VIAB The Virginia-Israel Advisory Board: Taxpayer funds for secret Israeli business projects in Virginia
By Grant Smith
The taxpayer-funded Virginia-Israel Advisory Board (VIAB) is secretive when it comes to its portfolio of projects designed to benefit Israeli corporations, exporters and investors seeking high return opportunities in Virginia. There is good reason for that. Thanks to a problematic 1985 bilateral US-Israel trade deal, Virginia already has a half-billion dollar annual trade deficit with Israel. Nearly all VIAB projects count on massive state and federal grants and loans as well as other U.S. support to establish Israeli ventures. Many of those Israeli ventures could displace home-grown Virginia businesses, while increasing Virginia’s trade deficit with Israel. VIAB’s key assumption is that—irrespective of Israel’s human rights record—Israeli investments are to receive unquestioned, preferential treatment and be fast tracked in Virginia..
Years ago VIAB claimed in meeting minutes that Project Jonah had secured a $10 million grant. In reality it was a proposed low-interest loan from the Virginia Coalfield Economic Development Authority. The loan carried many covenants and an original deadline of 12/31/2014, subsequently extended every year to 12/31/2019. The loan was conditional on meeting certain benchmarks including over a hundred million in matching private funds. Other commitments to fund Project Jonah included a $1.0 million tax abatement from Tazewell County which also signed on to a $1.5 million grant from the Virginia Tobacco Region Revitalization Commission for “planning” that has already been paid out. The grant must be repaid if its performance agreement conditions are not met. Virginia Tech was also involved in securing $500,000 from federal and local sources for Project Jonah R&D. The Israeli company behind “Project Jonah” is AquaMaof Technologies which appears to include the Virginia project in its claimed $230 million in closed deals around the world.
VFOIA documents about Project Jonah
|Tobacco Region Revitalization Commission||07/26/2019a||VFOIA request for grant application, grant agreement, detailed budget and grant reports on a $1.5 million grant to develop “Project Jonah” in Tazewell County.|
The released grant application proposes to create 268 new fish farm jobs with an average annual wage of $48,800, real estate purchases of $1.5 million, $39 million in real estate improvements, placement of $93 million in equipment with a total capital investment of $134 million. In order to earn the grant, the company was to have met its employment obligations no later than three years after the base quarter, ending December 13, 2013. (December 12, 2016.)
The grant was conditional on submission of a deed of trust (dated June, 2015 recorded in the Tazewell County Circuit Court Clerks office in Deed Book 2015, page 09537) to secure the company’s performance of the agreement.
|07/26/2019b||A September 17, 2015 performance agreement between the Tobacco Region Revitalization Commission, County of Tazewell and Dominion Aquaculture LLC for $1.5 million. The grant must be repaid if the fish farm fails to employ at least 431 people with a quarterly payroll of $5.3 million, that taxable assets be located in the county with a value of $134 million within 36 months after the end of the base quarter. “Said Deed of Trust shall provide that Company is in default if Company has not performed at least 10% of its taxable asset investment as described in paragraph 4 of The Agreement on or before January 1, 2017.” AquaMaof International LTD unconditionally guarantees “any and all obligations of every nature owing by Dominion Aquaculture, LLC. Signed by David Hazut, CEO AquaMaof International LTD.|
Lala Korall listed as contact at Dominion Aquaculture, LLC is also President of I-Deals LLC, which received $11,788.82 from VIAB in 2014 for “Management Services.”
Virginia Tobacco Region Revitalization Commission VFOIA coordinator clarified by email that “You also requested a budget and grant reports, however, since this project was funded through our Tobacco Region Opportunity Fund (TROF) program we do not have these items. While most of our programs are administered on a reimbursement basis, and thus do generate the budgets and reports you are seeking, TROF is our only program in which funds may be disbursed for a project in advance at the request of the grantee and does not generate those documents. In this case the grantee (Tazewell) did indeed decide to receive the funds up front with a security agreement signed prior to disbursement.
