American Merchant received no city incentives to open Bristol plant

BRISTOL, Va. — The city of Bristol, Virginia, landed a manufacturing prospect promising 400 new jobs without committing to any financial incentives — the equivalent of winning a battle without firing a shot.

American Merchant, a U.S. subsidiary of Merchant House International, formally announced Tuesday that it plans to locate in the former Ball Corp. plant on Old Abingdon Highway, where it will manufacture bath towels.

In the past, city leaders have been heavily criticized for offering substantial incentives to retailer Cabela’s or investing heavily in projects such as The Falls commercial center near Interstate 81’s Exit 5.

Two incentives were announced during Tuesday’s ceremony — $590,000 from the Virginia Tobacco Region Revitalization Commission and $300,000 from Gov. Terry McAuliffe and the Commonwealth Opportunity Fund.

“The city hasn’t given anything — except there are Tobacco Commission funds the city could be liable for, should American Merchant not abide by the [commission’s] performance agreement,” City Manager Randy Eads said Wednesday.

Precise terms of that grant haven’t been finalized, Eads said.

Tobacco Commission grants flow through the local entity’s books to the business, and recent grants typically include a clawback provision, allowing the commission access to its funds should the business fall short of its promises for investment and number of jobs.

The company has purchased the property for $1.9 million, committed to nearly $20 million in expenditures to outfit the 200,000-square-foot facility and announced it intends to hire 405 people as soon as orders warrant them gearing up to three shifts.

The facility is expected to begin production in the first quarter of 2019.

One thing the city is doing for the firm is applying for a federal Economic Development Administration grant.

“American Merchant will be consuming large quantities of water in their dye processes. They will be treating that water and either releasing it into a holding tank for a wastewater treatment facility on their own property or — based on how they treat it — it could just be released into Beaver Creek. This grant would allow them to help fund the wastewater treatment facility,” Eads said. “It’s still in the early stages how it’s going to be treated.”

If the grant is approved, it would all be federal money, and no local matching funds would be required, Eads said.

During Tuesday’s tour of the facility, American Heritage displayed a diagram of a ProChem water recycling system that is expected to recycle about 80 percent of the water the facility expects to use.

Brian Kidd, vice president of Pro-Chem, answered questions about the system.

“The water we’re putting into the water system will be as clean, if not cleaner, than what we’re taking out of it,” Kidd said. “This will use a lot of water. The water you generate from that [manufacturing] process has color and some other contaminants that have to be removed. We’ll actually reuse about 80 percent of the water, [which] will be cleaned and put back into the process. … The process is multi-step, and I would say the water from our process is cleaner than the drinking water you have coming out of your faucet.”

Once three manufacturing shifts are up and running, the plant is expected to generate 200,000 gallons of wastewater per day. They expect to reuse 160,000 gallons and discharge 40,000 gallons into the sewer system.

BVU Authority isn’t providing any direct aid to American Merchant but is working with the Tennessee Valley Authority on a potential electric system incentive using TVA funds, BVU President and CEO Don Bowman said.

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