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Titan Declines Tax Break; Foes Rally

By JP Finlay, posted Nov 26, 2010

This month, Titan Cement announced that it would no longer accept state and county tax incentives to build a new cement plant in Castle Hayne. In doing so, Titan hopes to no longer be subject to state-level environmental studies, a move that should hasten the construction of the plant.

In May, a Wake County judge deemed the $4.5 million tax incentives awarded to Titan in 2008 cause for the State Environmental Policy Act. The plaintiffs of the suit were the North Carolina Coastal Federation, Cape Fear Riverwatch and other members of the Stop Titan Advocacy Network.

By instituting SEPA, Titan claims the construction process would be delayed two years. Without the incentives, Titan believes it will only have to submit to the National Environmental Policy Act. Both the state and federal processes require an environmental impact study.

The advantage for Titan is that the NEPA study allows for application of an air permit from the N.C. Department of Air Quality while the study is being conducted. Under the SEPA study, Titan cannot apply for the air permit until the study’s conclusion. When Titan obtains the air permit, it can begin designing the cement plant. The design phase can take up to two years.

“Once this plant is up, everybody is going to say ‘What’s the big deal?’ We’ll be hiring people, paying taxes and being a part of the community. If you’re downtown or at the beach, you won’t even know we’re here,” said Bob Odom, general manager of Carolinas Cement, the local Titan subsidiary that will run the Castle Hayne plant.

Mike Giles of the North Carolina Coastal Federation leads the Stop Titan advocacy network. Stop Titan believes that the construction magnate remains so adamantly opposed to SEPA testing in an effort to force regulators to deliver a positive decision on a state building permit. Stop Titan wants the SEPA testing done.

“This is one of the most polluting industries in the country,” Giles said. “Since day one (Titan’s) number one priority was avoiding state law.”

“The opposition’s goal is to delay us. Delay, delay, delay. That’s not our plan,” Odom said. “SEPA is not more rigorous testing, it just adds time.”

Henry Wicker is the project manager of the Army Corps of Engineers that will oversee the NEPA study for the Titan plant. According to Wicker, the NEPA test is slightly broader than the SEPA test, and there are no outside factors that would influence the study.

“If Titan gets that air permit and starts designing, which costs millions of dollars, that is a political move,” Giles said.

“We can only consider what is part of our process, we defer to the state on the air quality permit,” Wicker said. “Just because they spent a lot of money doesn’t sway our decision-making process.”

Giles disagrees. “It puts pressure on the regulators, I don’t care what anybody says. If Titan wants that permit before the study is over, it speaks to their intentions. They want that one permit first, it ties them to the site.”

The opposition to the cement plant started almost immediately after county, state and Titan officials announced the plan to build the new plant on the old Ideal Cement site. Titan already owns the land, and currently Martin Marietta mines the land. The Titan plant would mine limestone to create cement. To create the cement, the plant will burn coal. The new plant should create more than 2 millions tons of cement a year by burning 150,000 tons of coal a year.

Stop Titan advocates are concerned because of the toxins released by the coal and limestone incineration, and additionally by mercury released into the Cape Fear River. The site for the plant sits along the banks of the river, surrounded by ecologically important wetlands. Titan already agreed to leave more than 300 acres of wetlands untouched, though critics claim that was also done to avoid SEPA testing.

“You build cement plants where the materials are,” Odom said, citing limestone reserves on the land. Titan will build a closed loop water system at the plant. “We’ll try to keep the environment as clean as we possibly can, but there are tradeoffs.”
Odom said the plant will create 160 new jobs the plant, at an average of $75,000 annually per person including benefits.

“As long as a company is working within state and federal regulations, we see no reason to prevent them from doing business – especially when they are proposing to bring much-needed jobs and investment to our state,” said John Peterson, executive director of the North Carolina Economic Developers Association.

Titan, an international heavy construction conglomerate based in Athens, Greece, has a strong environmental record at other cement plants. In 2009, the Titan cement plant in Roanoke, Va., was awarded the Governor’s Award for Environmental Excellence for Land Conservation.

Though the Roanoke plant is smaller than the proposed Castle Hayne plant, Titan also operates a cement plant in Pennsuco, Fla., comparable in size to the proposed Wilmington plant. Both the Pennsuco and Roanoke plants won Energy Star Awards in 2009.

Energy Star is a joint program of the EPA and the U.S. Department of Energy that honors organizations that have made outstanding contributions to protecting the environment through energy efficiency, according to the Energy Star Awards website.

For Titan to turn down tax incentives at this point in the process is not a first, according to Kim McCarl of the state commerce department. “It’s not unusual to enter into an incentive agreement with the state and then not be able to meet the criteria. There are stipulations to the money that make it not worthwhile to take these incentives,” McCarl said.

“When Titan applied for the incentives, they said they needed them. That’s a bogus claim, they don’t need them. That’s just not telling the truth,” Giles said.

“It’s the old polluter’s strategy, divide and conquer,” Giles said. “We’re not anti-job, we’re not anti-development, we’re not anti-cement. For us, this is just not a place for a cement place and a mine. You can’t separate the kiln and the mine.”

McCarl did point out that Titan previously stated a need for the incentives. “To qualify for tax incentives a company has to certify that but for the incentives, they would not bring the jobs to the state,” McCarl said. “In 2008 the $4.5 million was valuable, but that is no longer a good business decision. Today it’s a different situation.”

Titan is currently appealing the ruling requiring the SEPA testing, though the situation has changed since Titan announced they will no longer take public money.

“We still have to address that appeal, but we feel confident now with the elimination of the incentives,” Odom said.

“Until we’ve seen they’ve withdrawn their appeal, we are moving forward,” said Geoff Gisler of the Southern Environmental Law Center. Gisler represented the Stop Titan network in the lawsuit that forced SEPA testing on the Titan plant. “They say they’re going to comply with all environmental regulations, but their actions don’t necessarily match their words.”

“It’s just a string of broken promises. In essence, they’ve cut a $4.5 million check to avoid that state law,” Giles said.

“We’re not going to build the plant until we have all the permits. Why take a chance? Why roll $450 million dice if we don’t get the permits? It makes no business sense, and we are running a business,” Odom said. “We’re avoiding nothing. Every test will be run. It seems like every time we agree, the rules change.”

Odom pointed out that the Titan case is an important bellwether for Wilmington and North Carolina related to business development throughout the state. “Is every company going to be treated this way or just Carolina Cement? If it is every company, people are going to have trouble doing business in this state.”

Odom said the plant will need to operate for at least 30 years to become profitable, though Odom expects the plant to last at least 50. Since limestone is a finite resource, eventually the plant will surpass its lifespan.

“The more we destroy our wetlands, critical ecosystems, we’re either going to pay now or pay later. And Titan will be gone,” Giles said. “We’re in it for the long haul. This is our community, we’ll be here forever. Titan won’t.”

When the plant finally does cease to function, Odom says the quarry can be filled with water for a recreational area. The plant will remain.

“This plant is getting built,” Odom said. “It’s just a question of how long it’s going to take, but this plant is getting built.”

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