TROF funds are granted to the locality, in this case Tazewell, to act as an incentive for a specific project and are not granted directly to the company in question. At the end of the agreed upon project period, if all agreed upon performance metrics have been met the grant is closed with no further action. If, however, metrics have not been met in whole or in part the Commission recoups funds from the company and/or the locality as necessary. In short, the Commission’s interests are protected by the locality the grant was awarded to.”
|Virginia Coalfield Economic Development Authority||7/31/2019||December 19, 2013 VCEDA letter to David Hazut, CEO of Ecosus Virginia, LLC (housed at the Virginia Tech Corporate Research Center) announcing a loan earmark of up to $10 million subject to Project Jonah obtaining $137 million in matching funds. Earmark expiration date of December 13, 2014. Meeting minutes on another project forgive a $2 million loan balance by converting it to a grant.|
November 20, 2014 letter to Yoav Dagan President of Ecosus Virginia, LLC extending expiration date of loan fund earmark until December 31, 2015. Meeting minutes state there is no change in terms.
October 15, 2015 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC resetting expiration date to December 31, 2016. VCEDA moves into closed session on a Project Jonah request, according to meeting minutes. Minutes document no change in earmark terms.
December 15, 2016 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC resetting expiration date to June 30, 2017. VCEDA moves into closed session on a Project Jonah request, according to meeting minutes. Minutes document no change in earmark terms.
June 15, 2017 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC resetting expiration date to December 31, 2017. VCEDA moves into closed session on a Project Jonah request, according to meeting minutes. Minutes document no change in earmark terms.
Confidential August 22, 2017 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC, and Lala Korall, Vice President resetting expiration date to December 31, 2017. VCEDA letter changes the terms of the loan to 84 consecutive monthly payments of , with the first beginning three years after the promissory note is signed. states that if Project Jonah has at least 200 full-time employees with an average annual wage of $50,000 per year, that 8% of the outstanding loan balance will be forgiven and converted into a grant starting in year 4.Private matching funds reduced to $110 million, with at least $25 million expended in private funds on site development before the loan is approved and the Virginia Economic Development Partnership issues a letter supporting the project. Loan closing fee reduced to one-half percent. Interest rate on the loan set to 0% until year 3 and 2.125% thereafter. . .. VCEDA moved into closed session to reconfigure Project Jonah loan, according to meeting minutes.
Confidential November 19, 2018 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC, and Lala Korall, Vice President resetting expiration date to December 31, 2019. Restates need for copy of Southwest Virginia Community College workforce and development training MOU, details on collateral, written evidence of $110 million in private funds, support letter from VEDP and other terms.
October 18, 2018 VCEDA letter to John H. Schiering, COO of Dominion Aquaculture LLC, and Lala Korall, Vice President resetting expiration date to December 31, 2019.
|Southwest Virginia Community College MOU to train Project Jonah workers.||08/22/2019||Memorandum of Understanding for Southwest Virginia Community College (SWCC) and Dominion Aquaculture LLC for workforce development to be paid for by the Virginia Coalfield Economic Development Authority.|
|Tobacco Region Revitalization Commission||08/06/2019||Name change from Ecosus Virginia LLC to Dominion Aquaculture, LLC|
Email 1 On April 1, 2019, Andres Sorel certifies to the Tobacco Commission that Tazewell County has adequate security on Project Jonah. “There have been a lot of starts and stops with this project.” 8F named as Aquamaof’s investor, and Lala Korall as the company’s “Public Fundraising Director.”
Email 2 On Nov ember 27, 2018 confirmation from Tazewell County Attorney that “they have purchased one site and purchased an option on a second site…I do not want them [AquaMaof] to be able to accuse us based on how we presented it.[ financing and progress.]”
Email 3 Tazewell County Attorney email on status of Project Jonah land purchases and investment from 8F. Dominion Aquaculture on December 1, 2017 confirms purchase contract on land adjacent to Southwestern Community College property under a fall purchase contract.
Email 4 09/07/2019 status update from John Schiering, COO of Dominion Aquaculture. Letter from Karim Ghannam, CEO of 8f Asset Management of Singapore on their proposed investment in Dominion Aquaculture, LLC. 8/17/2017 letter from Tazwell County Master Commissioner of Revenue that Dominion Aquaculture owns 123.09 acres “on the waters of the Clinch River in the Town of Richlands.”
