Del. Will Morefield has heard the skepticism about a project that maybe seemed too good to be true.
A salmon farm, on a rocky hillside, in Virginia’s landlocked coalfields? A $300 million investment? A building the size of 13 football fields? More than 200 jobs with above-average pay?
And as a year, two years, five years passed with no visible signs of progress at the Tazewell County site, the questions got more pointed.
“There were many nights where I was on the phone at 11, 12, past midnight, trying to explain to people that the project was not dying,” said Morefield, a Republican who represents the 3rd House of Delegates district, and who had first brought the aquaculture idea to the region in 2013.
In fact, he said, Project Jonah was coming to life, but quietly: The industrial farm that would produce up to 20,000 tons of Atlantic salmon a year would be one of the largest private capital investments in the history of Southwest Virginia. A “real game-changer” for the coalfields, he believed.
And finally, this spring, earth started to move.
“I still think today there are people that believe it’s too good to be true or will never happen,” Morefield said. “But how much more convincing can you be than construction crews moving a mountain?”
* * *
The seeds for Project Jonah were planted, perhaps fittingly, while Morefield was in Israel.
In 2013, on a visit sponsored by the American Israel Public Affairs Committee, Morefield met executives from AquaMaof Aquaculture Technologies, a company that was supplying technology for commercial aquaculture facilities around the world, including one that was under construction in Israel.
He said he immediately saw the potential for a similar project for the coalfields.
“The scale of the project was proof to me that the technology was proven,” he said. “And if they could build it in the desert of Israel, there was no reason why they couldn’t build it in the mountains of Virginia.”
The timing certainly seemed right for an economic influx. Between 2010 and 2019, Tazewell County’s population dropped by almost 10%, Russell County’s by more than 8%, Buchanan County’s by nearly 13%, according to census figures. Coal jobs were disappearing, young people were moving away.
In 2013, the year Morefield visited Israel, Virginia’s jobless was 5.6%; in those three coalfields counties, it ranged from 8.3% to 10.8%.
When Morefield got home, he started making connections.
Tom Lester, a friend of his who at the time was a consultant working with companies around the region, suggested bringing Virginia Tech into the fold. University researchers and economic development staff had helped Lester vet projects in the past, he said. And a project of this potential magnitude needed expert assistance.
They connected with Dave Kuhn, an assistant professor and researcher in Tech’s Department of Food Science and Technology. As the business plan came together, Kuhn reviewed the technical aspects of the proposal, everything from how the fish would be fed to whether consumers would want to buy the salmon that would be produced.
He was intrigued, Kuhn recalled recently, but also – at least at first – skeptical. Doubt turned into excitement as he delved into the details, he said: The team had a good plan, the right people, a solid market. In the end, he and the Tech team supported the project with letters and visits to local governments.
Having that seal of approval “certainly eased a lot of minds, including my own,” Morefield said.
They began talking to local officials and looking for land. Several sites in Buchanan County were considered but ended up out of the running for various engineering reasons, said Lester, who’s now chairman of the Tazewell County Board of Supervisors. They eventually settled on 200 acres near Southwest Virginia Community College, straddling Tazewell and Russell counties.
* * *
While local officials were vetting the project and looking for land, project backers were on the hunt for funding.
The Tazewell project became one part of a global plan to produce hundreds of thousands of tons of Atlantic salmon a year. According to Undercurrent News, which covers the seafood industry, Pure Salmon aims to produce 260,000 tons of Atlantic salmon annually by 2025.
Lala Korall, a consultant who has been involved with the Tazewell project since the early days, and to whom questions about its history were referred, did not answer a number of emailed questions about it chronology. But Undercurrent News, SeafoodSource and other industry publications have reported on Pure Salmon’s trajectory over the last several years.
Pure Salmon was created by a Singapore-based private equity manager called 8F Asset Management, which in November 2018 announced plans for an industrial-sized fish farm in Japan that would be operated by the company, Undercurrent News reported.
At the time, 8F and AquaMaof co-owned a small-scale production facility in Poland that primarily was used for R&D, the publication reported.
