The Terre Haute Economic Development Commission approved Thursday a resolution allowing Terre Haute to issue conduit bonds for an expansion of Pyrolyx USA’s solid waste recycling plant.
The bond issue would be a maximum of $70 million in Economic Development Solid Waste Facility Revenue Bonds and are to be used for financing the construction of a three-story solid waste recycling plant on 9.3 acres, located next to its current plant.
The second facility would create approximately 50 jobs with an annual payroll of $2.5 million, said Pyrolyx CEO Thomas Redd.
Redd said construction of the second plant is estimated to cost $52 million and be open in mid-2021.
The company extracts carbon black, oil and metal from waste tires to produce raw materials for the rubber and plastics industries.
Kirk Grable, attorney for Barnes & Thornburg, said solid waste facility revenue bonds are a type of nongovernmental bond authorized under the Internal Revenue code in limited amounts and for the purpose of disposing of solid waste.
Grable said the Internal Revenue Service requires that a political subdivision, such as the city of Terre Haute, to issue the bonds, which would then allow interest on those bonds to be excluded from gross income for federal income tax purposes.
He stressed to the commission that although the city would be the bond issuer it would not be liable for any debt, even if Pyrolyx were to default on bond payments. It would be the risk bond holders would have to accept, Grable said.
Steve Witt, executive director of the Terre Haute Department of Redevelopment and president of the Terre Haute Economic Development Corp., said a similar bond issue was done by the city for the first Pyrolyx facility.
A bond issue of this type, Witt said, is also a way the city can help facilitate new job creation and spur economic growth.
“If we have an opportunity to assist in this way, particularly when there is no financial obligation for the community, we want to take advantage of that and try to encourage new job creation and investment in our community,” Witt said.
The bond request next heads to Terre Haute City Council in January.
The company encourages people to apply at firstname.lastname@example.org, Redd said.
Reporter Alex Modesitt can be reached at 812-231-4232 or at email@example.com. Follow him on Twitter @TirbStarAlex.
Reporter Howard Greninger also contributed to this report.