Submitted by Suanne Z. Thamm
Reporter – News Analyst
February 3, 2016 2:16 p.m.
Ending weeks of speculation, representatives of Rayonier Advanced Materials, Borregaard and the Nassau County Economic Development Board appeared before the Fernandina Beach City Commission (FBCC) at their February 2, 2016 Regular Meeting to present plans and answer questions about LignoTech Florida, LLC. Borregaard, the Norwegian company that would be the majority owner of the joint venture, was seeking reassurance that such an operation would be well received by local government and citizens alike. Sentiment among commissioners and citizens in attendance ranged from cautiously optimistic to highly enthusiastic.
A newly formed joint venture between Borregaard and Rayonier Advanced Materials, LignoTech Florida is evaluating the prospect of locating a facility for the advanced manufacturing of high purity, natural lignin-based products in Fernandina Beach on industrial property within the confines of the Rayonier facility on Gum Street. The project is expected to require $110-130M in capital investment and create approximately 50 high wage jobs.
Rayonier Advanced Materials is hosting an open house at their Gum Street plant on Friday, February 12 from 3:00-6:30 p.m. to give local citizens and elected officials an opportunity to speak to Borregaard and Rayonier officials with knowledge about both the scientific and business aspects of the operation. Additionally, the parties have agreed to provide written answers to questions posed by commissioners and citizens at the February 2 meeting prior to the open house.
If a final agreement is reached, Rayonier Advanced Materials will become a 45 percent owner in the joint venture with Borregaard owning the remaining 55 percent. The project is undergoing a comprehensive evaluation process before a final decision is made, including an economic analysis that will validate the viability of this project. State and local government assistance and incentives are critical to ensure that Fernandina Beach maintains an edge over competing locations. Another important factor that will influence Borregaard’s decision is community reaction. They want to locate this operation in a welcoming community and do not want to proceed if there is strong, vocal pushback from government or citizens.
In what was probably the first presentation of its kind, Borregaard’s corporate business development representative Anders Sjode spoke via Skype from Sarpsborg, Norway. He was joined by Jerry Gargulak, onsite business development representative from LignoTech USA; Mark Homans, manager of special projects for Rayonier Advanced Materials; and Laura DiBella, executive director of the Nassau County Economic Development Board.
The slide presentation focused on Borregaard as a global leader in biobased products, the nature of lignin, environmental impacts of the proposed project, jobs and business incentives.
Sjode explained that currently, Rayonier burns the lignin produced as a by-product of its industrial processes. Lignin, he explained, is the glue that makes trees stand up. It is used in industry as both a binding agent and a dispersing agent. It allows builders to use less cement and enhances the rechargeability of car batteries by a factor of ten. It is also used in agriculture in feeds. There is a growing market for this product in the Americas and Asia. Sjode said, “You can make anything out of this but money.”
Locating such a project adjacent to the Rayonier Advanced Materials plant would save Borregaard the expense of transporting the lignin off site. Meanwhile, Rayonier would stop burning lignin as fuel and convert to natural gas. The change over would remove air emissions equivalent to 500,000 cars. By removing sulfur dioxide from the air, the distinct odor of rotten eggs would also disappear. Sjode confirmed that the joint venture would only process lignin produced on site and not import lignin from other mills. There would be no additional toxic chemicals used on site beyond those Rayonier already uses. The end product would be transported to ports in Jacksonville or Savannah for shipment and storage.
The facility, which would not be a tall structure, would be located on land immediately to the south of the current Rayonier plant where some warehouses currently exist. All raw materials are already on site.
Rayonier representative Mark Homans added that this would not involve an expansion of the Rayonier plant. If the project is greenlighted, Rayonier will extend an existing rail line south and redevelop a road on property to connect to the new LignoTech plant. He said that the parties are working with the Florida Department of Environmental Protection and the city of Fernandina Beach to assure that all permit requirements are met. He also said that adding this operation to the Rayonier site is consistent with the company policy promoting asset optimization.
Laura DiBella addressed incentive options available for the joint venture. Eighty percent of the options would be covered by the state of Florida, with 20 percent left to local government. The Qualified Industry Tax Refund (QTI) is available to companies that create high value-added industries. The local cost share is $20,500 annually to occur between 2019-2022. That cost would be split between the county and the city. The state provides certain tax breaks if the company creates jobs that pay at or in excess of 150% of the average annual wage in Nassau County. The starting salary without benefits for the new jobs would be $54,000 and therefore meet that requirement.
Another incentive program, known as the Road Fund, would provide up to $3M to fund the anticipated road improvements and new rail spur. There is also a local economic development grant available to new industries that create at least 10 new jobs, add to the tax base and/or make a significant investment in the community. Under this program, the joint venture would not pay ad valorem taxes in its first year. Their 100 percent refund would be reduced to 20 percent over five years.
Other incentives and grants are also being pursued at this time. Eight citizens joined city commissioners in asking questions about the proposal, ranging from compliance with the city’s Comprehensive Plan to impacts on the aquifer and the tourism industry. While citizens seemed generally pleased about the positive environmental implications (reduced emissions, less pollution, no noise), a couple people expressed opposition to tax incentives. An uptick in truck traffic was also viewed with some concern. There was also some skepticism from speakers who felt that the project sounded too good to be true.