Email 5 On May 14, 2015 John H. Schiering, CEO of Dominion Aquaculture, LLC advises Doyle Rasnick, Chairman of Tazewell County IDA, that “we have formally commenced with the permitting process and are meeting with the US Army Corps of Engineers…” List of project accomplishments.
Email 6 May 14, 2015 Doyle Rasnick, Chairman of Tazewell County IDA, updates Tim Pfohl, Executive Director of the Tobacco Commission that delays have occurred due to “legal encumbrances on the 122 acre site, and the complex permitting process…” Request to change Tobacco Commission $1.5 million grant base quarter to 10/01/2015. Letter from Bolling & Hearl, attorneys at Law to Ned Stephenson and Tim Pfohl of the Tobacco Commission about “matters regarding efforts to secure title to a tract or boundary of property containing approximately 122 acres, located near Richlands here in Tazewell County, Virginia (the “Property”).
|Virginia Coalfield Economic Development Authority||05/15/2020||On November 21, 2019 Project Jonah is given a new loan closing deadline of December 31, 2020. (PDF page 10). On April 25, 2018 VCEDA’s Executive Director Jonathan S. Belcher clarified in an email to Lala Korall that required “written evidence that at leaast $25 million has been expended in non-VCEDA funds” was not a covenant that the VCEDA Executive Committee was likely to drop. (PDF page 20).|
In responding to a Virginia Freedom of Information Act request on May 15, 2020, Belcher indicated that “Certain correspondence relating to Project Jonah considered exempt, confidential and/or proprietary pursuant to Virginia Code Sections 2.2-3705.1(5), 2.2-3705.1(2), 2.2-3705.6(3), and 2.2-3705.7(2) has been excluded.” (Email PDF)
|Southwest Virginia Community College update on MOU to train Project Jonah workers and possible land sale.||05/14/2020||In a 5/14/2020 email, Susan R. Lowe, Vice President of Institutional Advancement at Southwest Virginia Community College confirmed that there have neither been changes to a proposed SVCC MOU with “Project Jonah” to train workers nor has SVCC signed the MOU.|
When asked to comment on a news report whether a separate entity, the Southwest Virginia Community College Foundation, a 501(c)(3) charitable organization was negotiating with Project Jonah for an option on property near SVCC, Lowe responded there was “nothing releasable at this time.”
|Virginia Coalfield Economic Development Authority||05/26/2020||9/12/2018 email from Lala Korall, VP Business Development of European Business Development Ind of Richmond that the organization would submit documents to VCEDA on time (Before 9/18/2018 VCEDA board meeting). 9/26/2018 letter to Jonathan Belcher of VCEDA from Karim Gharam of 8F Asset Management in Singapore on fundraising progress for the project. Claims $70 million raised and a “large number of potential investors who have started due diligence on 8F AM and the Fund.” Global placement agent to raise funds in the U.S. Potential investors include “large corporates, public pension funds, insurers, sovereign wealth funds, investment companies and high net worth individuals.” 8F hopes “that our progress with regards to all these milestones, described below, will give you comfort that our fundraising process is well underway and all the required financing for the Virginia Facility can be secured in the future.” First investor, at the end of Q2 2018 was Louis Dreyfus Company. Team visited “concept facility in Poland.”The facility, 70 KM north of Warsaw “was formerly an operational tilapia facility that has been upgraded and transformed into a salmon facility in 2017.”|
“8F AM is also currently in negotiations with several potential distribution partners to discuss significant sizes of offtake for its future facilities. These potential distribution partners are large corporates having an annual trading revenue of over US$ 10.0 billion.”
