LAWTON — City officials signed off recently on a revised redevelopment agreement with Westwin Elements, the Delaware-based company that wants to build a cobalt refinery in Lawton.
In a special meeting, the Lawton City Council voted 8-0 Aug. 16 to approve the revised agreement, which calls for Westwin to build a pilot plant – essentially, a scaled-down version of the original facility – in Lawton. The pilot plant will still process cobalt, nickel and other minerals, but on a much smaller scale than originally planned.
The new agreement is a better deal for the city than the first one was, said Councilman Randy Warren.
“I have great faith in Westwin,” he said. “I believe that they’re going to be going full steam come this time next year.”
The council vote capped a day of meetings in which the Lawton-Fort Sill Economic Development Corp., the CCIDA and the Lawton Economic Development Authority all approved the revised agreement. Unlike the city and the other entities, LEDC was not part of the agreement but acted as a facilitator during negotiations.
Banking study
Westwin recently expanded its team by adding people who have experience in building and operating similar refineries, said LEDC Chairman Barry Ezerski. He said the company also recruited some well-known people for its board of directors, including former Boeing CEO Dennis Muilenburg.
When Westwin officials realized they needed to build a pilot plant, they asked the city for assistance. That request led to a series of meetings involving the attorneys for both sides, city leaders and representatives of the Lawton Economic Development Corp., the CCIDA and the LEDA.
Those meetings resulted in the revised agreement.
Negotiators wanted to deliver a big win for Lawton-Fort Sill and Comanche County while protecting taxpayers’ interests, Ezerski said. He said he thought the new agreement satisfied those requirements.
“We feel it’s a fair agreement, and we feel this is great for Lawton-Fort Sill and for the Comanche County area,” he said.
As part of their amended agreement with Westwin, the city and the CCIDA will loan the company $3 million, which may be spent only on construction of the pilot plant. The city will contribute $1 million to the project, while CCIDA will kick in the remaining $2 million.
The loan will not increase the total amount of the original package of incentives, approximately $24 million.
The CCIDA will also transfer a 480-acre parcel of land that the authority owns to the Lawton Economic Development Authority, which will lease 40 acres of the property to Westwin. LEDA will also be in charge of releasing the $3 million loan to Westwin.
The pilot plant will be built south of the west industrial park on West Lee Boulevard. The company must begin construction by Oct. 1 of this year and finish building the plant by March 1, 2024.
The agreement requires Westwin to invest at least $6 million in equipment and machinery for the plant. The plant will employ at least 40 full-time employees in 2024 and at least 45 more people by 2026, for a total of 85 employees.
The company will use data from the pilot plant for a bankable feasibility study, an in-depth examination of a project’s potential to succeed. Bankable feasibility studies provide bankers and investors with the information they need to decide whether to loan money to a project.
In this case, Westwin needs the study to help the company secure additional financing for its original project. Westwin is expected to finish the study within two years, which will allow the company to finish its financing, meet additional benchmarks and start work on the larger plant.
If the deal falls through during construction of the pilot plant, the company will transfer all design plans and other construction-related documents to LEDA so the authority can finish the building.
That is an important element of the agreement, because Lawton needs buildings that can be leased or sell to other companies in the future, Ezerski said.
“For us to have that is definitely an asset,” he said. “So we did that for protection as well.”
Ezerski said Westwin originally planned to invest at least $450 million in constructing and equipping the large-scale plant, but that amount has risen to approximately $732.5 million. Westwin is also willing to issue 30 shares of unrestricted common stock, currently valued at about $400,000, to LEDC.
“That would then be given to LEDC to start our kitty to try to work on future economic development,” Ezerski said.
Westwin originally pledged to create 2,335 jobs over the first five years of operation, but those numbers have changed. The company has since determined that it can guarantee 735 jobs in the first five years, which includes 85 employees at the pilot plant.
“Even 735 jobs is just going to be exponentially increasing the amount of jobs that are developed in the community because of this plant – both retail, restaurants, et cetera,” Ezerski said.