HUNTSVILLE – The City of Huntsville and its regional partners clawed back $ 12.5 million in incentives offered to former gunmaker Remington Arms in 2014, city officials said on Friday.
The nearly 200-year-old gunmaker filed for bankruptcy in October 2020, leading to the sale and auction of its assets. The recent sale of Remington’s 800,000 square foot facility on Electronics Boulevard enabled the cities of Huntsville and Athens, Madison County, Morgan County, Limestone County and the Limestone County Economic Development Association to recover their joint investment, as well as legal costs.
“This is the best good news, the bad news,” said Chip Cherry, CEO of the Huntsville / Madison County Chamber of Commerce. “The mechanisms put in place to protect public investment in the project have worked. The funds to cover the mortgage obligation have been received.
Mayor Tommy Battle acknowledged the diligent work of the Economic Development recruiting team to ensure the community and its taxpayers are protected.
“You don’t see this happening very often,” said Mayor Battle. “Despite the difficult outcome for Remington, their decision to relocate to Huntsville and years of operation generated millions of dollars in wages and put the city on the map of advanced manufacturing. Because of Remington, we were on the radar of site selection consultants, which led many projects to select the Huntsville area for their projects. We got our money back and more.
The announcement by Remington Outdoor Company in February 2014 that it had selected Huntsville as the location for its consolidated operations generated great enthusiasm in the region. The company’s commitment to create up to 2,000 jobs (1,868 guaranteed) and invest nearly $ 111 million in the operation of the plant was an important step in regional efforts to create advanced manufacturing jobs.
Cherry explained that before Remington’s announcement, significant behind-the-scenes efforts helped protect public sector investment. These efforts have also enabled the company to earn its incentives through investments, job creation and payment of a competitive salary.
“The structure of securing the property with a mortgage was the chosen route, where the company could see all or part of its annual payment canceled through performance,” he said. “The community and the company agreed this was the best approach, and the details were incorporated into the Project Development Agreement (PDA) and mortgage. “
In the first three years, Remington achieved its performance targets. It exceeded its investment target of $ 110.9 million and met its quick start goals for jobs and wages. At one point, before the business downturn, the Huntsville plant employed more than 500 people with an average salary above the $ 19.50 average demanded by the PDA. At the end of 2017, however, it was announced that the company would not meet the target number of jobs.
In early 2018, Remington filed for Chapter 11 bankruptcy, which provided financial relief during the reorganization. The company ultimately failed to stabilize and filed for Chapter 13 bankruptcy in 2020.
“We are fortunate that the region’s robust economy provided many opportunities for those who lost their jobs when Remington went out of business,” said Mayor Battle. “The mechanisms we used to protect public investment in the project worked, and our region is now a prime location for advanced manufacturing. “
The funds recovered will be used to advance ongoing efforts to provide additional economic development opportunities for new jobs in the region.