“At the local level, we have started the permitting process with 3B Consulting Services, working with the very experienced Mr. Preston Breeding. The first phase, which is the survey of the two properties, has been completed. During the design phase of the project. the Fund I Dominion Aquaculture will start with the purchase of materials and equipment and with preparatory site works, which, once triggered, will quite rapidly reach tens of millions of US$…During the design phase of the project. the Fund I Dominion Aquaculture will start with the purchase of materials and equipment and with preparatory site works, which, once triggered, will quite rapidly reach tens of millions of US$.” Brochure on Poland “proof of concept” facility.
|Virginia Coalfield Economic Development Authority||05/26/2020||10/15/2019 “Proprietary and Confidential” letter from CFO Sarah Ho of 8F Asset Management claiming to have raised $147 million, “leading the Fund to reach its target of USD 320m by year end 2019…The co-investment between Fund and AquaMaof’s in Poland: Pure Salmon Poland. has moved beyond a proof of concept facility and is now producing commercially viable 4-5kg Atlantic salmon that has been tested across the world by retailers. leading chefs and restaurants as well as industry experts, with generally very good feedback received. In addition, the quality of the fish has secured a 10.000 ton per year off take in Japan by one of the leading fresh food distributor and importer. Finally. Pure Salmon Poland has now started selling its production|
“At the local [Virginia] level, the first phase. namely the survey of the 2 properties has been completed. In addition, the Fund
is in advanced stages of approving the geotechnical engineering and drilling tasks, which is an important due diligence item to be completed on the land. Once the land due diligence is completed. the fund will look to complete the required permitting and the acquisition of the land. As the Fund continues to work on all of the above items. our current timeline forecasts a start of the final engineering and design of the facility by the end of Q1 2020. Once the design completed. the Fund through its US entity will look to engage construction providers in order to start construction by end of Q3 2020. leading to significant financial commitments.”
“Based on the progress achieved and the Fund’s above outline or the timelines. we respectfully request for the loan closing deadline of the VACEDA loan. per your letter dated Aug :22, 2017 to be extended through December 31, 2020, at which point all contingencies should have been fulfilled.”
11/19/2018 Letter from VCEDA’s Executive Director Jonathan Belcher on what Project Jonah must do before the $10 million loan can be closed, including signed MOU with SWVCC, determination of loan collateral, written evidence of $110 million in private funds, written evidence of the expenditure of at least $25 million in private funds expended on “site development, facilities construction, and/or equipment at the project location in Tazewell and Russell Counties, Virginia (excluding engineering and permitting fees), and the approval of the VCEDA Board at a duly called meeting of the VCEDA Board.” Also a letter of support from VEDP.
|Virginia Coalfield Economic Development Authority||05/26/2020||2018 and 2019 VCEDA motions to extend project Jonah loan closing deadlines.|
|Virginia Coalfield Economic Development Authority||05/26/2020||VCEDA Executive Committee notes for 6/14/2018.”Project Jonah – wants an amendment to the loan approval to allow the closing of the loan (but not the disbursement) before they have spent $2SM. Have postponed the real estate closing with SWCC and said no announcement or construction this calendar year, but have authorized Preston Breeding to begin some engineering work. No documentation provided yet of any actual cash in the bank. Do we allow them to request the loan amendment?”|
“Project Jonah – construction now not to begin until next year, with opening date sometime in late 2020 or early 2021. Land purchased delayed until this fall. Prelim. Engineering has begun. Because of contingency in our loan approval, want to ask board at 10/2018 meeting to waive requirement that at least $25M must be spent before loan can be closed, and substitute with a provision that loan can be closed but no funds disbursed until at least $25M expended.”
“Project Jonah – mention the check sent to SWCC. Will be back in spring for VCEDA modification.”
“Project Jonah – agreed not to submit the request for modification; will ask for extension in Oct.”
“10/25/2019 Project Jonah request for one year extension of loan closing deadline.”
|Virginia Coalfield Economic Development Authority||05/26/2020||Active Project Reports|
|Virginia Coalfield Economic Development Authority||05/26/2020||Committee Meeting Agenda – October 18, 2018|
|Virginia Coalfield Economic Development Authority||05/26/2020||Committee Meeting Agenda – November 21, 2019|
|Virginia Economic Development Partnership||06/23/2020||Draft VEDP letter of approval required for VCEDA loan dated July 31, 2017. “This letter is to indicate the Virginia Economic Development Partnership’s (VEDP) support for continuing discussions with Dominion Aquaculture. VEDP has a strong commitment to Southwest Virginia and enthusiastically supports any company that has the potential to provide new jobs for the region’s citizens and new capital investment for its localities. Dominion Aquaculture represents an opportunity to diversify the region’s economy, which has suffered significantly with the decline in coal and coal related industries.”|