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2018-01-24 / Featured / Front Page

State forecloses on Tranlin property

Chinese paper company fails to repay $5 million
By Jim McConnell
STAFF WRITER

A state agency is taking possession of a 58-acre Chesterfield industrial parcel owned by a Chinese paper company, seemingly signaling the end of its ambitious plan to build a $2 billion production facility off U.S. Route 1.

Garrett Hart, Chesterfield's economic development director, says Tranlin didn't renew an option to purchase the 800-acre site for their proposed paper mill off Willis Road. Photo by James HaskinsGarrett Hart, Chesterfield's economic development director, says Tranlin didn't renew an option to purchase the 800-acre site for their proposed paper mill off Willis Road. Photo by James HaskinsThe Virginia Economic Development Partnership’s board of directors voted last week to transfer the property’s title to VEDP and satisfy part of Tranlin Inc.’s $4.85 million outstanding debt.

According to VEDP President and CEO Stephen Moret, the board took action after Tranlin missed the first two installments of a six-month repayment agreement in December and January.

The board also voted to request assistance from the attorney general in collecting the remainder of Tranlin’s obligation, Moret noted via email.

A new provision in the Code of Virginia, which was created through reform legislation in the 2017 General Assembly, gives the VEDP board authority to direct the attorney general to collect unpaid “clawbacks” from companies that receive state economic development incentives.

“We anticipate full repayment to the state as quickly as possible,” wrote Lisa Randall, Tranlin’s associate director of corporate communications, in an email late last week.

“We continue to make steady progress on development of our agricultural markets for fertilizer sales,” she added. “We are a startup company with the typical early-stage challenges, and we’re also a company that has the passion, commitment, and persistence to overcome our challenges and achieve success.”

Tranlin used $3.2 million of a $5 million Governor’s Opportunity Grant to purchase 58 acres in an industrial center near the intersection of Jefferson Davis Highway and Willis Road. It was expected to be the first piece of an 800-acre site on which the company planned to build a state-of-the-art paper plant.

Then-Gov. Terry McAuliffe announced the Tranlin deal in 2014, saying it would bring 2,000 new high-paying jobs to Chesterfield. At the time, Tranlin was expected to receive up to $30 million in state incentives.

Since then, however, the paper plant has been beset by a series of problems.

Tranlin announced last March that Jerry Zhiyuan Peng had stepped down as CEO. It subsequently deferred the first $2 million installment of a state performance grant due to unforeseen project delays.

Still, company officials continued to insist they were moving forward on the Chesterfield paper plant.

Those assurances began to ring hollow last July, when Tranlin committed to repay the entire $5 million grant from VEDP no later than Oct. 24. On that date, it informed state officials that it was facing “short-term cash flow challenges” that would delay repayment.

Tranlin made a payment of $150,000 and committed to pay off the balance, including 10 percent annualized interest, via six monthly installments. The first payment was due Dec. 1.

It also offered the state a first-priority lien on its 58-acre Chesterfield parcel. To secure part of the company’s debt, VEDP executed the lien late last year.

Moret said Tranlin has offered to “facilitate the transfer” of the property to VEDP’s control.

“Despite being late on its repayment obligations, Tranlin remains in regular contact with VEDP officials, and the company continues to commit to repay its debt,” he added.

There is some question about how much Tranlin actually owes. According to Randall, because the company paid more than $3 million for the 58 acres, the property satisfies most of its $4.85 million repayment obligation.

According to county real estate records, however, the parcel is assessed at only $281,000.

It’s unclear why the company was willing to pay 10 times the property’s assessed value. Regardless, last week’s action by the VEDP board means Tranlin no longer owns any property in Chesterfield.

Garrett Hart, the county’s economic development director, informed the Observer earlier this month that Tranlin didn’t renew its option last summer to purchase the remainder of the 800 acres needed for construction of its paper plant.

“We are actively marketing it to other prospects while we continue to talk with Tranlin about their future plans,” he said.

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