Austrian-based manufacturer looks to bring 300-plus new jobs to community by 2026

Bonds validated for $58M voestalpine expansion project

By JAMES SWIFT
Posted 1/2/20

Cartersville-Bartow County Department of Economic Development Executive Director Melinda Lemmon confirmed that bonds issued by the Bartow-Cartersville Second Joint Development Authority (2JDA) for a …

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Austrian-based manufacturer looks to bring 300-plus new jobs to community by 2026

Bonds validated for $58M voestalpine expansion project

Posted
Cartersville-Bartow County Department of Economic Development Executive Director Melinda Lemmon confirmed that bonds issued by the Bartow-Cartersville Second Joint Development Authority (2JDA) for a proposed $58 million voestalpine project were validated in Bartow Superior Court earlier this week.

“I believe by Dec. 31, most if not all of the transactions involved in this process were closed,” she said. “There was an incredible volume of work that was done by the attorneys all the way around in such a short period of time.”

The 2JDA initially signed off on a bond resolution agreement at a Dec. 6 board meeting. As authority legal counsel Keith Lovell noted, the request was fairly atypical.

“Normally, it’s sort of the opposite way,” he said. “The company approves it first and then we approve it, but in this case, they’ve asked us to go ahead and send them the proposal.”

The aggregate principal amount of the 2JDA’s series 2019 bonds is not to exceed $180 million. The purpose of the bonds, according to a public notice, is to refund the authority earlier taxable revenue bonds issued to voestalpine Automative Body Parts, Inc. in 2016 and 2013. 

“The original project and a subsequent expansion of voestalpine was about $112 million in previous bonds,” Lemmon said. “That’s being rolled into this one, so the difference, it is maybe $58 million and change.”

A memorandum of understanding (MOU) between voestalpine and the 2JDA became effective Dec. 12. According to bond resolution documents, the Austrian-based manufacturer seeks to invest $58.5 million in an expansion project in Bartow County, which the company expects to bring 324 new jobs to the community by 2026.

Lemmon said she anticipates voestalpine spending most of the bond monies to purchase new hardware and machinery.

“It could be some building additions, as well,” she said. “There’s been some confusion that this expansion, this growth, would be outside the original footprint. It is not that at it this point — it’s predominantly equipment and possibly some aspects of building improvements onsite.” 

The MOU inked by the two parties also includes an abatement schedule, with real property taxes increasing by 6.67% each year over a 15-year period and personal property taxes increasing by 14.25% each year over a seven-year period. 

“It is the same as the previous abatement timeline,” Lemmon said. 

By and large, it was a rocky year for voestalpine. The international steelmaker finished 2019 by reducing its profit forecast on Dec. 16, ultimately dropping its anticipated earnings to about $1.3 billion. One month earlier, the company agreed to pay about $73 million in fines to German authorities as part of an alleged price-fixing scheme also involving European manufacturing titans Thyssenkrupp and Salzgitter AG.

A letter issued to company investors last year listed lower than anticipated production numbers at the Bartow County facility off Cass-White Road as one of the reasons why the company elected to decrease its full-year profit forecast. Shortly afterwards, a representative of voestalpine told The Daily Tribune News that Bartow County operations were behind schedule on processed orders due, in part, to a “shortage of skilled workers in the region.” 

Still, voestalpine CEO Herbert Eibensteiner said he expects business at the local facility to pick up drastically in the year ahead.

“We still have to digest the startup costs there, but we have improved and are expecting a positive result next year,” he told European media outlets in late 2019.

Lemmon said she likewise shares the optimism. 

“As the [original equipment manufacturers] in the Southeast U.S. continue to grow and need the specialized parts that voestalpine can provide, I think their outlook is very positive,” she said “Obviously, one of the original reasons that they came to our community is that we could be a good community partner and that we were ideally located between their customers — those advantages, and others, have not changed.”

Although voestalpine has yet to publicize its own timeline for the project, Lemmon said she wouldn’t be surprised to see the company file a Developments of Regional Impact (DRI) application with the Georgia Department of Community Affairs shortly. 

“It was important to try to get those bonds validated by the end of the year, so my educated guess is that we will be seeing some DRI requests off of that very soon, for investment in the allowed uses — that being equipment or some building facilities,” she said. “It seems that we’re going to be able to see some tangible results in the very near future … the timeline is a good indicator that they’ll be moving forward quickly with some of the acquisitions of real or personal property.”