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The state gubernatorial candidate’s highly touted economic development projects are lagging.
Thursday, May 9, 2013
FRANKLIN — Terry McAuliffe figured his business background would be an asset in his second run for governor, but he has found himself explaining why two commercial ventures he proposed in Virginia haven’t lived up to the lofty expectations he set.
Questions about why his electric-car company, GreenTech Automotive, placed its plant in Mississippi rather than Virginia, are being followed by more, about a slowly developing local green-energy proposal here.
It’s been at least three years since McAuliffe, a Democrat, began publicly speaking about a renewable-energy reuse project for the once-shuttered International Paper Co. plant in Franklin.
Since then, McAuliffe and his business associates say, the parties involved in the Franklin Pellets project have been engaged in talks with state and local economic development officials to get a deal done.
They point to a contract signed last fall with the Virginia Port Authority for a 20-year lease with ecoFuels Pellet Storage LLC for a 13-acre parcel at Portsmouth Marine Terminal.
That was envisioned as a storage facility for manufactured wood pellets destined for Europe.
The long-term plan is to produce wood pellets used by power plants in the energy generation process on site at the former paper mill.
But as of now, the port lease is one of the few official signs of activity related to Franklin Pellets, which McAuliffe two years ago predicted would provide 200 to 300 jobs in the region.
“In an innovative company like ecoFuels, there are a lot of moving parts that need to be managed and often take more time than expected,” McAuliffe said.
“That’s the reality of an entrepreneurial company.”
The Democrat’s allies offer a similar defense: Economic development deals take time, especially when they involve sign-off from state and local officials, not to mention private sector partners.
McAuliffe’s Republican critics aren’t as charitable. Scrutiny of McAuliffe’s business affairs is welcomed by his Republican rival, Attorney General Ken Cuccinelli, whose campaign and surrogates have worked to exploit every headline.
When McAuliffe last month revealed that he resigned from GreenTech in December without publicly acknowledging it for months, Cuccinelli said that it “completely invalidates the central premise of his candidacy.”
Running on the “Putting Jobs First” slogan, McAuliffe has spent considerable time traveling in Virginia since his 2009 gubernatorial primary election defeat, building support for a repeat bid while looking for business opportunities.
He co-founded Northern Virginia-based GreenTech in 2010 with plans to manufacture MyCar electric vehicles domestically, creating 2,000 jobs at full capacity.
However, the company’s discussions with the Virginia Economic Development Partnership fizzled, and Mississippi landed GreenTech after that state pledged a $3 million loan and other incentives.
The company has until the end of 2014 to create 350 jobs and invest $60 million at its Tunica County plant under that deal.
GreenTech now has about 100 employees.
McAuliffe initially said the Mississippi move was related to soft interest from Virginia, a claim contradicted by records showing that economic development officials had reservations but were considering the idea.
Among the concerns cited in emails obtained through an open-records request was the planned use of the federal EB-5 investor program to raise foreign capital for the project in exchange for immigration visas.
Defending McAuliffe, Republican Lt. Gov. Bill Bolling said criticism of the GreenTech move is unfair because Mississippi offered an incentive package that Virginia was unlikely to match.
“You can’t fault them for that,” said Bolling, who withdrew from the governor’s race in November.
“I think most companies in a similar circumstance would have done the same thing.”
Although a match wasn’t made with GreenTech, a deal on Franklin Pellets remains in the works. The project is a joint venture between two companies McAuliffe has ties to — ecoFuels and Capital Management International — as well as Houston-based multiFuels LP.
Isle of Wight economic development officials and their state counterparts acknowledge that Franklin Pellets talks are ongoing but won’t say much else publicly because of the status of the negotiations.
State officials said they are working on the project, “which we believe could have a positive economic impact for the Commonwealth,” in a letter denying The Virginian-Pilot’s request for relevant records.
Additional developments may come later this year, Port Authority interim Executive Director Rodney Oliver said, when he expects ecoFuels to break ground for its storage facility in Portsmouth.
“This is a great deal for the port, for the commonwealth and, I assume, ecoFuels,” said Oliver.
He noted that the authority has been working on site design with the green energy outfit, which he said has chosen not to exercise a six-month opt-out provision in the lease agreement.
Cuccinelli signed off on the lease in his capacity as attorney general.
Franklin Pellets’ potential is unlikely to silence McAuliffe’s critics.
They note that an unrelated pellet plant broke ground last year in Southampton County, and that International Paper has resumed some operations at the plant, where another paper company is also active.
And Franklin Pellets?
“It has yet to get off the ground and create a single job,” said Anna Nix, a Cuccinelli spokeswoman.
Virginian-Pilot writer Robert McCabe contributed to this report.
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