MCRA gains ownership of wood manufacturing plant
After more than two months of negotiations, the Mingo County Redevelopment Authority has gained ownership of the wood manufacturing plant at the James H. “Buck” Harless Wood Products Industrial Park at Holden as the result of a mutual agreement with the plant’s owner, Mohawk Industries.
That word came Tuesday during the MCRA’s regular board meeting.
MCRA Executive Director Leasha Johnson said the deal struck on Nov. 19 between Mohawk and the MCRA entailed the plant complex, which Mohawk owned, being conveyed to the Redevelopment Authority in exchange for the termination of the company’s remaining 10 months on the land lease.
She said the lease would have continued to be effective until Sept. 2020 and would have amounted to around $100,000 in remaining lease payments to the MCRA.
Because Mohawk had been unsuccessful in its attempts to sell the building and remaining equipment during the little more than two years since it ceased operations, wood manufacturer officials approached the MCRA in September indicating that their company might be interested in conveying the building and its assets to the MCRA provided some kind of abatement of the lease payments could be worked out.
Although the MCRA would have assumed the plant complex at the end of the lease anyway should Mohawk have failed to sell it to another company, MCRA officials said to not at least explore the possibility of accepting Mohawk’s offer would place the Authority in a disadvantage due to the holding costs it would incur while Mohawk waited for the lease to expire.
Another disadvantage by not acquiring the plant immediately, the board additionally concluded, would be the buildings and remaining equipment in the meantime would continue to sit vacant/idle and deteriorate while the MCRA searched for another occupant.
Deputy Executive Director Greta Curry said an additional bonus with last month’s acquisition were approximately 800,000 stacking sticks used to stack and dry out green wood as well as the stacking equipment itself.
Johnson said WV Forestry Chief Barry Cook recently contacted the MCRA and said a West Virginia lumber company, whom he did not identify, approached him about possibly purchasing the remaining stacking sticks and equipment.
Cook said the company made a tentative offer of $100,000 for both, which board member James Simpkins pointed out that this amount by itself would more than make up for the loss of the remaining lease payments.
After researching the value of both items, however, Simpkins said a fair price for the stacking equipment itself would be $100,000. He said an equitable price for the stacking sticks would be at least 40 percent or about $.32 of the $.80 it costs to purchase one new stacking stick, or around $250,000 for the lot.
He said the combined market value of the equipment and stacking sticks would total approximately $350,000.
But because the MCRA would be responsible for the care of the equipment and stacking sticks in the meantime, as well as responsible for the actual marketing, loading and shipping of the items should a buyer eventually be located, Simpkins suggested that the MCRA make a firm counteroffer of $250,000 for the package and see if that dollar amount is accepted by the interested company.
Aside from making the counteroffer with the stipulation that the buyer would be responsible for the onsite loading and shipping, to which he and the rest of board agreed, Brandon Sammons asked if it would be in the MCRA’s best interest to additionally still seek out other potential buyers in order to get the actual value of both equipment and stacking sticks.
Simpkins said it would be well worth the MCRA’s time and effort to try to find other buyers, but quickly added it might be difficult to find such a buyer due to the wood manufacturing and sawmill industries currently being depressed as well as currently experiencing fewer numbers.
Following further discussion, the board voted to make the company a counteroffer of a firm price of $250,000 for both stacking sticks and equipment.
The board also agreed to seek out other potential buyers in the interim.