East Alabama Lumber to rebuild in LaFayette, Commission approves tax abatement

Published 6:50 am Wednesday, June 30, 2021

East Alabama Lumber Company wants to rebuild its sawmill in LaFayette, according to Chambers County Development Authority Community Development Manager Chris Busby.

Busby spoke at Monday night’s Chambers County Commission meeting, saying that the lumber company has committed to rebuilding the sawmill that was lost in the April 23 fire. The commission unanimously approved both a project agreement and a 10-year tax abatement for the rebuilding of the sawmill.

Busby presented a sales and use tax abatement for the new equipment and machinery to rebuild the sawmill and a 10-year tax abatement on non-educational ad valorem taxes on the materials that will be purchased for the rebuild.

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“The amount of tax generated from this, with the abatements from Chambers County, on the sales and use portion, $107,500, on the ad valorem over the course of 10 years for $443,986,” Busby said.

The cost to rebuild the sawmill will be approximately $20 million and is expected to take at least two years to rebuild.

Prior to the fire that destroyed much of the operation, East Alabama Lumber employed approximately 90 people and had to move 45 of those over to the Salem facility to meet the demands of running two shifts. Busby also pointed to the company’s secondary impact on the community and the timber industry.

“I think it took us all by surprise, the trickle down impact that they have on the loggers, on the utility providers, even the value of timber,” Busby said.

Commissioner James Williams added that if East Alabama Lumber closed, the trickle-down effect would be much more significant than if one of the automobile manufacturing plants were to close. 

“This operation here, would affect Chambers County as a whole worse than if a car manufacturing plant closed because the trickle-down effect from the sawmill, to the producer, to the landowner, and it’s not just the 90 people that’s employed at the sawmill, there’s hundreds of folks out there who are employed by this industry,” Williams said.

Commissioner David Eastridge asked how close Chambers County was to losing the business. Busby said the company voted 4-3 to rebuild.

Busby also presented another project agreement and noneducational tax abatement for Daedong Hi-Lex of America located on County Rd 177 in Cusseta, which the commission approved unanimously.

Hi-Lex is planning a $14.9 million expansion of the current operation. Of that, $6.6 million is for sales and use and $8.3 million for property tax. Busby said one thing that was done differently in this abatement — because Hi-Lex plans to add 45 new employees — is that they have asked to not abate the roads and bridges portion of the county’s ad valorem tax.

Included in the project agreement, Hi-Lex must meet the goal of 45 new employees within one year of completion of the construction and meeting the wage requirements. The penalties for not meeting the employee goal are $1,500 per employee they did not meet would be given back to the county.

Busby told the commission Hi-Lex is planning to add a new line and warehouse space.

“The goal is to add a new line and new warehousing space — about 43,000 square feet on their existing facility in Cusseta,” Busby said.

In other business, the commission also approved a contract agreement between the county and the Association of County Commissions of Alabama (ACCA) to administer the $6.4 million in American Rescue Plan (ARP) funds contingent upon final approval by Attorney Skip McCoy. The county will pay ACCA 6% of the ARP funds, which was negotiated down from the original proposal of 8%.

McCoy called into question liability language in the contract that says the association will not be financially or legally responsible for any misuse of the funds.

McCoy said, “we’re going to be paying 6% of the money, so that they make it right.”

The ACCA will act as the expert and administer the money and the county was going to rely on ACCA expertise.

Bradford said manpower and time is one of the driving forces behind partnering with the ACCA. “A big part of it is, Skip’s office does not have the manpower, Josh [Harvill] and Regina [Chambers] don’t have the time or the expertise to manage this because it is very, very restricted. I mean, there’s a lot of good things out there, we can’t just pick the top projects in Chambers County and give X amount of money to either one of them. It’s’ got to legally be spent by the guidelines of the American Rescue Plan,” Bradford said.

In other commission business, the commission approved a restaurant retail alcohol sales license for The Crowe’s Nest located on West Point Lake.