Shire to get $85 million in industrial bonds

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By Tia Lynn Ivey

managing editor

Another $85 million in bonds is underway for Shire (formerly Baxter, Inc.), the company establishing a $1 billion biopharmaceutical plant in Stanton Springs. The Joint Development Authority (JDA), comprised of Morgan, Jasper, Putnam and Newton counties, is tasked with overseeing the Stanton Springs development and will ask the JDA to issue new industrial developmental bonds for Shire, reported Andy Ainslie, a JDA member and commissioner on the Morgan County Board of Commissioners. (BOC) Ainslie gave a brief explanation to the BOC about the process, primarily sighting an increased projection of tax revenues that will be generated from Shire for the four counties.

Ainslie told the BOC that “Shire exceeds its initial investment in the Stanton Springs facility and generates substantially more tax revenues for the counties and the school districts.”

“There should be a $29 million in additional tax dollars during that 10-year period,” noted Ainslie. “It’s very exciting. It’s a good time for everything that is going on there. But there are a number of hurdles, like going through the court system, which will be in Morgan County to have these bonds approved.”

According to a summary from JDA, in 2012, Shire (formerly Baxter) committed to construct a $1 billion biologics manufacturing facility in Stanton Springs and to create approximately 1500 jobs in exchange for state and local incentives, including tax abatements. “Shire informed the JDA that it will exceed its initial capital investment by $85 million,” said the JDA report. “The 2012 agreements contemplate increases in investment and the issuance of additional bonds by the JDA.”

After months of negotiations between Shire, the State of Georgia and the JDA, an amendment to the 2012 agreement has been reached.

According to the JDA, the $85 million in additional bonds will be included in the original tax abatement structure (10-year-phased). “In consideration of and conditional upon the JDA issuing the new revenue bonds, Shire will pay $2.5 million to the JDA for partial payment of the JDA’s $5.9 million GEFA loan used to pay for a portion of the One-Site Pretreatment Facility,” said the JDA report. “The $2.5 million represents a reimbursement for a portion of the GEFA loan which was expected to be funded from federal grants [and] Shire will pay the bond validation expenses including attorney fees.”

Ainslie described the JDA as a “conduit” for these bonds, but stressed the four counties would bear no responsibility for their repayment.

“It will all fall on Shire,” said Ainslie.

The JDA has already issued Shire over $1.1 billion in bonds, which they adamantly defended amidst heavy criticism from the Taxpayer Watchdog group out of Jasper County.

According to the JDA last year, the use of “phantom bonds” to ensure 10 year’s worth of tax abatements was just one of many incentives given to Baxalta/Shire in order to secure the presence in Stanton Springs. The JDA leased 161.56 acres to Baxalta, now Shire, as part of the bond structure. Other incentives included the state grants, waiving building permitting and connection fees, granting naming rights to Baxalta for the parkway, expedited permitting through Walton County, and chipping in nearly $8 million for the onsite sewer pretreatment facility. According to Alan Verner, chairman of the JDA, the $7.9 million allocated for the sewer pretreatment facility was funded partially by a $2 million state grants and a $5.9 million GEFA loan.

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