HATTIESBURG, MS (WDAM) - Hattiesburg City Council members and Forrest County supervisors reached an agreement with Stion Corporation to make monthly fee in lieu of tax payments.
Starting on May 10, 2017, Stion will make monthly payments of $75,000 to the Forrest County Tax Collector to be divided among the city, county and Hattiesburg Public School District to repay fee in lieu of tax money owed.
"Really, it's an effort to allow Stion to get caught up on the fee in lieu payments, and to allow the city and the county to begin to receive the revenue stream that was initially approved back in the original agreement," said Chad Newell, president of the Area Development Partnership.
Located in the Hattiesburg-Forrest County Industrial Park, the American solar panel manufacturer qualified for a fee in lieu of ad valorem taxes (FILA or FIL) agreement with both the city and county in 2013, but has not been able to make the required fee payments.
"The first FIL amount was due on February 1, 2014 in the amount of $778,165.10; the FIL amount due in 2015 totaled $654,646.45; the FIL amount due in 2016 totaled $545,368.76; and the FIL amount due in 2017 totaled $355,174.05," the agreement states. "Despite steady sales, economic difficulties have prevented Stion from having cash flow sufficient to pay these amounts, and Stion acknowledges that it is $2,333,354.36 in arrears on FIL amounts owed."
"Stion is competing in the global marketplace with solar panel production," Newell said. "We've had a lot of Chinese imports. They've had a lot of global things to contend with in the solar panel market. In fact, they are a resilient company because there are very few U.S. solar panel companies remaining, so the intent of this agreement is to ensure that Stion is able to maintain their employment base. It provides them with, really, a little breathing room to make these monthly payments, but yet for the city and the county, it allows them to start receiving revenue."
Under the new agreement, Forrest County will receive 35 percent, Hattiesburg 27 percent and the Hattiesburg Public School District 37 percent of the $900,000 Stion will pay annually, according to Newell. He said those percentages will vary slightly from year to year as millage rates are adjusted.
Newell said tough market conditions also impacted Stion's original job creation and capital investment plans, which were announced in 2011. Initially, the company planned to hire 1,000 employees and invest $500 million by 2019. In 2015, job creation expectations were reduced to 500 and investment to $250 million. To date, Newell said Stion has over 120 employees and has invested more than $100 million locally.
"The company, you know, certainly had grandiose plans from an employment and capital investment standpoint," he said. "While they haven't met those thresholds, they have survived in this global solar panel market place. We certainly hope that they continue to invest capital, hire employees, but our main goal of the city and the county entering into the agreement is to try to help the company stabilize."
Despite not meeting projections, Newell said keeping Stion operating has benefited Hattiesburg and the surrounding area, and the new payment plan makes keeping the company here and open a viable option.
"We definitely have gotten our end of the deal as far as having local folks employed," Newell said. "That's been awesome to have over 100 people on the payroll at Stion and to have over $100 million in capital invested in the region. So Stion has definitely had a positive economic impact in greater Hattiesburg since inception, but the company has this fee in lieu arrearage. They need to start making the monthly payments, so that they can get caught up. Rather than insisting that the company make a lump-sum payment, it's awesome to allow them to pay this over a period of time. Really, we're trying to create a win-win situation for the company and the community."