News & Observer | newsobserver.com | Chicken plant proposal tied to failed 1980 project

Published: May 15, 2008 08:51 PM
Modified: May 15, 2008 08:54 PM

Chicken plant proposal tied to failed 1980 project

 

Story Tools

Advertisements
The company asking Siler City to sweeten a chicken plant deal has connections to a firm that asked the state nearly 30 years ago to loan it money for a $550 million aluminum plant that never got built.

In 1980, Coastal and Offshore Plant Systems Inc. said it would build an aluminum smelter and create 1,000 jobs in Columbus County.

Last month, an Atlanta company called IIG Management Inc. told Siler City it wanted to buy a chicken processor that is scheduled to close and put 836 people out of work. The company's chief financial officer asked Town Manager Joel Brower last week how the town could make the deal "financially attractive."

IIG Management says it is a private equity firm with four funds, one called Coastal Offshore Metallcon Group.

In the Coastal Offshore Metallcon portion of IIG's Web site, slides show projects that the company says it has built, including aluminum plants, and drawings labeled "Coastal Offshore Plant Systems Inc." or "Coastal + Offshore Plant Systems" -- the same name as the 1980 company.

IIG Management is run by a man named Jerome D. Hoffman.

The 1980 company was run by a man who first called himself D.J. Hoffman Jr., then said his name was Jerome-Jerald David Hoffman Jr.

Felony conviction: In 1980, Coastal and Offshore's plans received initial support from then-Gov. Jim Hunt. The company asked for $128 million in tax-exempt industrial revenue bonds to help pay for equipment.

But private support evaporated after it was reported that company President D.J. Hoffman or D.J. Hoffman Jr. - he went by both names - had pleaded guilty to a federal felony mail fraud charge in 1972.

D.J. Hoffman, 47 years old in 1980, had been convicted under the name Jerome D. Hoffman. According to newspaper records, Hoffman told a reporter that his full name was Jerome-Jerald David Hoffman Jr. and that he reversed his initials because it had become fashionable.

A lawyer remembered Hoffman becoming irate when questioned about his background.

"He came here, just showed up down in Wilmington, and started planning an offshore aluminum plant," recalled Dub Graham, a Raleigh lawyer who at the time was general counsel for Carolina Power & Light, now Progress Energy. Hoffman asked CP&L to guarantee the plant large amounts of electricity, Graham said.

"I met with him and his lawyers a couple of times. And the more questions I asked, the fewer answers I got," Graham said Thursday.

Graham said that CP&L told Hoffman it wouldn't guarantee the required energy and that Hoffman blamed him for sabotaging his plans.

"I really don't believe that he was in his own heart trying to defraud people," Graham said. "I think he was just a Don Quixote sort of person who had all these fantasies, and that he was onto something big. ... And he was able to get a lot of people that were really enthusiastic about it."

Plans unchanged: Three weeks ago, Siler City officials were enthusiastic about IIG's buying the Pilgrim's Pride chicken plant. The plant is a $1.2 million annual utility customer of the town.

Officials met with several people representing IIG, including Chief Financial Officer Brian Holloway and an elderly man named J. David Hoffman, said former Chatham County Commissioner Tommy Emerson, who was acting as an unpaid liaison.

IIG executives toured the Pilgrim's Pride plant and said they wanted to keep employees on the job. According to the town manager, IIG also asked Siler City to guarantee it up to 1.6 million gallons of water a day.

In an e-mail message to Brower and Emerson, Holloway said the company was "rolling out" Chix Food Warehouse stores in the Middle East, a new kind of discount grocery chain, producing food, shipping it on its own ships and selling it in its own stores.


Next page >

No comments have been posted for this story. Log in to be the first to comment.


The News & Observer is pleased to be able to offer its users the opportunity to make comments and hold conversations online. However, the interactive nature of the internet makes it impracticable for our staff to monitor each and every posting.

Since The News & Observer does not control user submitted statements, we cannot promise that readers will not occasionally find offensive or inaccurate comments posted on our website. In addition, we remind anyone interested in making an online comment that responsibility for statements posted lies with the person submitting the comment, not The News and Observer.

If you find a comment offensive, clicking on the exclamation icon will flag the comment for review by the administrators, we are counting on the good judgment of all our readers to help us.

Print Ads View all ads from past 7 days »

Hosting Partners of
newsobserver.com

A subsidiary of The McClatchy Company