Hoku Materials (HOKU) Signs Economic Development Agreement With Pocatello

Hoku Materials just announced a new economic development agreement with the City of Pocatello. The deal could grant Hoku up to $49 million worth of tax increment financing. Under the terms of the contract, Hoku will get up to $26 million in incremental property tax reimbursement to cover its capital costs from setting up a polysilicon production plant in Pocatello. Then, as long as Hoku hires a certain number of employees, the company will become eligible to receive up to 50% of their incremental property taxes back, with a cap of $17 million. The amount of reimbursement will be reduced to match the amount that the city spends constructing a public road alongside the new plant.

In a press release, Hoku’s CEO and Pocatello’s Mayor commented on the deal:

"We are pleased to have formalized this agreement with the City of Pocatello," said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. "While the tax increment financing is very important to us, perhaps more important is the strong support we continue to receive from the City of Pocatello and the State of Idaho. We are thankful and honored to be a part of the greater Pocatello community."

Pocatello mayor, Roger Chase, added, "The City of Pocatello continues to be impressed by Hoku’s efforts. We believe strongly in sustainable, diversified economic development for our community, and plan to continue our focus on advancing renewable energy initiatives in Pocatello, Chubbuck, and Bannock County."

Hoku also announced that it has reached agreements with four major vendors. Here are the details, from the press release:

In addition, Hoku reported today that it had reached separate agreements with four key vendors: Idaho Power Company, Polymet Alloys, Inc., BHS Acquisitions, LLC, and AEG Power Solutions USA, Inc., formerly known as Saft Power Systems USA, Inc.

Owing to recent revisions to the timing and amount of prepayment deposits expected by Hoku from some of its polysilicon customers, Hoku had previously announced that it had begun adjusting its construction and procurement schedule in order to more closely match its cash outflows with these expected receipts. The Company explained that the vendor contract amendments announced today were reached in order to better align Hoku’s capital expenditures and supply chain purchase obligations to this revised schedule.

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