A Henderson, Nev., rocket fuel manufacturer could decide as soon as Friday whether to relocate in Cedar City, now that the Utah Legislature has paved the way during a special session.
Utah Lawmakers Wednesday overwhelmingly authorized the Utah Housing Finance Agency to issue $33 million in taxable industrial revenue bonds that would be used to rebuild the plant destroyed in a blast last May."I think we're sitting in first place now," said Rep. Haze Hunter, R-Cedar
City. "The only thing that could happen now is if the state of Nevada comes to them with an offer we can't meet."
But Nevada officials said Wednesday they won't give up without a fight. Nevada Economic Development Director Andy Grose said a 1987 law allows Nevada to offer PEPCON the same type of bond financing.
Two other prospective sites are in Nevada, but PEPCON officials seem inclined to come to Utah.
"I personally think Iron County is the best alternative," Keith Rooker,
PEPCON vice president and general counsel, told Utah lawmakers.
Grose agreed the company must act to ensure its survival. He said a key element in the decision will be the speed with which the company can get the permits and licenses to start building. He said they must be in production early next year.
"I know they feel a tremendous loyalty to the state of Nevada, but it's a question of their survival as a company," said Grose.
He said the company has a "feeling of greater assurance" they can meet the deadline in Utah.
Rooker said that the board of directors of the parent company of PEPCON, American Pacific, will choose a site within the next few days. He said that while financing was not the most important issue in the relocation decision, no single issue will be decisive.
PEPCON makes the ammonium perchlorate used by Hercules and Morton Thiokol in the production of solid rocket fuel. Representatives of both Northern Utah companies warned Wednesday that layoffs are imminent unless PEPCON resumes production by early 1989.
Both companies expressed their enthusiastic support for a PEPCON move to Utah, saying it would enhance Utah's image as a leader in the aerospace industry.
The authority to issue the bonds, sought by Hunter, did not come without heated debate. Some lawmakers questioned the wisdom of state involvement in financing private development.
Gov. Norm Bangerter and others, however, countered that the state should use all of its resources to enhance economic development, including the issuance of industrial revenue bonds.
"The risk is well worth taking and its not much of a risk at that," the governor said during a Senate caucus. "We have to move with the times and circumstances if we want to be competitive with our sister states."
Usually, local governments issue industrial revenue bonds to encourage economic development. Industrial revenue bonds allow a government entity to lend its credit rating to a private company without assuming financial responsibility for the repayment of the loan. This is first time the state has assumed that authority.
The vehicle chosen by lawmakers to issue the bonds, the Utah Housing Finance Agency, to date has only used its resources to provide low-cost housing loans. Concern was also raised over giving the agency additional powers.
"I see there are two groups of you here," Rooker said during a Senate caucus. "One of you is afraid the camel is going to get his nose in the tent, and the other is afraid the whole camel won't get in the tent."
Lawmakers pledged to address the agency's role in future economic development efforts when they convene in January. Meanwhile, they approved changes requested by House Majority Leader Nolan Kar-ras, R-Roy, that gave the state greater oversight of the agency.
That seemed to calm most fears of whether the state should be involved in the project at all, or should leave the issuance of the bonds up to Iron County. Hunter said the county did not have the expertise to issue the bonds.
Sen. John P. Holmgren, R-Bear River, said, "We may not be perfect in what we're doing, but we need to support the space industry in our state and get it up and running again."
The House voted 63-2 in favor of the measure, and the Senate voted 23-1.
Rooker said PEPCON would develop an industrial park on the 4,800-acre site 15 miles northwest of Cedar City, bringing other new industry to the area. The ammonium perchlorate plant alone will employ 200 workers within two years.