Maca Plastics Inc., an injection molder that relocated operations from Ohio to Kentucky in February 2018, has breached its grant agreement with JobsOhio and now must repay the amount, according to court documents.
In Ohio, Maca Plastics was ordered Oct. 24 by a Franklin County magistrate to repay a $52,000 grant and roughly $14,000 in attorney fees to JobsOhio, a Columbus-based private nonprofit organization providing financial assistance to companies in order to boost job creation and capital investment in the state.
"It is important to JobsOhio that our dollars go to economic development efforts that can grow jobs and investment for the people of Ohio. The magistrate's decision opens the opportunity for the judge to provide a final order and put these dollars back to work for Ohioans," Matthew Englehart, JobsOhio spokesman, said in an emailed statement to Plastics News.
Maca Plastics may appeal the decision. PN has reached out to the company and its attorney for further comment.
Maca Plastics received the $52,000 grant from JobsOhio in 2014, with a commitment of creating 22 new jobs and retaining 26 jobs at its 25,000-square-foot facility in Winchester, Ohio. According to the agreement, the metrics were to be maintained through Dec. 31, 2017, but were later amended to allow completion of those metric requirements by Dec. 31, 2018.
In February 2018, PN reported Maca Plastics was moving all operations from the Winchester plant to a 122,600-square-foot facility in Maysville, Ky. At the time, Maca Plastics CEO Andrew Culbertson said growth from 2016-17 and difficulty securing a loan to expand in Ohio fueled the relocation.
Maca Plastics was previously awarded up to $2.5 million in tax incentives in 2016 through the Kentucky Economic Development Finance Authority's business investment program. The incentives were part of the company's estimated $7.9 million project to renovate the Maysville plant and add up to 156 jobs.
The company closed the Winchester facility and moved to Maysville on Feb. 28, 2018, according to court documents. JobsOhio filed its lawsuit against Maca Plastics in October 2018.
The court found Maca Plastics had breached its agreement with JobsOhio because it did not keep its facility in Winchester and therefore failed to fulfill terms of the contract by maintaining certain metrics through December 2018.
Maca Plastics argued that its "performance of the contract was impossible due to its inability to secure additional financing to expand its facility in Ohio," according to court documents. The court did not accept the company's argument as a valid reason for defaulting on the contract.
"JobsOhio monitors these projects to ensure recipients are accountable for job creation, payroll, [and] fixed asset investment committed to in their grant and loan agreements," Englehart said.
As part of the agreement, companies are required to report to JobsOhio at least once a year on their progress toward achieving those metric commitments. The metric commitments must be attained by a date specified in the agreements and must be maintained for a two-year period thereafter, ending on their metric expiration date, he explained.
"When metric commitments are not met, however, we work closely with those companies to find solutions to challenges they may face, so they can continue to grow in Ohio," Englehart said.
He added: "We take the stewardship of our dollars very seriously because they go to supporting jobs and investment to Ohioans. So, if companies fail to meet their agreed commitments and we've exhausted all options to help them grow in Ohio, we will claw back our dollars, so they can be used for future economic development projects to benefit Ohioans."