In fall of 2019, Undercurrent News reported that 8F planned to invest $1.6 billion in land-based fish facilities around the world – including, it later was announced, the one in Tazewell. By the following March, 8F had completed the first round of fundraising for Pure Salmon’s rollout, raising $358.8 million for projects in Japan, France and the U.S., Undercurrent News and SeafoodSource reported.
The facilities will use AquaMaof technology. In January 2020, Undercurrent News reported that the Israeli company would hold a 5% equity stake in the projects.
All of this was going on behind the scenes. In Southwest Virginia, as years went by, skepticism grew.
Morefield acknowledged that the project was moving at what many people would have perceived as “a snail’s pace.”
“But in reality, because of the size of the project, it was something that we expected from early on,” he said.
The supporters of the Tazewell project needed to keep everyone on board. In 2015, local officials, including Young and several members of the board of supervisors, were taken to Poland and Israel to tour existing aquaculture facilities and to meet with AquaMaof executives.
The trip helped rebuild support, Young said.
“It is quite standard for large projects, whether construction or industry to take 7 to 10 years from the initial idea till the opening of a facility or premises,” Korall wrote in an email. “This project came to the public’s awareness extremely early in the process and this is why it seems that it took a long time.”
* * *
Even as Morefield and others were working to build – and maintain – excitement for the project in Southwest Virginia, the commonwealth wasn’t Pure Salmon’s only suitor. Virginia was in competition with at least one other site, in South Carolina, which was being aggressive with incentives, Lester said.
From the company’s perspective, Southwest Virginia offered several selling points, said Paul Inskeep, who’s managing the project for Pure Salmon.
Its temperate climate, for one. Salmon are kept in water that’s about 51 degrees; the hotter the outside temperature, the more difficult it is to maintain that level. Low energy and labor costs factored into the decision as well, Inskeep said, as did the fact that Southwest Virginia is close to major markets like New York and Washington was a plus.
State and local incentives also were part of the deal.
Assuming it meets hiring and investment benchmarks, the project will receive $10 million from the Virginia Coalfield Economic Development Authority, money that likely will be used for job training, Morefield said.
It will get about $1 million from the Commonwealth’s Development Opportunity Fund, $1.5 million from the state tobacco commission and several local incentives: a machine and tools tax grant of $900,000 over up to five years, and a grant equal to the first three years of real estate and personal property tax.
Tazewell County Administrator Eric Young said the amount of that grant will depend on the final assessment of the property, but he anticipates it will amount to about $780,000 annually.
None of the counties on its own could provide enough economic incentives to attract a large-scale project, Young said. And since residents of all of the counties would work at the facility, it made sense to share both the expenses and the revenues, he said.
So in 2017, Russell, Tazewell and Buchanan counties created the Cumberland Industrial Facilities Authority. Each locality committed to lending the company $1 million, and the three counties signed a revenue-sharing agreement to split the tax proceeds.
(Last month, the authority voted to add Dickenson County to its membership, Young said; the county is not yet part of the agreement for the Pure Salmon project.)
Tazewell County also will have to make improvements to its water system, at a cost of about $7.9 million, to provide the water that the facility will need, Young said.
The facility could use up to 400,000 gallons a day initially for filling the tanks, and then occasionally for cleaning or flushing them, he said; the normal day-to-day use likely will be much less.
The county’s water plans, which were designed in the late 1980s and early ‘90s, predicted that the population would grow over the following decades, he said. In fact, population started to decline in the 1990s, leaving the county with many fewer residents than planned for – and some excess water capacity.
The county water plant that’s closest to the Pure Salmon site can provide about 200,000 gallons a day, he said. An interconnection will be built with the town of Richlands’ water system to provide the rest.
The county has applied for more than $7 million in grants, said Young, who expects it will receive somewhere between $4 million and $7 million. The balance will be amortized and included in the project’s monthly water and sewer bill, he said.
