There began our nightmare,” said Wainwright. “We ended up with what we thought was going to be a $1.7 million project to site clear for Klausner. It ended up being nearly four (million dollars).”

Wainwright said this didn’t include the purchase of the land. He gave a special thanks to Suwannee County Administrator Randy Harris for feverishly working to get grants for the project and for those in Tallahassee that have also been helping to make it work.

“It is bad that we have that much money invested in it, but we’re past all that,” said Wainwright. “I will say that I try and encourage people because I still have a lot of them that are so negative about what’s going on out there.”

He said like it or not, we are still a community and we are invested in it.

“We need them (Klausner) to be successful to get that return,” said Wainwright. “Realizing that, some months back, I told them, I’ll do whatever it takes to help promote Klausner.”

Wainwright said all the issues with the site were corrected and that Klausner’s engineers came in as well as their contractor, and he conducted his preliminary surveys.

Klausner went as far as to hire a company that had capabilities to do sonar tests on the site to ensure Suwannee County had “lived up to its end of the bargain” about soil densities so that they would be able to run their heavy equipment.

“Everything is checking out fine and going great in that area,” said Wainwright.

He paused for a moment and said, “Klausner all along has encouraged us and that they would promote and try to bring other companies in with them, to co-locate with them.”

He said to date, Klausner is trying to get a pallet mill and pellet mill to come build their companies at the site. The negotiations have been going on for months, according to Wainwright.

“The pallet people came in to look at everything out there,” said Wainwright. “Klausner already met with the gas company and secured everything they need to do to make sure they get that gas utility to the site.”

Wainwright said they’re currently meeting with Suwannee Valley Electric Cooperative to make sure everything is “on board” with getting their sub-station built and their electrical needs in order. The same day of the meeting, Klausner was meeting with the “pellet mill” folks.

“Both of these companies would need rail (railroad) to get their product over to Jacksonville just like Klausner plans to do. Hopefully, it’s going to start growing in the direction that we would really like to see and bring more jobs and industry to invest into our community,” said Wainwright.

EB5 program

Wainwright, as chairman of the BOCC, traveled to China with Klausner’s Thomas Mende.

“Mende wanted me to go to China with him to work at recruiting investors in the company through our federal government what they call the EB5 program,” said Wainwright. “The EB5 (Investor Visa) program allows a foreign investor to invest in 10 new jobs in America. They receive a half of a million dollars, get a green card and a fast track to citizenship if all the security stuff checks out, in five years they could be eligible for citizenship.”

He said outside of the EB5 process in a normal situation, they would have to invest $1 million and it would take 10 to 12 years to go through the citizenship process. Wainwright said out of the 12 days in China, they spent eight days attending seminars and conventions speaking to groups of potential investors.

He said in China, the customs and immigration services uses an independent analyst to evaluate projects in the U.S. and will classify how many jobs they determine may come from those projects. He said they count direct, indirect and induced jobs and the form they used concluded that there were 990 jobs associated with the Klausner project.

“So, the company could conceivably recruit 99 investors, one investor per 10 new jobs in America at half a million dollars a piece,” said Wainwright. “That’s about $50 million that they could use in this investment process.”

Still signing checks?

“Is the county finished spending with the Klausner project?” asked Rotarian John Lacquey.

There was a long pause.

“Everything we’re going to do from here on out is going be with grants that are going to be reimbursed,” said Wainwright. “We’ll spend the money and we’ll get it back.”

“When the dust settles, how much has Suwannee County spent that we’re not going to get back?” asked Lacquey.

“Counting the land, about $6 million,” said Wainwright. “That’s over the course of about four years.”

Then there was the question of whether the county was contemplating purchasing even more land.

“We had made an offer several months ago, the bank counter-offered and it’s way too high,” said Wainwright. “Even if they come back down on the price, there is no way that I could support incurring debt and pay debt services.”

Wainwright said he has been talking with Columbia and Hamilton counties.

“They want to participate and invest to buy the land,” said Wainwright. “They’ll get a percentage of ad valorem revenues down the road.”

He said they would be willing to do this only if the price of the land could be negotiated back down to a reasonable level. If the several county officials and the bank couldn’t come to an agreement, then there was another option.

“I’ve encouraged the pellet mill, for them to buy the land,” said Wainwright. “With them doing that, they won’t be eligible for grants through the county. Only the county can get the grants.”

Wainwright’s proposal was that the mill purchase the land with their money. Once the grants have come through and the infrastructure is in place, Suwannee County would then reimburse the mill, or, as Wainwright said, “Give it back to them for a dollar.”