Commissioner Patrick Qualls in his motion to deny relief on the late penalties said, “Seeing they’re behind on their timeline I make the motion we deny the request.”
Commissioner Marcelle Smith cast the second and the motion passed unanimously.
In his motion Qualls referred to a series of construction delays which goes back to the time the county deeded the land to Klausner in January of 2014 for a lumber mill in Enfield.
The mill is slated to bring 350 jobs within three years.
Qualls said once the land was deeded the company had two years to commence operations. He said the last promised opening was the end of June.
County Tax Assessor Shane Lynch explained in a document to the board the Halifax County listing period was January 1 until February 1 for tax years 2016 and 2017.
The law allows businesses to request in writing during the regular listing period an extension until April 15 of the tax year.
State law allows the assessor and tax collector to add a 10 percent penalty to the amount of tax on the personal property listed late or not at all. The same statute gives the board the authority to compromise, settle, or adjust the taxes and penalty. Klausner, in a letter dated August 23, asked to have the penalty compromised for the tax years 2016 and 2017.
Lynch noted in the document Klausner Lumber did not timely list or request an extension for the tax years 2016 and 2017.
The tax assessor sent a notice of discovery on June 15, 2016, for Klausner's 2016 business personal property assessment at a value of $50,000,000 since no actual listing had been submitted.
The tax collector sent a discovery bill including a 10 percent penalty on that value on August 19, 2016, since that value had not been appealed.
The tax assessor used the same value plus 10 percent late list penalty to tax the business personal property for 2017.
The 2017 tax bill was Klausner's notice of value for the 2017 tax year. This value was then released per a verbal agreement to use the 2016 BPP value of $44,719,984 until a 2017 listing is provided.
Klausner submitted its 2016 business personal property listing on June 15.
Its 2016 listed value of $44,719,984 was lower than the original discovered value of $50,000,000 so an adjustment was made to the 2016 bill.
The 10 percent penalty remained on the adjusted value. Klausner then paid the amount of the principal tax and interest but not the amount of the penalty.
As today, no 2017 business personal property listing has been filed.
Klausner President of International Business Development Thomas Mende explained to commissioners there was “no real good explanation” for the dilemma. “Our CFO is in Austria and our experience with property tax in Florida (where the company has a lumber mill) is we don’t list it when it’s not in operation. We are asking for consideration.”
In the preface of his motion Qualls told Mende, “The county expects to have a return on its investment and you’re severely behind producing the jobs and the taxable revenue that goes behind it.”
Later in the meeting, commissioners gave Mende an opportunity to discuss the delays in the plant opening.
The company, he said, “ran into huge problems” both mechanically and electrically with equipment at its Florida plant. “It’s taken a very long time. All the equipment is tied together. It’s a complicated system. We’re looking at production (in Enfield) at the end of March.”
Essentially, the equipment problems come down to the company not wanting to make the same mistakes in Enfield which have occurred with its log yard in Florida.
The project has also been beset with construction and vendor issues.
Mende admitted following his presentation, “It’s been too long. I can’t give you the reasons. It’s taken too long.”
After giving his explanation for the delays, Mende listened to the response of the board members.
“We’ve invested millions in county, state and federal dollars in anticipation of jobs,” Qualls said. “The people look to us to spend their money wisely. They have entrusted us to spend their money for economic development. It’s important that when we do spend their money that we get the return on the investment.”
Qualls asked Mende, “When somebody on the streets asks me if you are going to open in April and I say, ‘Yes, I’m telling the truth,’ am I?”
Mende responded yes.
Board Chair Vernon Bryant said, “We want to be transparent. We want to be open and upfront. We have lost jobs in the southern end of the county. That part really needs jobs.”
Klausner, Bryant said, “They’re about two years behind. That should have been opened before Safelite closed. We have fulfilled our obligations.”
Bryant did say he is optimistic the facility will be opened by this coming April.
Commissioner Rives Manning told Mende the company has to have it’s personal property listed in January.
Smith said, “We need to take a look at the plant. That will ease my mind. It’s going to stew until April.”
County Manager Tony Brown said he has toured the facility. “I was very impressed. It’s not an easy process.”
Commissioner Linda Brewer, who has been on the board a year, said of the many issues the county faces, Klausner, “Has been the most asked question. We need the jobs. I really thought it would happen before I turned up in this room.”
County Economic Development Director Cathy Scott said, “I have confidence it will open.”