A chemical company hoping to launch a plant in Floyd County announced last week that it lined up a $325 million investment deal, providing some hope that the company will now pay back a contentious $400,000 loan awarded by Pike County four years ago.
RCL Chemical first announced plans in 2014 to create an industrial site in Pike County that would convert natural gas into synthetic waxes, base oils, specialty lubricants and fuels.
The Pike County Fiscal Court, in August of that year, agreed to make a $400,000 loan to the company to help fund the operation.
But then, about two years later, RCL announced plans to move the project to neighboring Floyd County.
The move angered some Pike County officials at the time, and concerns over the project’s financial stability raised questions about what would happen to the $400,000 if the project fizzled out.
“The project was just about on life support,” said Herbie Deskins, the deputy judge-executive for Pike County.
In October 2017, the county's fiscal court voted to file suit in hopes of retrieving the money.
A month later, a representative for the project asked the county during a fiscal court meeting to hold off on litigation until February of this year.
“Where’s the money?” said Jeff Anderson, a Pike County magistrate on the fiscal court, during that meeting. “We requested time and time again to see what was going on, and they never gave us any answers.”
Then, last week, when the company announced the $325 million investment, the question came up again: “What about the $400,000?”
During a forum of candidates for Pike County Judge-Executive last week, all candidates said they would consider filing a lawsuit against the company to retrieve the $400,000, according to the Appalachian News-Express.
But Anderson, who is running for judge-executive, said that now, with news of the investment, the county will hold off on filing suit in hopes of seeing the project come to fruition.
Deskins and Anderson said a lawsuit would have made it difficult for the project to find investors, dooming it to failure before it got started. Both agreed that the project could lead to jobs and economic growth in the region.
The company has not publicly announced plans to pay back Pike County, but Phil Osborne, a public relations consultant speaking for the company, said RCL will make good on the loan.
RCL officials have not responded to requests for comment.
"We are first in line to get paid," Anderson said. "We feel better about this project than we ever have, and hopefully it will become a reality sometime in the near future."
The company could have to pay the county as much as $1 million to make up for interest, Anderson said.
Deskins agreed that the investment will likely lead to Pike County recouping its money, with interest, but gave a more conservative figure of $750,000.
“As far as I know, it’s a 'go',” Deskins said. “Now they’ll start paying off their obligations.”
According to a company press release, the project will create 500 construction jobs during its three phases.
The second and third phases of the project will be expansions to the plant, and could lead to 90 full-time jobs, Osborne said.
“Floyd and Pike counties have been extremely patient and supportive of this project over an extended period,” RCL Chairman and COO Bill Johnson said in a news release. “Early on they recognized the tremendous economic impact this project will have in their communities, creating high quality permanent jobs as well as 500-600 construction jobs during the buildout of the three phases.”
Floyd County Judge-Executive Ben Hale said the project could have far-reaching implications for the region’s economy.
If the project pans out, the plant’s products — which have numerous industrial applications — could attract other businesses to Floyd and surrounding counties, Hale said.
It could also create incentives to open up more natural gas fields, he said.
“It could change the face of our coal economy,” Hale said. “It could be a major benefit to our area.”
Deskins said that while some Pike County officials and residents were upset about the project moving to Floyd County, the project could create jobs that help Eastern Kentucky as a whole.
“It’s going to be a plant that’s open 365, 24/7. You have continuous shifts of highly skilled workers,” Deskins said. “Our cut-off coal miners are great prospects.”