Medardo Monzon, a local citizen who has worked as a chemist in industry, said that he was impressed by the care taken by Nordic countries to protect the environment and promote sustainability. He said that the open house would be helpful to the public in better understanding the plans and processes. He questioned the need for tax incentives. He called the project “a beautiful joint venture.”
Michael Harrison, an engineer, said that he was favorably disposed toward the project and saw no “show stoppers” in the audience questions.
Environmental activist Julie Ferreira expressed concerns about depleting the aquifer and the potential for saltwater intrusion in addition to possible noise from the new plant.
City commissioners, who had met individually with project representatives in advance of the meeting, seemed positive about the project. Commissioner Len Kreger reminded people that by switching to natural gas as a fuel, Rayonier Advanced Materials would be paying more franchise fees into city coffers. He asked that the city’s finance staff review the plans and asked that the Comprehensive Plan issues be addressed. Commissioner Roy Smith asked about the new venture’s water use. He was informed that the plant’s use of water would be significantly lower than that of Rayonier.
Vice Mayor Robin Lentz told the audience that while the city would not immediately reap full tax benefits, it would over time. She also verified that clawbacks exist to insure that the venture lives up to its commitments.
Mayor Johnny Miller asked a series of questions that had been forwarded to him and invited citizens to submit even more. Responding on behalf of Borregaard, Sjode said that lignin is not a hazardous material and that there would be no noise emanating from the new plant.
Commissioner Tim Poynter said that he was excited about the prospect of adding a clean industry to the city’s tax base. He added that he was pleased to be able to also help a local industry—Rayonier Advanced Materials. In responding to concerns about tourism, Poynter said that he appreciates the diversity in our local economy, adding that he does not want Fernandina Beach to become a Hilton Head—a community mainly dependent on tourism. Lentz concurred, saying, “A diverse economy sustains us.” Miller said, “I can’t think of anything that’s been said today that is not good. We are not against industry; we are just against dirty industry.”
In response to City Attorney Tammi Bach’s request for guidance from the commission, Lentz asked that the project be placed on the agenda for action at the February 16 meeting. Bach said that formal action may be taken in the form of a resolution that endorses the project and designates the Nassau County Economic Development Board as the responsible party for ensuring compliance with state established benchmarks.
Bach indicated that the city would address Comprehensive Plan concerns in the resolution and that the city would perform a cost benefit analysis.
After some discussion, Poynter asked that the parties provide written answers to all the questions raised by the commissioners and citizens before the February 12 open house.
Should local government and Borregaard’s directors both approve the project, Phase I construction could begin in the second quarter of 2016. Phase I production would begin in the first quarter of 2018. Phase II would begin in 2021 and go online the following year.
Anders Sjode expressed a strong desire to locate in Fernandina Beach. However, he was very clear that positive community reaction was important. “If there is massive resistance,” he said, “it would be difficult to sell the project to the board.”
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.
Mr Sjode was not very transparent when asked serous questions about how his operation would affect our community. He also made many veiled threats or not so veiled threats to take his marbles and go home. Modardo Monzon said it best when he said it wasn’t very neighborly for a Norwegian company to be coming into our community with their hands outstretched looking for handouts and tax abatements. That was about the best statement made all night. Medardo also challenged Anders Sjode to withdraw his funding requests when we as a city have so many issues with tightening budgets and problems covering our pension plans, etc. The slide of the expanding arc of future revenues the city will be receiving could be put on the page of buyer beware- a nice visual with no figures- especially since Rayonier doesn’t pay much in property taxes and neither will they. So where’s all that future revenue coming from?
Rayonier currently pays more than $200,000 in property taxes for its mill property. I don’t think I would call that “doesn’t pay much”. I do think there needs to be a full vetting of the business proposition. It certainly does seem to be an overall positive mood, but the tax incentives are always a tricky one.
I want to watch the video of the meeting but the article states “that the plant’s use of water would be significantly lower than that of Rayonier”. Is LignoTech going to be able to pull its water from Rayonier’s wells and their quota or where will it come from?
At the walkthrough I was told Lignotech will buy their water from Rayonier. A bit of a rip off for them since Rayonier uses 15 million gallons a day but pays nothing to draw down the aquifier.
I think the water use issue is critical and must be answered.
How does Rayonier get converted to natural gas? Is this already available to them or do they have to establish a pipeline? Will they bring it in as LNG? If yes to LNG – is this how we got to parts of the port planning?
They will get the Natural Gas from the 8 Flags Co Generation Plant being build adjacent to the mill.
Raynonier wants something, they get something. If not, they flood the town hall meetings with their loyal employee robots who bully the locals out of the room so no one can interfere with their agenda. Never try to debate a Raynonier supporter, they are blind to the real issues. The subject of heavier truck traffic came up, answer was vague at best, slightly more traffic. Yeah, right!
