PARKERSBURG - Local officials are assessing the tax impact from the closure of the SABIC Innovative Plastics plant in Washington Bottom.
The company, which pays more than $900,000 annually in taxes, on Thursday announced the plant will close in 2015.
According to tax records, SABIC owns 600 acres in Washington Bottom, which includes 18 parcels of land. The property includes the plant facilities, buildings and some surrounding property, including land across the road from the plant.
Officials with SABIC Innovative Plastics announced Thursday the facility in Washington Bottom will close in 2015. Wood County may see some changes in tax revenue from the plant during the next 18 months, but depending on the condition of the buildings and personal property remaining on the site, the biggest reduction in tax revenue will be in tax year 2016.
Wood County Assessor Rich Shaffer said tax records show the company pays $209,362 in real estate taxes and $704,976 in personal property taxes, based on the current value.
Also on Thursday, the state announced Odebrecht chose Wood County for an ethane cracker that would be located on the land owned by SABIC, which includes the Tri-C sports facilities next to the plant.
Depending on what remains on the property after SABIC leaves in the form of buildings, machinery and equipment, the value of the property will go down. A land value will remain even if the property is completely vacant, but the levying entities, the municipalities, schools, state and county will see definite tax revenue losses. The schools receive the largest percentage of the tax revenue.
* GE Plastics acquired the Washington facility from Borg-Warner Chemicals in 1988. GE sold the facility to SABIC Innovative Plastics LLC in August 2007.
* SABIC Innovative Plastics officials have announced the Washington Bottom plant will close in 2015.
* SABIC pays more than $900,000 annually in real estate and personal property taxes.
Odebrecht has an option to purchase 300 acres of the SABIC property for the possible development of a cracker plant. No timetable was given for when construction could begin.
The West Virginia State Tax Department does the appraisals for industrial and utility properties, not the local assessor's office.
Shaffer said it is unknown what changes will occur at the plant over the 18-month transition period that could affect property values.
"Depending on what happens with the buildings and personal property - some of which may be removed - the buildings may or may not still be there, that will obviously affect value," Shaffer said.
"No timetable was given for the cracker plant, so we don't know when that might happen," he said.
Shaffer was among those attending the cracker plant public announcement Thursday afternoon.
"If the (cracker plant) company exercises their option to purchase the land, they may have agreements with the state that would make the new facility completely tax-exempt," Shaffer said.
Much is speculation at this point, he said.
"With the announcement Thursday, I expect, through the crystal ball everyone asks about, we will see some businesses come into the area on speculation, that may offset some of the decrease in value from SABIC," he said.
Of the real estate, $153,7000 is attributed to the building itself, Shaffer said of the current appraisal. If the buildings are torn down, the real estate value would be decreased, and it would be appraised for the land value only if it's sitting there vacant.
"The land value would continue to stay with the real estate and be taxed," Shaffer said.
The assessor said many times with industrial sites the larger tax revenue comes from the personal property - things like piping, machinery, equipment and tanks - while the buildings may be field structures with metal sheeting with not a lot of value tied to them.
With personal property, companies are required to report annually. Real estate is revalued every three years. State tax officials go in and meet with company officials to determine the list of personal property.
"There are times when they have gone through the entire plant to verify," Shaffer said.
The assessor noted the 18-month timetable given by SABIC officials puts the closure date at June 15, 2015, which would be before the July 1 assessment date.
"Depending on what is left on the site, the value that would be determined, would be for tax year 2016," Shaffer said.
That will be the first time the county will see a major change, but the firm may reduce inventory, machinery and equipment before that as they downsize and transition, he said.
SABIC officials announced Thursday their employees had been notified the plant would merge with existing plants in Illinois and Mississippi. The plant employs about 130 people. Plant officials said United States Acrylonitrile Butadiene Styrene operations will be consolidated in SABIC's Ottawa, Ill., and Bay St. Louis, Miss. It was anticipated employees would continue to work at the site over the next 18 months assisting with the transition.
The former GE Plastics plant was purchased by SABIC in August 2007. GE bought the plant from Borg-Warner Chemicals in 1988. In 2008, SABIC cut 14 jobs and the following year eliminated 48 more positions, with officials citing poor economic conditions. In 2010, 80 employees were laid off due to restructuring and two manufacturing lines being moved to the Ottawa, Ill., plant. At that time the plant employed about 220 people.