CHARLESTON, W.Va. -- The West Virginia Economic Development Authority is moving forward with a $150 million bond sale that will help secure equipment for expanding operations at the Gestamp plant in South Charleston.
The authority on Thursday approved a resolution authorizing the issuance of up to $150 million worth of bonds that will be used to purchase equipment for the Spanish-owned automotive company over the next five years.
The financing assistance was part of the original incentive package state officials used to entice the company to move into the 922,000-square-foot stamping plant along MacCorkle Avenue in South Charleston.
Last April, the company announced it would invest a minimum of $100 million in the facility over the next five to seven years, creating up to 700 jobs.
The state offered a hefty incentive package to attract the company, including $1.5 million in training and employment services and a $2.5 million loan to help with startup costs.
The Economic Development Authority also issued the company $25 million worth of low-interest loans as additional capital. That investment was designed to create up to 175 jobs by the end of this year.
The bond issuance will allow the company to secure additional equipment to further expand operations and bring employment to the 700-job level.
Under the resolution approved Thursday, the authority will issue the bonds and the proceeds will be used to purchase equipment over the next five years.
As the company decides to bring in new equipment, the bond proceeds will be drawn down.
While Gestamp will be using the equipment for production, it will actually be owned by the Economic Development Authority. Gestamp will make regular lease payments to the authority, and those payments will be used to pay the bond debt over the next 20 years.
Since the authority actually will own the machinery, Gestamp will not have to pay property taxes on it.