JASPER, Tenn. -- After the Marion County Commission and Jasper Board of Mayor and Aldermen voted to provide tax relief for a local company's expansion project, Jasper city leaders are pushing to get state grant money for it, too.
Last week, the board voted unanimously to ask that the state allow Tennessee Galvanizing's $2.25 million centrifuge project to begin before the state approves grant funding to help with infrastructure improvements.
County and city administrators approved a 10-year tax abatement plan for the company's expansion last month.
Jasper Mayor Billy Simpson said the only reason Tennessee Galvanizing is applying for the funds is because of a delay in the project's permit approval with the Tennessee Department of Environment and Conservation. He said the company had hoped the new facility would be in production by late December.
"Due to this permit holdup, that's not going to happen," Simpson said. "[Tennessee Galvanizing] is turning down millions of dollars worth of business right now."
If approved by the state, Tennessee Galvanizing could get up to $250,000 for improvements to more than 1,000 feet of water and sewer lines on the property, officials said, but starting the project before the money is approved can be a risky venture.
Jasper Attorney Mark Raines said if the state provides money and, for some reason, the project falls through or doesn't meet the stipulations required in the grant, the state "could require [Jasper] to pay those funds back."
"When you do that, you do so at your own risk," he said. "There's no guarantee that the state will approve that funding, or that they'll provide any assistance."
To eliminate the town's responsibility for the money, a reimbursement agreement has been approved by the board and the company.
In the agreement, Tennessee Galvanizing has committed to reimburse the city if any repayment of the grant money is imposed by the state, officials said.
"If, for any reason, the state tries to get some of this money back, the town of Jasper won't be responsible for it," Raines said. "Tennessee Galvanizing will be responsible."
Gary Cosby of CTI Engineers Inc. said applying for the grant won't delay any other state grant requests Jasper may want to pursue.
"It's not a situation where you have to finish this project before you apply for the next [grant]," he said. "If you had another industry tomorrow [that wanted to apply for a grant], this wouldn't stop that."
Ryan Lewis is based in Marion County. Contact him at firstname.lastname@example.org.