According to a performance agreement signed in September 2020 for the Commonwealth’s Development Opportunity Fund money, the company must invest at least $198 million and create at least 218 jobs that pay an average of at least $59,000 (including executive jobs) to get the funds. The average annual wage in Tazewell County is $36,000, the agreement said.
* * *
Once the Pure Salmon facility is up and running, thousands of tons of Atlantic salmon will be raised, harvested and processed every year without ever leaving the building where they hatched.
Vertically integrated systems like the one Pure Salmon plans to build in Virginia require a significant upfront investment but are becoming the norm for large aquaculture operations, Kuhn said. Keeping everything from eggs to processing under one roof minimizes risk of illness – hatchlings aren’t brought in from outside suppliers, lessening the likelihood of diseases being introduced – and increases the producer’s control over factors such as genetics.
Control over the salmon’s environment also will be maximized with a recirculating aquaculture system. Instead of living outdoors, the fish will grow to harvestable size over the course of 18 to 24 months in a series of enclosed tanks. Waste will be filtered out of the water, most of which can then be reused in the tanks. Water temperature can be maintained to an exact degree, food is monitored, and pests and pathogens can be kept at bay.
“The population is growing really fast right now, and the demand for seafood is not going away,” said Kuhn, who has worked with other seafood businesses, including a tilapia farm in Martinsville and hatcheries on the coast. “Aquaculture is taking up that demand, and it needs to.”
Globally, aquaculture is a growing business; according to the United Nations Food and Agriculture Organization, aquaculture supplies more than half of the world’s fish for human consumption.
Relatively little of it is done in the U.S. Domestic aquaculture production hit 680 million pounds in 2018, up 7.8% from 2017, according to the National Oceanic and Atmospheric Administration. But the U.S. ranks just 17th in production worldwide; China, Indonesia and India are the top three, with China alone accounting for nearly 58% of the global total.
In the U.S., Atlantic salmon is one of the top marine aquaculture species, behind only oysters and clams, according to NOAA. In 2018, the U.S. produced 36.4 million pounds of the popular fish, valued at $66.5 million, the agency reported.
* * *
Hiring for the plant is expected to start in late 2023, Inskeep said; construction jobs will come much sooner.
While the company likely will fill some executive and specialist jobs from outside – the facility will need veterinarians who specialize in fish, for instance – the majority of the staff will be on the food processing side of the operation, and the plan is to hire for those positions locally, he said.
Kuhn is working with the community college to develop a curriculum for new hires. He said he hopes it could eventually expand beyond aquaculture-specific training – perhaps to prepare students for jobs in water treatment plants, for example.
Young, the county administrator, knows that the creation of 200-odd jobs wouldn’t even rate a mention in some localities. But in a region like the coalfields, it could be transformative, he believes.
“The impact here of those number of jobs at above minimum wage pay will be extraordinary,” he said. “That hopefully will stop the out-migration of our people. Because we’re losing a lot of people in search of opportunity, and it gives them a reason to stay, which is important. I feel like we can tell our kids now that there’s a future here, and we can believe it.”
He understands why some people lost faith as years passed.
“What we were going through here locally made it really hard, because people began to see this as sort of the salvation of the area, and they became more anxious for it,” he said.
“The coal economy began to really nosedive about the same time this project started, and when you’ve got people moving out, schools closing and businesses closing, and you keep saying ‘This thing’s coming’ – well, they’re wanting to know when, because they want it tomorrow. And you know it’s not going to be tomorrow.”
Lester said he can take a longer view now that earth is being moved at the site and the community can see progress.
“It was easy to say that we were starting to lose hope,” he said. “Project Jonah – you know, you think it’s a story about a fish, but Project Jonah is a story about faith, and about giving up and not believing any more and just saying, ‘I’m not going to do it, I’m done with this.’
“Instead Jonah redeems himself, and that’s what this project is. It’s a project of faith, and we’re redeeming ourselves. We’re going to come out of this stronger. We’re now truly diversifying. … We’re moving from energy [production] back to food, which is what the county originally started with before coal was here. I think it’s a wonderful story of redemption and hope.”