HOPEWELL, VA (WWBT) - The state's first major barley-based ethanol plant is now up for sale. Osage Bio Energy says it's throwing in the towel on its ethanol plant in Hopewell.
The move will result in just about all of the plant's 55 employees being laid-off, starting Wednesday. City leaders say the timing of the sale is "strange" especially since the plant never officially opened for business.
The $160 million facility was supposed to produce 65 million gallons of ethanol a year -- but that never happened. In fact, the plant never launched production.
"We'd like to see a sale as quickly as possible," said Hopewell Mayor, Christina Luman-Bailey.
Luman-Bailey expected the plant to generate $2 million a year in revenue for the city. Now, that's on hold.
"There's nothing uncommon about an industry being sold. It happens all the time - industries being bought and sold. This is a little sooner I think than anyone expected, " she added.
As a result of the pending sale there will be a dramatic reduction in force at the plant.
"They will not be producing so it'll be down to a skeletal crew," said Luman-Bailey.
In a statement Osage Bio Energy says, "After a review of strategic alternatives it's board of directors decided to market the company for sale."
The plant has been a source of controversy since construction got underway in 2008. There have been issues over contaminated soil. Many residents continue to be concerned about safety. Last year there was a small explosion at the plant.
Osage Bio Energy has not given an exact reason for putting the plant up for sale.
"I'm thankful we have industry that's not shutting down for good in Hopewell. I'm glad we have industry up and running and this one being for sale and not just abandoned," said Luman-Bailey.
The plant is fully functional and production ready. Calls to Osage Bio Energy were not returned.