One of Huntsville’s top economic recruited companies has filed for bankruptcy for the second time in three years, leaving area governments scrambling to recoup their investments.
Remington Arms, a gun manufacturer who opened a plant in Huntsville in 2014, filed for Chapter 11 protection on Monday in federal bankruptcy court in the Northern Alabama district in what appears to be the demise of the legendary company.
It also appears to culminate what’s been a deteriorating relationship with Huntsville leaders. The Huntsville city council in 2018 restructured its project development agreement with Remington to allow the company some flexibility as it emerged from its first bankruptcy.
In the aftermath of that new deal, though, Remington never followed through on its obligations to inform the city of Huntsville of its employment numbers at the plant, Mayor Tommy Battle told AL.com. Remington was required to have at least 415 people on payroll at the Huntsville plant by the end of 2019 in what was to have been an eventual increase to almost 2,000 employees. Battle said he did not know how many people have been or are still working at the plant
“We gave them until April to turn in the numbers and we’ve been kind of harping on them to get some numbers in but they changed a lot of execs out there so it’s been different people in charge that you have never met or you have to really search out to find out who is in what place out there,” Battle said.
“We feel like they have not met the conditions of their contract.”
Battle and Chip Cherry of the Madison County Industrial Development Board, which worked to bring Remington to Huntsville, said that local governments that provided financial incentives to lure Remington to the Rocket City should be in good shape to recapture those investments.
“When the agreements were made when they came here, we entered into a series of agreements, the community through the IDB, we have series of agreement with them that safeguards those investments,” Cherry said in an interview with AL.com.
The bankruptcy filing does not list “secured” creditors, of which local governments would be a part, Cherry said. “Unsecured” creditors listed in the filing include Huntsville Utilities.
When the Huntsville city council gave Remington a fresh start in November 2018, the agreement called for local governments to recoup $12.5 million in incentives. For the city of Huntsville, specifically, it called for the Remington facility itself to revert to the city.
The Remington deal to come to Huntsville included incentives of $9.5 million from the city of Huntsville, $2 million from the Madison County Commission and $1 million from the Huntsville Industrial Development Board. Remington received $68.9 million in incentives altogether, including from the state of Alabama.
The Remington plant on Wall-Triana Highway near Huntsville International Airport sits on about 112 acres and the plant and the property has been appraised at about $47.3 million, according to county property records.
Both Battle and Cherry said that their immediate concern is for employees at the plant. Given that Remington is seeking to sell its assets rather than reorganizing as it did in its 2018 bankruptcy, Battle and Cherry said the hope is for another tenant – most ideal, another gun manufacturer – would move into the building with the idea of the smoothest transition as possible.
Cherry, also the CEO of the Huntsville-Madison County Chamber of Commerce, described the property as “very marketable” and that Remington had made significant improvements to the building that was obsolete when it first moved in.
“It would be an attractive piece of property if it came to that,” Cherry said.
Battle said there has been some preliminary contact made with the city from companies interested in the property.
“We’re well-secured in this,” he said. “They owe us $10-12 million and that will come out in the final accounting. More than that, we want the jobs and the economy and the investment in the community. They’ve done the start of what they promised us but they have not finished it up. The possibility of a successor company coming in is probably very real.”
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