NATCHEZ — Adams County’s newest industrial project’s checkbook will repay the county in full for county port improvements necessary to make the project possible, Natchez Inc. Executive Director Chandler Russ said.

Part of the agreement Natchez Inc. made with Elevance Renewable Sciences ensures full reimbursement for the $3 million the Adams County Board of Supervisors has pledged to invest, he said.

The multi-phase project will involve an investment of more than $225 million by Elevance and will create 165 permanent jobs and 300 construction jobs.

Elevance’s first phase, which is set to start in the fourth quarter of this year, is expected to cost the company $100 million. The second phase, which is slated to start 18 to 24 months after phase one, regardless of phase one’s completion status, is expected to cost Elevance $125 million.

The company won’t be paying property taxes for the first 10 years, but will be paying a fee to local governments in lieu.

The fee will be 33 percent of what the company’s ad valorem property tax assessment is. The 33 percent will be split between the county and the school district.

The first phase should produce approximately $250,000 to $260,000 in annual fees for the Natchez-Adams School District, Russ said. That amount is approximately 48 percent of one third of ad valorem taxes assessed to Elevance.

The county should receive approximately $290,000 a year for phase one from Elevance, the remaining portion of the percentage.

For phase two, the school district should collect approximately $275,000 to $280,000 from Elevance, annually, Russ said.

For phase two, the county supervisors should collect approximately $340,000, Russ said.

During the months or years that construction for phases one and two occur simultaneously, the county and school boards will collect the fee amounts agreed upon for each separate phase.

Gov. Haley Barbour and Elevance CEO K’Lynne Johnson announced Tuesday in Natchez the company plans to break ground this year to convert and expand the former Delta BioFuels facility into a biorefinery to produce specialty chemicals.

The arrangement with the company — called “fee in lieu (of taxes)” — allows the county to use the fees from Elevance to repay the debt necessary for the $3 million port investment.

Elevance qualified for the fee-in-lieu incentive program under Mississippi law because the company will spend $100 million or more on its two phases of construction.

“The key to the whole deal is the revenue stream that’s available to the county that would otherwise not be available to the county,” Russ said.

While the school board will receive less of a percentage of property taxes from Elevance than it would with a traditional tax exemption, the amount of money it will receive because of the size of the investment justifies the arrangement, he said.

The fee-in-lieu agreement poses an advantage to the county because the supervisors can collect the fee from Elevance while offering the company an incentive and investing in the port, while using Elevance’s fee to pay off debt service.

The fee-in-lieu agreement poses an advantage to Elevance because the company pays 33 percent of its assessed property taxes.

The agreement will bind Elevance to the fee for 10 years for each phase. After 10 years, the company will pay full taxes.

Similar fee-in-lieu agreements were used to negotiate the Toyota plant in Tupelo, the Nissan plant in Canton and many more economic development projects in the state, Russ said.

Without such agreements and tax incentives, major economic development prospects would never come, he said.

“Imagine (Elevance) paying — if they didn’t allow (any form of tax exception) — roughly $1.3 million or $1.4 million (in taxes a year). You can do a lot with $14 million in 10 years. That’s the incentive,” Russ said.

Other cities across the country had been negotiating their own deals to recruit Elevance, Russ said, including Houston, Texas; Memphis, Tenn., and locations in south Louisiana and Washington state.

Port investments

The port, the port-owned railway and roadways will receive major upgrades, including improved liquid loading capabilities and a vapor recovery system.

In total, the port will receive $6.5 million in total infrastructure improvements in phase one of the project.

In addition to the county’s $3 million investment, the Adams County Port Commission will fund $1.5 million from its budget and the Mississippi Development Authority will provide $2 million in grant funds, which do not have to be repaid.

In the second phase, the company has pledged to invest $7 million in the port for additional upgrades, Russ said. All of those investments will be made with the company’s own funds, but the improvements made available to the port for use by other businesses as well.

Russ said the second phase port upgrades will pay for a second liquid loader.

“It’s tremendous when you fully realize (Adams County will have) the best liquid loader probably on the river,” Russ said Tuesday.

Fortunately, the county has already bid a project to improve Government Fleet Road, which was something Elevance wanted, Russ said.

Impact on port

Russ said traffic at the port will eventually increase tenfold with 95 percent of Elevance’s raw material arriving inbound on the river.

Barge traffic should increase by 520 barges a year in phase one and 740 in phase two.

Rail traffic should increase by 3,800 rail cars after phase one and 7,600 rail cars in phase two, he said.

The current volume on the entire stretch of rail linking Natchez to Brookhaven is approximately 2,600 rail cars a year from a combination of several companies including Bude’s American Railcar Industries and Natchez’s Mississippi River Pulp.