Demopolis will repay $71,517 of ADECA grant

Published 3:06 pm Wednesday, July 16, 2014

The city of Demopolis will repay $71,517 to close out a grant from 2011.

The city was awarded the $421,517 grant to rehab a railroad spur at the industrial park on Highway 80 West.

The ADECA Economic Development grant was to have created 100 jobs at the industrial park.

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Most of the jobs were expected to come from Ctco Shipyard. However, the barge builders closed up shop after general manager Kenneth Lackey died unexpectedly in 2009. The city took over the property in mid-2011.

“We bought the property in July 2011 and, at the point in time, we began in earnest marketing it and trying to get tenants,” said Demopolis Mayor Mike Grayson.

Without expansions to the shipyard, the city ended up short of the grant’s 100 job requirement.

“I hate to have to pay one penny,” Grayson said. “ADECA has been very patient with us. They realize we have been working hard to try and get those jobs funded.”

Grayson said the Department of Housing and Urban Development was putting pressure on ADECA to close the grant.

The city ended up cutting a deal with ADECA that if 42 jobs were created then Demopolis wouldn’t have to repay anything. The agreement equaled roughly $10,000 per new job.

Counting hires at RockTenn’s chip mill and a few others, Demopolis ended up about seven jobs short, which left the city owing $71,517, according to the mayor.

Grayson said if there was any silver lining in the situation it was that the city got the railroad spur rehab for much less than it would have cost outright.

“With the building, the property, the rehabbed rail spur, we have gotten a lot of interest from industries that ordinarily wouldn’t be calling about Demopolis,” Grayson said.

The city will now be able to apply for future grants, something that couldn’t happen until this one was closed.

“Moving forward, the emphasis is we are eligible for future grants. We have several projects we would like to use a grant for,” Grayson said.

A public hearing about the grant’s closing will be held at 4:45 p.m. Thursday before the regular city council meeting.