Duped: Economic development deal in Appomattox turns into elaborate scam

APPOMATTOX COUNTY, Va. (WRIC) — Appomattox Virginia is a historic town known for being a pivotal point in the Civil war, but now another battle looms, the battle for jobs.

In 2014, Gov. Terry McAuliffe posed for a photo where he gave a Chinese company known as Lindenburg Industry $1.4 million in grant money. In return, they were supposed to create hundreds of new jobs in an old factory building that had sat empty for years. Eighteen months later, that town is now left asking where are the jobs and where is all that money.

8FA7BCD5CE73447494E53755FA17B971“I come by here about every morning to see if the gates were open,” said Darrell Bryant, a resident of Appomattox,”I was expecting, hoping to get a job here.”

During a news conference in November of 2014, McAuliffe announced a new business venture coming to Appomattox.

“To bring this Chinese company over here and create 349 new jobs, this is exciting,” said McAuliffe back in 2014.

“I come by here about every morning to see if the gates were open,” said Darrell Bryant, a resident of Appomattox. “I was expecting, hoping to get a job here.”

The new factory would be called Lindenburg. The announcement from McAuliffe came with much fanfare in November 2014. The promise of a once again booming factory employing local workers had the town buzzing.

“A lot of people went and they were hyped up about having new jobs coming in,” said Matthew Grayson, a resident of Appomattox.

Many people in Appomattox say they struggle to find full-time work. Most driving a half-hour to Lynchburg or make the longer trek to Richmond each day.

“To drive six miles to work and six miles home is a big advantage than driving 40 out and 40 back,” said Bryant.

But now the governor’s words appear to ring hollow on the now seemingly abandoned property.9E94D3E6C331494CA49C3D7FDDFEC3AB

“This is the first major jobs announcement we have had in Appomattox in more than 15 years,” said McAuliffe back in 2014.

8News wanted to find out where all that money went, the company got $1.4 million dollars in incentives, no jobs ever came. Through a Freedom of Information Act Request, 8News received more than 3,000 memos, documents, and personal state official emails all detailing the inside workings of the failed Lindenburg venture.

One document we uncovered was a letter from August 2014 from Lindenburg’s  CEO. In that letter, he says they have “been evaluating a number of locations for its new catalyst and industrial honeycomb manufacturing facility.” He goes on to say, “If Appomattox County received an award from the Governor’s Opportunity Fund (GOF) in the total amount of $1,400,000 to assist us with Capital Investments…we are prepared to select Appomattox County for this project.”

The factory would go in the old Thomasville furniture plant.

“This is definitely the biggest employer that has ever been here,” said Bryant.

The offer came over a year after the state was first introduced to what became known as Project Honey.

C6CB3BFFE5AC48639AD4832CCE21E961Fast forward to September 2014 when word comes that the $1.4 million of GOF grant money had been approved.

The following month, in October, the governor is in Beijing meeting with company executives. Note that in the governor’s confidential working papers for that event obtained by 8News, it states that Catalon Chemical Company, Lindenburg’s parent company, is based in Winston-Salem North Carolina. A check of Catalon Chemical’s website at the time has their address at 90 Piedmont Industrial Drive.

Two weeks after that meeting in China, a news release goes out touting an announcement of 349 new jobs coming to Appomattox. A line in that press release reads, “Project is a Direct Result of governor’s meeting with company officials in Beijing, China.” But if the project was a direct result of that China meeting, why was the grant money approved more than a month before. The News release also mentions Virginia successfully competed against North Carolina for the project. But, a former North Carolina economics development official say he knew something wasn’t right when Catalon came knocking.

“Catalon gave us an address in Winston-Salem, and because I had lived and worked in Winston-Salem, I was very familiar with the building,” said Graham Pervier, the former Rockingham County Partnership for Economic and Tourism Development.

Here we are, a year and a half after the big announcement and that ceremonial check presentation under the big top and not one job has been created.

That address that he is talking about is the same one from their website, Pervier did what apparently no Virginia official ever did — he paid them a visit.

“When I visited the address I found that Catalon had no presence there, and through a third party, I inquired through the leasing agent for the building and they knew of no such company,” said Pervier.

No sign of anyone who had even heard of Catalon Chemical, much less Lindenburg.

In addition, Lindenburg went to great lengths to keep the name of that parent company under wraps. In more of those Governor’s Confidential Working Papers we obtained, these from the day the announcement in Appomattox, one “Important Note” appears and it reads, “Lindenburg Industry LLC has stated that NO information about Catalon Chemical and their relationship be mentioned.” It goes on to say this is due to highly competitive issues in the Chinese market.

Pervier says not only did it appear the address was fake but another problem was also raised.

“The company could not give us a corporate identity that was recognizable in North Carolina or for that matter anywhere in the US,” said Pervier.4B1C7DE7A8DF452CB797CC7202F0DE0D

Here we are, a year and a half after the big announcement and that ceremonial check presentation under the big top and not one job has been created.

“I still don’t understand, it just all fell through,” said Ethel Franklin, an Appomattox Resident.

Residents now left only hoping that one day the gates at the former Thomasville factory will swing wide open once again.

And as for all that money, $1.4 million of taxpayer money, all gone never has been returned.

Legal Counsel for the Virginia Economic Development Partnership tells me Lindenburg has said they have no plans to return the money. But it does appear the agency is taking some responsibility for the botched agreement. An email from the COO that was sent to their staff that we obtained reads, “Although our existing process has served us well in the past, it did not do so for the Lindenburg project. Review of the Lindenburg project makes it clear that VEDP did not fully vet this company. We take full ownership of this error.”

Residents now left only hoping that one day the gates at the former Thomasville factory will swing wide open once again.

“I hope we can get it booming again because everybody likes to live where it is prosperity and good things going on,” said Franklin.

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“It’s not good, they need big business to come back, people are looking for jobs and they need big business to come back,” said Grayson.

On Friday the governor’s office provided the following statement:

“Gov. McAuliffe has made it his top priority to build a new Virginia economy, and he’s had more than 670 economic development announcements so far in his term bringing in more than $11 billion in capital investment to Virginia. This is a strong demonstration that economic development incentives bring significant benefits to the Commonwealth’s taxpayers. The Governor is committed to accountability for taxpayer dollars, as he has demonstrated with his reforms to the transportation funding process. Accountability measures for economic development incentives have been re-examined and strengthened this year, and the Governor will continue to demand thorough reviews and protections for public funds directed to economic initiatives.”

Virginia Economic Development Partnership also sent the statement that reads, “VEDP is actively engaged in pursuing all means to recover the Commonwealth’s funds.”

There are now legal proceedings underway to try and recoup the state’s money but still nothing yet has been recovered.

As for the building, it was foreclosed on, bought for a million dollars by a local man, no word on what he plans to do with it. Also, Lindenburg never paid local contractors hundreds of thousands of dollars for work already performed. State Police is now investigating.

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