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Public Notices

April 24, 2014

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Grant Agreement OK'd By Industrial Development Bd.

Originally published: 2013-09-27 11:27:04
Last modified: 2013-09-27 11:31:48



The Industrial Development Board (IDB) gave unanimous approval on Thursday to its role in a multi-party agreement that will allow the conveyance and lease of a water storage tank that would be built for use by US Nitrogen.

The agreement followed the recommendation of a three-person committee of the IDB that is chaired by businessman Scott Niswonger and includes Greeneville Mayor W.T. Daniels and former Greeneville Alderman Ginny Kidwell.

The action is subject to revisions being worked out by Greene County attorney Roger Woolsey and Michael Stagg, the Nashville-based lawyer representing US Nitrogen.


The IDB has met rarely in recent years, but has now met three times in the past six weeks to help facilitate the use of a $923,000 Tennessee FastTrack Infrastructure Development Program grant, that has already been awarded to the county, to assist in water and sewer infrastructure improvements for western Greene County.

Those improvements are crucial to the US Nitrogen plant now under construction off Pottertown Road, company officials have repeatedly said at previous meetings.

The most immediate project in need of financing from the grant is a two-million-gallon water storage tank to be used by US Nitrogen.

As a private-sector business, US Nitrogen is not allowed to directly handle grant money even though the FastTrack funds are for development of infrastructure directly related to the company's site.

The FastTrack grant was awarded to the county on Sept. 17, 2012.

At that time, US Nitrogen conveyed a warranty deed to Old Knox Utility District for a 2.08-acre site where the water tank is to be built off Pottertown Road.

The entities involved in the project are US Nitrogen, the Greene County government, Old Knox Utility District, and First Tennessee Development District, which facilitated the FastTrack grant.


The following actions are how the plan to complete the water tank project are to occur, according to the agreement approved Thursday by the IDB.

* Old Knox Utility District will agree to convey the site of the tank to Greene County.

* Once the tank project is completed, or caused to be completed, by the county and Old Knox, the county will convey the water tank site and the tank to the Industrial Development Board.

* The Industrial Development Board will hold fee title to the site and the water tank, and lease the tank back to US Nitrogen on a 99-year basis at a nominal fee.

* The county government or Old Knox Utility District will be responsible for securing all governmental and regulatory approvals, licenses and permits to construct, install and operate the water tank.

* The county will provide "utilities" required for installation, commissioning and operation of the water tank project.

The cost will be paid for by the FastTrack grant and US Nitrogen. The company has made a $1.038 million commitment to the project, to go along with the $923,000 from the state FastTrack grant.

In addition, US Nitrogen has pledged to cover any cost overruns.

For example, US Nitrogen has already paid to the county an additional $138,000 to upgrade the size of the water tank from the original 1.5-million gallon capacity to 2-million gallon capacity.


According to the agreement approved by the IDB on Thursday, the schedule for delivering the water tank site and associated improvements to the IDB and leasing the water tank site and improvements to US Nitrogen will include:

* The county shall direct a general contractor to begin construction of the tank.

The tank will be constructed by Crom Construction Corporation of Gainesville, Fla. The company was the successful bidder for the project on Feb. 21.

* On the transfer date, the county will execute and deliver to the IDB transfer of title to the water tank.

* On the transfer date, the IDB will execute and deliver to US Nitrogen the lease agreement.


Woolsey, the county's attorney, expressed concerns over some of the wording of the agreement that regards mainly interaction between US Nitrogen and Greene County.

"The county has not appropriated any money for this project, so anything we do, we have to make sure the county is not out any money," Woolsey said.

" I think the county wants to do everything in its power to move this project forward," Woolsey said, "but the county has no expertise in building a two-million-gallon tank.

"There's some level of discomfort for the county assuming that responsibility," he said.

Woolsey noted that the County Commission on Sept. 16 had approved a change in contract regarding the FastTrack Grant in which they authorized Broyles, as county mayor, to manage agreements regarding water infrastructure at US Nitrogen.

"What the county assumed is we were a passive participant in assisting this going forward," Woolsey said on Thursday.

"When I read the contract, I don't see we're passive, I see we're the main player."


Michael Stagg, the attorney for US Nitrogen, was asked for his input.

In reference to Woolsey's concerns about the county's role in the agreement, Stagg reminded those at the meeting that the county is the grant applicant and that "US Nitrogen has stepped up to fund any change orders."

Bill Forrester, director of Industrial Programs for the First Tennessee Development District, also emphasized that the FastTrack agreement is between the State of Tennessee and the county.

"We have already bid the project, the contractor is in place," Forrester said. "US Nitrogen has agreed to cover any costs over and above the grant. I will be the administrator of the grant.

"This is a typical grant," Forrester said.

After further discussion, Broyles asked if Woolsey and Stagg could "get this worked out."

Both attorneys agreed to work on it.

As conversation continued, a consensus seemed to form among IDB members that liability concerns expressed by Woosley did not affect the IDB's approval of its role in the multi-party agreement.


About an hour into the meeting, County Mayor Alan Broyles, who also chairs the IDB, asked if there could be a motion for the IDB to approve the agreement, subject to revisions by attorneys for the county and US Nitrogen.

Niswonger made such a motion. It was seconded by Brandon Hull.

The vote was unanimous.

"We're prepared to work through the details," said Jim Boldt, vice president and chief financial officer of Austin Powder Company, the parent company of US Nitrogen, who attended the meeting.

For more information and stories, see The Greeneville Sun.

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