One thing I did notice, all these Raynonier lovers on the island swear the plant doesn’t pollute, but read between the lines in this story to see the truth. I quote, “Meanwhile, Rayonier would stop burning lignin as fuel and convert to natural gas. The change over would remove air emissions equivalent to 500,000 cars. ” That means currently they are pumping way more than 500,000 cars worth of toxic pollutants into the air around the island. Somehow the mill lovers will explain that away because these idiots bring jobs here. Yes, at what ultimate expense.
Expect me and others to stand up to the bullies at Raynonier. This time, they are not getting what they want.
Interesting timing this Rayonier/Lignin mess coming as the city is determining how to improve 8th Street. The city’s goal “to create a vibrant and welcoming mixed-use corridor with unified attractive visual character that serves as a gateway and connects to the history and character of Downtown Fernandina Beach.”
Why bother?
When Rayonier is finished using us like a tool, there won’t be any history and character left in Downtown Fernandina Beach.
I suppose it won’t be a complete waste, there will be more truck drivers to enjoy the attractive corridor
Our new Mayor Miller seemed absolutely ga-ga as Rayonier pulled the wool over his eyes yet again. Promising things that they know appeal to to mayor, while avoiding issues like increased truck traffic, increased water usage, and destruction of the natural landscape again. Rayonier has a loyal zombie base of employees/family member who will fight anyone to the death if you oppose any of their actions. Johnny had that glazed over look in his eyes like this was already a done deal.
He doesn’t have the backbone to stand up to the mills and they know it. If they want something, they threaten the residents by saying they will take away jobs, revenue, and tax money, but they forget to mention they will take away all that 500,000 cars worth of toxic pollution they pump into the air day after day. If the residents do not wake up from the fog this island will become an industrial island as they push the residents to Yulee and continue their expansion plans uninterrupted.
Do you think the widening of A1A years before this plant being built is a coincidence? This is a done deal and they need to widen the roads to gets those big trucks to the island in larger numbers. Rayonier is not concerned about the residents or the island, they will deplete this area of natural resources and be on to the next. Wait until that plant is built and the promise of it not being that tall becomes part of the eyesore you see coming over the bridge. These bullies need to be stopped before they have a stranglehold on the island.
The water may be an issue not only for the residents, but for WestRock also. When the salt intrudes, they will also be gone. The Port (OHPA) has already been looking into desalinization barges. As far as air quality, the citizens get many promises. When mills get out of compliance they get fined. It takes the DEP a while to catch up with them. With the tax incentives agreement, it would be interesting to attach a caveat that mandates “fence line” air quality monitoring. Recently environmental organizations have been winning lawsuits over air quality issues. EPA has been coming out with new air quality requirements as a result. “Fence line” air quality monitoring not only protects citizens, but industry also. If LignoTech pays for the equipment, and the City or groups monitor the results, LignoTech would be putting its money where its mouth is. We all want to be good neighbors. Promises are promises, but no one wants to hold anyone’s feet to the fire. Any future mill air violations could be avoided much more quickly with monitoring devices at their fence lines.
I am a retired paper industry professional living near 14th street in Fernandina Beach. I find this new venture a great value to our community. Processed lignin is now being processed to make carbon fiber that is used to make many many new products. This is a technical break thorough that will help all of us and has only positive effects for Amelia Island. A valuable product made from “wood lignin” and natural gas replacing it’s burning is positive the environment.
I will send to the editor an article about the carbon fiber technology based on lignin for their future use.
We can use the good paying jobs. Incentives for locating here? Why not? They will bring value, jobs, tax income and long term use of our local asset … pine trees grown on farms in North Florida.
Welcome Borregaard!!
Once again, anyone associated to the mills is 100% for anything mill related with blind ambition. John, in case you missed, why do you and the mill representatives continue to skirt the issues the residents are concerned about and constantly talk ONLY about increased jobs and tax revenue?
Once again, we asked about increased truck traffic, no comment.
Once again, we asked about past pollution concerns. no comment.
Asked about height of new plant, told not too big!!!!
Seriously. When you, the robots at the mills, and all those blind supporters begin to address issues we CARE about, then we take you serious and consider you a good neighbor. Until then, the mill is and will always be the big bully on the block who wants everything and gives nothing. Oh wait, they do donate $5,000 once in a while to a charity. Sickening. John, you are exactly like the Rayoneir bullies that flood the meetings to get things passed in their favor and never want to discuss anything that casts the mill in a bad light.
Times are going to be changing. The mills are not going to be the bullies much longer.
As a fairly new resident to Amelia Island, I too, am concerned with the projected increase in traffic, pollution, and the lack of good sense of our city planners in allowing the wool to be pulled over their eyes. While this may be a good thing for Ligno Tech, it really isn’t going to be creating that many jobs in our community. I understand that this company will work in conjunction with Rayonier, but I feel that Amelia Island shouldn’t become more industrialized. This will definitely take away from the historic charm for which Amelia Island is known. Borregaard’s Corporate Business Development should look to Yulee for it’s land. That way the increased traffic would not logjam island traffic and all of the future problems would belong to Yulee city planners. Our city leaders need to be mindful and WELL EDUCATED in what Amelia Island residents want in order to make and keep our island beautiful. I believe that this kind of business is not it! After all, this company is asking for too much without giving much in return. This is a bad plan.