MCRA mulling flooring plant deal
The Mingo County Redevelopment Authority is considering a proposal from a veneer manufacturing company that, if accepted, could ultimately result in that company purchasing the former Mohawk flooring plant and associated adjacent property at the James H. (Buck) Harless Wood Products Industrial Wood Park.During the MCRA’s regular meeting May 16, David Johnston, who is the CFO of Coldwater Veneer and who has operations in Michigan and Virginia, told the board that company owner Dean Calhoun has entered into an due diligence agreement with Mohawk Industries to buy the plant complex and its amenities already in-place. He said the agreement is to be completed in 60 days.Because Coldwater would also like to own the adjacent land outright, Johnston said the company would be willing to continue paying the MCRA the $10,000 (or possibly a renegotiated lower amount) a-month land lease agreement that Mohawk remains obligated to pay until Sept., 2020.Although Mohawk owns the plant complex and the stacking equipment which remains, the company leases the land on which the complex is situated as well as additional surrounding property, which altogether totals 44 acres owned by the MCRA.Johnston said once his company has completed the due diligence agreement with Mohawk, Coldwater could possibly agree to continue paying the remaining 16 months of the lease, or ideally a renegotiated lease at a lower payment, until the end of the current expiration date with one proviso: that Coldwater would then have the option to purchase the property in one final balloon payment at the end of the lease and that the 16 months of lease payments would be credited to the agreed upon final purchase price of the property.Because Coldwater is partnering with other companies in order to fully utilize the property — specifically a furniture manufacturer and a kiln operator — he said it becomes even more necessary for Coldwater to own and not lease the propertyIn addition, Johnston said, the three different operations would potentially create as many as 85 new jobs for the area.“As we have previously discussed, we want to make this as simple as we can,” he said. “As far as the purchase agreement (for the property), we would like a little breathing room to where we don’t have to come up with the whole amount up front.”
MCRA Executive Director Leasha Johnson and Board Chairman Paul Pinson agreed that the addition of jobs to replace the ones lost when Mohawk ceased operations has always been a major factor in the MCRA’s persistence to reestablish another company in that location.However, they also explained that the original purpose of a property lease rather than an outright sale was intended to provide a steady future source of income for the MCRA, which they pointed out, receives no outside funding from government agencies but is financially autonomous. Pinson additionally pointed out another hitch in Johnston’s proposal: In the event the MCRA does agree to the proposal, should the roughly $160,000 or a possibly less dollar amount that would be gained over the remaining 16 months of the lease agreement be credited toward the purchase price, it would leave the MCRA receiving substantially less money for the property than its original targeted price of around $900,000.Following further discussion, the board agreed to conduct a phone conference this past week so that the proposal could be more thoroughly discussed and a possible decision made as to whether to accept the proposal or if continued negotiations with Coldwater are warranted.