Gestamp Plant Gets $150M in Development Authority Bonds - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Gestamp Plant Gets $150M in Development Authority Bonds

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The story is not completely written for Gestamp, the South Charleston stamping plant that closed in 2006 and reopened in 2012.

The plant, located on MacCorkle Avenue, was an automotive stamping operation for about 40 years before it closed in 2006. The site's owner, Park Corporation, is headed by Ray Park, who purchased machinery in 2007 and worked to modernize the equipment through partnerships with the state.

Part of that plan moved forward May 16 at a meeting of the West Virginia Economic Development Authority when members adopted a resolution to allow $150 million in 20-year bonds for new equipment at Gestamp. The state will own the equipment at first, and Gestamp will pay off the bonds on it.

The new bonds will be consistent with previous equipment bonds already in place for the plant.

"This is part of their original five- to seven-year investment plan," WVEDA Executive Director David Warner said. "This is unique to Gestamp, but there are about a dozen projects around the state where we own the equipment and lease it back."

Warner said Quad Graphics in Martinsburg and Toyota Motor Manufacturing in Buffalo are two examples of similar situations.

Warner said Gestamp's progress is ahead of its projections, but the West Virginia Center on Budget and Policy has criticized the state's incentives for Gestamp and other projects all along.

Gov. Earl Ray Tomblin announced in 2012 the state planned to invest a minimum of $100 million in the plant to create as many as 700 jobs, and at the time, WVCBP Executive Director Ted Boettner said Gestamp would pay few taxes because of the incentives. Just this week, WVCBP fiscal policy analyst Sean O'Leary said the Center's opinion remains the same.

"We don't know exactly how often the Economic Development Authority does these bonds and how much equipment are they leasing, and is the state getting the bang for their buck on the investment?" O'Leary said. "We're not just picking on the stamping plant, but in general, the total value of our business tax incentives, where are they going, what types of jobs they're creating … the state puts out reports sporadically, out-of-date, and they're rarely complete, so to get a number on any of these would be an improvement."

O'Leary said it's hard to make a judgment or decision on whether any of the state's investments have been good decisions without all the information.