POCATELLO — Get the defunct $700 million Hoku polysilicon processing plant operational or clear the property and establish an industrial park.
That was one condition of a two-year lease agreement between VA Metals LLP of Bangalore, India, and the Pocatello Development Authority when VA Metals purchased the physical plant assets from Washington state contractor JH Kelly LLC in the summer of 2016.
Two years later, neither of those agreements have come to fruition, so Pocatello and PDA officials hosted a special executive session this week to discuss the various options moving forward.
Pocatello Mayor Brian Blad told the Journal this week that he could not discuss specifics of the executive session meeting. However, Blad did say PDA is debating whether to renew the lease with VA Metals and the overall nature of the meeting was to find out how to push VA Metals to make true on its agreement from 2016.
“We’re actually trying to figure out how to push (VA Metals) to do something about the facility — either tear it down or turn it into something useful,” Blad said. “They met in executive session to see what options there are to get that plant moving again.”
Though no official action was taken during the executive session meeting this week, Blad said he expects PDA and the city of Pocatello to continue gathering information for a path forward.
VA Metals did not immediately respond to the Journal’s request for comment.
Fueled by dreams of a successful high-tech employer setting up shop in Pocatello, Hoku broke ground on the plant with heavy support in 2007. Set to make polysilicon for solar panels for a growing alternative energy market, the 67-acre site property was leased to Hoku for $1 per year for 99 years.
After Pocatello purchased the property for $900,000 and leased it to Hoku, Idaho Power Company built a 110 megawatt power substation on the property and the city also improved road access to the land to handle heavy truck traffic.
And while the plant neared completion, it never entered into the production stage. In 2012, construction stopped.
In July 2013, Hoku and its subsidiaries filed for Chapter 7 bankruptcy liquidation, reporting about $1 billion in debts.
When Hoku filed for bankruptcy, JH Kelly was left on the hook $25 million in unpaid expenses. But despite being on the hook for millions of dollars, Kelly paid all 104 subcontractors who worked for the main contractor on the Hoku project.
Kelly then bought the plant for $8.3 million and began repaying the 104 subcontractors. In 2015, Kelly began to sell pieces of the plant to recoup its losses — including transformers, reactor vessels and huge electric motors.
A year later, VA Metals purchased the facility.
“When VA Metals purchased the plant, they thought they had a line to make it work,” Blad said, “or that they could disassemble it and send it to another polysilicon processing plant.”
Meanwhile, the India-based company has made very minimal progress in that regard.
And following this week’s executive session meeting, it appears Pocatello and PDA have grown impatient with the lack of results.
But after more than a decade and three different owners, it’s no surprise the city would like to do something positive with the plant or the land it sits on, especially considering that the economic development future of the Gate City looks bright.