Hoku Materials (HOKU) Signs Economic Development Agreement With Pocatello
Hoku Materials just announced a new economic development agreementwith the City of Pocatello. The deal could grant Hoku up to $49 millionworth of tax increment financing. Under the terms of the contract, Hokuwill get up to $26 million in incremental property tax reimbursement tocover its capital costs from setting up a polysilicon production plantin Pocatello. Then, as long as Hoku hires a certain number ofemployees, the company will become eligible to receive up to 50% oftheir incremental property taxes back, with a cap of $17 million. Theamount of reimbursement will be reduced to match the amount that thecity spends constructing a public road alongside the new plant.
In a press release, Hoku’s CEO and Pocatello’s Mayor commented on the deal:
"We are pleased to have formalized this agreement with the City ofPocatello," said Dustin Shindo, chairman and chief executive officer ofHoku Scientific. "While the tax increment financing is very importantto us, perhaps more important is the strong support we continue toreceive from the City of Pocatello and the State of Idaho. We arethankful and honored to be a part of the greater Pocatello community."
Pocatello mayor, Roger Chase, added, "The City of Pocatellocontinues to be impressed by Hoku’s efforts. We believe strongly insustainable, diversified economic development for our community, andplan to continue our focus on advancing renewable energy initiatives inPocatello, Chubbuck, and Bannock County."
Hoku also announced that it has reached agreements with four major vendors. Here are the details, from the press release:
In addition, Hoku reported today that it had reached separateagreements with four key vendors: Idaho Power Company, Polymet Alloys,Inc., BHS Acquisitions, LLC, and AEG Power Solutions USA, Inc.,formerly known as Saft Power Systems USA, Inc.
Owing to recent revisions to the timing and amount of prepaymentdeposits expected by Hoku from some of its polysilicon customers, Hokuhad previously announced that it had begun adjusting its constructionand procurement schedule in order to more closely match its cashoutflows with these expected receipts. The Company explained that thevendor contract amendments announced today were reached in order tobetter align Hoku’s capital expenditures and supply chain purchaseobligations to this revised schedule.
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