With $82 million investment, AppHarvest finally ready to build its 60-acre greenhouse

It’s been about two years since AppHarvest, the company aiming to make Eastern Kentucky the “high-tech agriculture capital of the country,” planned to begin construction of a two-million square foot greenhouse in Pikeville.

After numerous delays and the company’s decision to move its greenhouse to Morehead in January, AppHarvest announced this week that it has secured enough funding to begin construction.

An $82 million cash investment from Equilibrium Capital has put the company on a path to finally getting its greenhouse off the ground. Construction should begin this summer, officials said, and AppHarvest hopes to be fully operational in the latter-half of 2020.

Earth-moving equipment from Mount Sterling-based Walker Construction has already arrived at the site, where workers plan to level ground for the 60-acre, 2.7 million-square-foot greenhouse.

AppHarvest hopes to create 285 full-time jobs and grow tomatoes and cucumbers under the massive glass and steel greenhouse.

The investment is big news for the company. After it left Pikeville, some residents and local leaders expressed skepticism about AppHarvest’s viability and whether the project would come to fruition.

“This was hard,” said AppHarvest CEO and founder Jonathan Webb. “We all know what happened in Pikeville.”

AppHarvest said its Pikeville site, on a reclaimed strip mine, was not feasible for building its greenhouse.

Bob Helton, the executive director of the Morehead and Rowan County Economic Development Counsel, said the project and its 285 promised jobs would be “absolutely huge” for the region.

“It puts us in a whole other industry,” Helton said.

Rowan and its surrounding counties have suffered from higher unemployment rates than the statewide average of 4.1 percent.

Rowan County, at 5 percent, has fared better than its neighbors, including Morgan County, 6.1 percent; Menifee County, 7.9 percent; and Bath County, 6.6 percent.

AppHarvest’s investment comes from Equilibrium Capital’s Controlled Environment Foods Funds, which raised $548 million, according to a report from Global Ag Investing.

David Chen, Equilibrium’s chairman and its head of product development research, said the firm has invested in large-scale agriculture and food projects since 2011.

Chen declined to say how much the company has invested in different projects throughout the years, but said the firm has previously invested in greenhouse operations.

Webb credits the investment to local support from officials in Morehead, the University of Pikeville, the economic development group Shaping Our Appalachian Region, and others.

Along with Equilibrium, the company also received a second investment from the Rise of the Rest Seed Fund, which is led by AOL co-founder Steve Case and “Hillbilly Elegy” author J.D. Vance.

Webb said the company hopes to give grocers a regionally-sourced option during the off-season, rather than relying on Mexican importers.

Alison Davis, a professor of agricultural economics at UK and executive director of the Community and Economic Development Initiative of Kentucky, told the Herald-Leader last year that AppHarvest may have a difficult time competing in a market “that has been dictated largely by Mexico.”

“It’s going to be challenging,” Davis said.

Others have expressed concern that AppHarvest, if it cannot compete with Mexican importers, may end up pushing local producers off the shelf.

Webb said the company hopes to do the opposite. He envisions AppHarvest as the first in a series of high-tech greenhouse operations that can turn Eastern Kentucky into a hub of regional produce.

“No one here is our competition,” Webb said. “We want to push folks off the shelf that are 2,000 miles in the other direction.”

Will Wright is a corps member with Report for America, a national service program made possible in rural Appalachia with support from the Galloway Family Foundation. Reach him at 859-270-9760, @HLWright