New coal mine moving forward; Greene County Council to consider tax abatement

This is the first step for the Lily Group, Inc., of Sullivan, to obtain a requested seven-year tax abatement on equipment and property improvements.

A legal notice outlining the planned action to name the area an economic area will be published in the Greene County Daily World before Dec. 3.

The council will conduct a public hearing at its next meeting at 4 p.m. Monday, Dec. 14 to hear from supporters or remonstrators of the mine project that is expected to employ up to 100 people by May 2011.

Final action on the economic revitalization area and the tax abatement is expected at the Dec. 14 council meeting.

One of the stipulations that the council insisted on the developers including in their final revitalization area and abatement documents is at least 60 percent of the hired employees would be Greene County residents.

Council William "Butch" Brown said, "I'd like to see Greene County people working there."

When asked if the coal company would put that stipulation 'in writing" Lily Group Treasurer Cory Smith told the council, "We would have no problem at all making sure that verbiage is in there (the documents)."

The proposed mine is located at the northwest corner of the intersection of County Road 1500 West and County Road 700 North, southwest of Jasonville.

According to the terms of the Notice of Adoption of the Designated Economic Revitalization Area, the tax abatement shall be allowed to Lily Group only if it satisfies the condition that it employ at least 20 persons at the facility by May 1, 2010 and 100 persons at the facility by May 1, 2011.

Lily Group has already received approval from the Greene County Commissioners, who signed off on a federal grant application that will provide the coal company with a $1 million Disaster Recovery Grant to purchase mine equipment.

Smith said permits for the mine site are still pending with that Department of Natural Resources - Division of Mines officials, but he noted that the firm has been notified that the permits are "administratively complete."

Lily Group has an informal conference set for Jan. 5, 2010 with state officials to finalize the permit process, Smith noted.

Smith, who said no new information was requested, said once all of the engineer amendments are made, he expects the permit process to be wrapped up by mid-January.

Production at the mine is expected in the Spring 2010 and Smith pointed out that a recent study by an independent firm has shown coal reserves that will span a minimum of 20 years.

The firm has about 2,800 acres in its permit application -- including 1,400 that Lily owns the mineral right and another 1,400 that they have leased the mineral rights. The company owns about 20 actual acres where the mining operation will be based.

All of the acreage is located in Greene County, Smith said.

Wright Township Trustee Carolyn S. Hubbell attended Monday's meeting and had questions about the tax abatement and money that would be lost to her township, if the abatement was approved.

Smith reiterated the benefits by saying 60 percent of the 100-person workforce would be Greene County residents, who would have 'well-paying' jobs.

He also said the company plans to purchase more than $5 million in production equipment that would be subject to full taxation after the seven-year abatement period passes. During the abatement, the taxes paid would be graduated on an upward percentage scale over the seven years until a 100 percent level in 2017.

Smith also said the company at its own expense is increasing the electrical capacity in the area to accommodate the new equipment, which will have a benefit to the nearby town of Jasonville.

Smith pointed out that with the planned abatement, the company would have seven years to build the company and 13 years to pay full county taxes.

Council president John Wilkes noted that the county 'had been burned' on some previous tax abatements and he wanted to make sure the permitting process was in order.

"We do need the jobs and we want the jobs," he added.

Smith stressed that the county was at no liability on the project.

"There is no liability whatsoever for the county, he said.

County Council Attorney Marvin Abshire agreed and said the county is out nothing if the deal to start the mine falls through.

"If things fall apart before they get started, from the council's perspective you've gained nothing and you've lost nothing except for the time spent on this," Abshire said.