Tazewell IDA approves conditional $1 million support for Richlands decompression facility
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Summary
The Industrial Development Authority approved a $500,000 grant and a $500,000 loan to the Town of Richlands for decompression equipment, contingent on resolution of a billing dispute with the Tazewell Public Service Authority and documentation showing funds are applied to specified equipment.
The Industrial Development Authority of Tazewell County on Sept. 10 approved a resolution to provide up to $1 million in combined grant and loan support to the Town of Richlands to fund decompression equipment for a proposed gas facility, with strict conditions requiring documentation and a letter from the Tazewell Public Service Authority (PSA) that the PSA and the town are in good standing.
County Administrator Eric Young and Economic Development Director Tim Danielson told the board that a mediation this summer indicated the Town of Richlands owed the Tazewell PSA about $680,000, and that Richlands later identified roughly $190,000 in costs it believes should be billed to the PSA, a dispute the PSA continues to contest. Young and Danielson said the IDA negotiated conditions to protect county funds: the $500,000 grant would be disbursed at contract closing while a separate $500,000 loan would be provided as last dollar in and released on a draw basis only after invoices show the money was spent on the decompression equipment.
Danielson said all VCEDA funds will be tied to the decompression station equipment, which staff estimated will total about $2.2 million to $2.3 million. Under the terms presented, the loan would carry an interest rate of 3.5 percent, amortized over 20 years with a 10-year balloon payment. The resolution added a requirement that Richlands provide a letter from the Tazewell PSA confirming the dispute has been resolved or that the PSA is in good standing with the town before the grant portion is released.
Board members voiced concern about Richlands’ financial standing and the county’s ability to ensure funds are used for the stated purpose. Mr. Darrell Addison moved to approve the resolution and Mr. Rick Chitwood seconded; the motion carried 6 to 0. The IDA subsequently rescinded a prior motion of support and re-adopted the amended resolution to include the PSA-letter requirement. IDA attorney Brad Pyott stepped out for part of the Richlands discussion.
Why this matters: The funding is intended to support infrastructure tied to a proposed energy project; the board tied disbursement to documentation and third-party confirmation to reduce financial risk to county-administered VCEDA funds. The next public step will be any contract closing and submission of required PSA documentation.