A Nevada rocket fuel chemical manufacturer will relocate a portion of its operations in southern Utah, Gov. Norm Bangerter announced Wednesday, bringing a total of 150 jobs to Iron County.
Officials of Pacific Engineering and Production Co. said at a Wednesday press conference they selected a 4,800-acre site about 15 miles west of Cedar City because it would be quicker to rebuild there than to rebuild in Nevada.The announcement comes one week after the Legislature met in special session to change the law so state bonds could be issued for the $23 million plant, which will resume production of a chemical considered vital to the nation's space and military programs.
PEPCON was one of only two U.S. manufacturers of ammonium perchlorate, an ingredient in solid rocket fuel, until a series of explosions destroyed its Henderson, Nev., plant in May.
The company had set an Aug. 1 deadline for construction to begin on the new plant to avoid a critical national shortage of the chemical. PEPCON has promised the government it will be operating again by Feb. 1.
Both Hercules and Morton Thiokol have said that unless PEPCON is back in production by early next year, their supplies of ammonium perchlorate will be depleted and workers will have to be laid off.
The company will initially employ about 70 workers in Utah, growing to a work force of 150. At least 15 employees of the Henderson Plant are expected to relocate to Cedar City. The portion of the manufacturing process that will remain at a yet-to-be-decided Nevada location will employ between 15 to 20 workers.
Iron County officials praised the new company, saying they expected it to attract other industry to the area, which is suffering from a sagging economy. Company officials said Wednesday they have not decided whether to use the financing mechanism, approved by Utah lawmakers, or to secure money to build the plant from First Interstate Bank.
PEPCON would repay the taxable industrial revenue bonds Utah has agreed to issue through a surcharge on the chemical. The state would not assume financial responsibility for the repayment of the bonds, but would use its good credit rating to ensure a favorable borrowing rate.
The two sites considered in Nevada are both in isolated portions of the state's most populous county, Clark County. One is on an Indian reservation and a second is near the Lincoln County line.
Nevada could only offer the same taxable industrial revenue bonds through its Commerce Department that Utah lawmakers will allow to be issued through the Utah Housing Finance Agency.
The only other incentive Nevada might have been able to offer is cooperation from Clark County officials for building and other necessary permits, according to that state's head of economic development, Andrew Grose.
That cooperation might not be politically expedient for county officials, who must contend with residents who don't want a repeat of the earthquake-force explosion on May 4 that killed two workers and injured more than 350, he said.
Cedar City officials, on the other hand, are ready to welcome the plant with open arms. They have said that the jobs PEPCON would bring to the depressed Iron County economy are more than enough incentive to overlook potential danger.
Rep. Haze Hunter, R-Cedar City, who sponsored the bonding bill in the special session, said that the plant will likely draw other businesses to Iron County.
PEPCON officials have said that they would like to develop an industrial park on a portion of the Cedar City site. Another subsidiary of PEPCON's parent company is developing an industrial park on the site of the former plant.