Submitted by Suanne Z. Thamm
Reporter – News Analyst
March 2, 2016 1:54 p.m.
At its March 1, 2016 Regular Meeting, the Fernandina Beach City Commission (FBCC) took two more steps forward with respect to supporting the addition of a new industry—Florida LignoTech. They unanimously approved an incentive package that included a limited tax reduction and the endorsement of a grant application on behalf of the company. While commissioners emphasized that by approving these measures they meant to convey their overall approval for the new industry, they understood that there are still matters to resolve before construction can begin. Two local citizens spoke on the matter: Medardo Monzon endorsed the project, citing positive impacts on the environment and the local economy, while Chip Ross opposed it on the grounds of economic incentives and onsite storage of hazardous materials.
LignoTech Florida, LLC is the entity established through a joint venture between Rayonier Advanced Materials, Inc., and Borregaard ASA (45 percent ownership and 55 percent ownership, respectively) for the purpose of engaging in the advanced manufacturing of high purity, natural lignin-based products at the Fernandina Beach facility. If, following the completion of a detailed engineering phase, a final decision is made to proceed with the project, the project is expected to require an estimated $110M in capital investment and create an estimated 50 high-wage jobs in Nassau County.
Qualified Target Industry Tax Refund (Resolution 2016-31)
LignoTech Florida LLC has been identified as a Qualified Target Industry Business and falls within one of the high-impact sectors designated under Section 288.108 Florida Statutes, specifically advanced manufacturing. Pursuant to provisions of Section 288.106 Florida Statutes, twenty percent of the total tax refund allowed by the state as an economic incentive is required to come from “local financial support.” The intent is for the City of Fernandina Beach and Nassau County to share that twenty percent, which totals $90,000 over four years. The local financial support is in the form of ad valorem tax refunds in the amount of $11,250 from both the city and the county for tax years 2019 through 2022.
City Attorney Tammi Bach advised the FBCC that Nassau County would follow the city’s lead on this matter. In response to a request for clarification from Vice Mayor Robin Lentz, Bach explained that by law this is the only tax refund the city could provide.
Commissioner Len Kreger admitted to some confusion in voting on this matter, since the city had not yet voted to indicate they want LignoTech to be in the city. He cited FBCC consensus to proceed, but expressed his opinion that the FBCC needed to expressly state that they want this industry in the city. After some discussion, Commissioner Tim Poynter framed a motion that Vice Mayor Lentz seconded to support the addition of LignoTech Florida to the Rayonier Advanced Materials campus in the city of Fernandina Beach and approving Resolution 2016-31. The Resolution passed unanimously.
City Attorney Bach emphasized that the LignoTech project is a proposed project. The corporate sponsors will vote in May on their desire to bring the project to Fernandina Beach. She said that the votes taken on matters this evening are only steps in the recruitment process.
Economic Development Transportation Fund Grant Application – LignoTech Florida, LLC Development (Resolution 2016-32)
Pursuant to Section 339.2821 Florida Statutes, the Florida Department of Transportation (FDOT) in consultation with the Department of Economic Opportunity (DEO) and Enterprise Florida, Inc., may make and approve expenditures and contract with the city for the direct costs of transportation projects such as those proposed by LignoTech that FDOT deems necessary to facilitate the economic development and growth of the state. The Nassau County Economic Development Board (NCEDB) and LignoTech have requested that the FBCC agree to be the governmental body that applies to FDOT for transportation grant funding to design, construct and maintain transportation facilities, including a road and rail spur to support the proposed industrial project.
In approving this resolution, the FBCC agreed to serve as the local governing body that will make application to FDOT for a transportation project estimated to cost $3,138,000. FDOT may fund all, some or none of the project costs included in the application. If the FDOT grant were awarded to the city, the FBCC would enter into a separate future agreement with LignoTech to formalize how the city would manage any grant funds received. The city will not be expending any public funds or tax dollars to complete the transportation facilities for LignoTech Florida, LLC.
City Attorney Bach indicated that the city has had an independent engineer verify the amounts needed for projects outlined as grant targets. She added that as the city currently understands it, there is no money in the state fund to be awarded, but that FDOT has advised the city to submit application in case the State Legislature decides to put resources into the grant fund.
Pre Meeting Workshop – Medardo Monzon
With the permission of the Fernandina Beach City Commission (FBCC) local resident Medardo Monzon delivered a presentation entitled “An Independent Assessment of LignoTech Impact on Amelia Island” during a workshop immediately preceding the FBCC meeting on March 1, 2016. Monzon, a degreed chemist with international experience in the field of petrochemicals, had requested workshops both with the city commission and the Nassau County Board of County Commissioners in order to deliver an independent assessment, focused on facts, regarding the science of the LignoTech process proposed as a complementary industry on the Rayonier Advanced Materials (RAM) site in Fernandina Beach.
Explaining his educational credentials, the fact that he holds a patent, and his 30 years of work experience in the field of chemistry, Monzon also cited his management experience, saying, “I know what it’s like to be responsible for people and jobs.” Monzon’s purpose in making his public presentation was to dispel misinformation and calm fears that have been circulating in the community over the addition of a new industry to the island’s industrial mix. (To view Monzon’s 20 minute-presentation in its entirety, visit the city’s website fbfl.us and click on the appropriate link under Live Commission Videos.)
Monzon offered a detailed, scientific explanation of RAM’s industrial process that leads to the production of lignin as a byproduct. Currently the lignin is burned as fuel at the plant. With the diversion of the byproduct to the Florida LignoTech operation, RAM will convert to natural gas, meaning that carbon dioxide and other emissions will be dramatically reduced. Monzon did his own calculations of emission savings and estimated that the introduction of the new industrial process will cut carbon dioxide emissions by 61,800 MTPY, or 130 million pounds of emissions. “Simply put,” he said, “the LignoTech project offers our community the best opportunity to SIGNIFICANTLY reduce carbon dioxide, sulfur dioxide and other emissions. The positive environmental impact of the project has a solid scientific foundation.”
Monzon lauded Rayonier Advanced Materials, Borregaard, and LignoTech USA for their transparency in responding to his information requests and in offering the community the opportunity to talk with plant personnel and scientists during the recent RAM open house. He said that they deserve lots of credit for their willingness to address concerns of the local community.
Chip Ross’ opposition to Resolutions under consideration
“I continue to have doubts about any industrial operation built in a flood plain, a filled marsh, abutting an urban population,” PAB member and anti-port activist Chip Ross declared as he began addressing the FBCC for six minutes during their consideration of the two incentive items. He raised concerns about the proposed LignoTech project, questioning the need to approve economic incentives and claiming that granting a building permit to LignoTech would appear to violate the city’s Comprehensive (Comp) Plan.
Ross presented the executive compensation tables for both Rayonier and Borregaard. He opined that with such high executive compensation levels, the corporations did not need economic incentives. He also claimed that because the new plant would be located in the Amelia River flood plain, storing hazardous materials on site would not be allowed under the city’s Comp Plan. He further indicated that he had not received answers to some of the questions that he had submitted to the industries.
City Attorney Tammi Bach reminded Ross and the commissioners that the actions before the commission currently related only to economic incentives and did not address building permits
Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.