Huntsville recoups investment in Remington arms agreement
HUNTSVILLE – The City of Huntsville and its regional partners have recovered $12.5 million in incentives offered to former firearms manufacturer Remington Arms in 2014, said city officials Friday.
The nearly 200-year-old firearms manufacturer filed for bankruptcy in October 2020, resulting in the sale and auction of its assets. The recent sale of Remington’s 800,000-square-foot facility on Electronics Boulevard enabled the Cities of Huntsville and Athens, Madison County, Morgan County, Limestone County, and the Limestone County Economic Development Association to recoup their joint investment, along with legal fees.
“This is the best good news, bad news story,” said Chip Cherry, CEO of the Huntsville/Madison County Chamber of Commerce. “The mechanisms put in place to protect the public investment in the project worked. The funds to cover the mortgage obligation have been received.”
Mayor Tommy Battle credited the diligent work of the economic development recruitment team in making certain the community and its taxpayers were protected.
“You don’t see this happen very often,” Mayor Battle said. “Despite the difficult outcome for Remington, their decision to locate in Huntsville and the years they were in operation provided millions of dollars in payroll and put the City on the map for advanced manufacturing. Because of Remington, we were on the radar of the site selection consultants which resulted in many projects selecting the Huntsville area for their projects. We’ve gotten our money back and more.”
There was significant regional excitement surrounding Remington Outdoor Company’s February 2014 announcement that it had chosen Huntsville as the site for its consolidated operations. The company’s commitment to provide up to 2,000 jobs (1,868 guaranteed) and invest nearly $111 million in plant operations was a significant step forward in regional efforts to create advanced manufacturing jobs.
Cherry explained that prior to Remington’s announcement, significant behind-the-scenes efforts helped protect the public sector’s investment. Those efforts also ensured the company could earn their incentives through investment, job creation, and paying a competitive wage.
“The structure of securing the property with a mortgage was the path chosen, where the company could have all or part of their annual payment forgiven through performance,” he said. “Both the community and the company agreed that this was the best approach, and the details became part of the Project Development Agreement (PDA) and the mortgage.”
For the first three years, Remington met its performance targets. It exceeded its investment target of $110.9 million and met early ramp-up targets for jobs and wages. At one point, prior to the company’s downturn, the Huntsville facility employed more than 500 people with an average wage above the $19.50 average required by the PDA. In late 2017, however, it was announced the company would not meet target employment numbers.
In early 2018, Remington filed for Chapter 11 bankruptcy, which provided financial relief during reorganization. The company ultimately failed to stabilize and filed for Chapter 13 bankruptcy in 2020.
“We are fortunate the region’s robust economy provided numerous opportunities for those who lost their jobs when Remington ceased operations,” Mayor Battle said. “The mechanisms we used to protect the public investment in the project worked, and our region is now a prime location for advanced manufacturing.”
The recovered funds will be used to advance ongoing efforts to provide additional economic development opportunities for new jobs in the region.