the proposed Pure Salmon facility in Southwest Virginia resembled no other industrial or agricultural operations on Virginia's Appalachian Plateau
Source: Pure Salmon
One of the most unusual economic development initiatives in Virginia is Project Jonah, a large aquaculture project in Tazewell and Russell Counties. Those communities on the Appalachian Plateau were known best for coal mining, not for farming or fish. The Appalachian Plateau region was hemorrhaging population, and economic news was dominated by the decline of the coal industry. The Atlantic Ocean was far away, there were no large lakes nearby, and the rivers were not "hot spots" for anglers.
A news story in Cardinal News made clear how the innovative concept of a land-based fish farm in Southwest Virginia was inconsistent with traditional perspectives of the area:1
Pure Salmon chose to build "the world's largest vertically integrated indoor aquaculture facility" near the Tazewell County-Russell County border
Source: Pure Salmon - Virginia
In Tazewell County, the Virginia Coalfield Economic Development Authority (VCEDA) committed to $10 million loan to an Israeli aquaculture firm for "Project Jonah" in 2013. The development of that fish-farming facility ended up requiring a decade of effort.
The proposal was initiated by the local member of the House of Delegates and supported by the Virginia Israel Advisory Board (VIAB), an agency of the Virginia General Assembly that helps Israeli companies grow their operations in Virginia. Delegate Will Morefield claimed Project Jonah would be "the largest aquaculture project in the world," and a company lobbyist claimed that each aquaculture job would create seven ancillary jobs in trucking and retail.
Jobs were needed, as automation and reduced demand for coal lowered employment prospects in the region's primary industry. In contrast to the urban areas, the population on the Appalachian Plateau was steadily declining. After high school, young adults were leaving for education and employment elsewhere.
advertising in early 2020 suggested Dominion Aquaculture was already shipping product to the eastern half of the United States
Source: Dominion Aquaculture, About
The Virginia Israel Advisory Board had also supported the project by Appalachian Biofuels to open a biodiesel production facility in Russell County; the company's Chief Executive Officer (CEO) was the Vice-Chair of the Virginia Israel Advisory Board. When that project ultimately failed, the CEO convinced the Tobacco Region Revitalization Commission to waive its claim on $210,000 of loans because he was succeeding in bringing other investments to the region and helping the commission achieve its revitalization goals.2
There was steady political support from Del. Morefield and endorsement of the business plan by experts at Virginia Tech for the unfamiliar concept of opening a private fish farm on the Appalachian Plateau. However, the economics were daunting. The investors required multiple extensions on loan deadlines to meet commitments to hire people and attract additional private investment.
The aquaculture firm explored various locations before acquiring 123 acres next to the Richlands wastewater treatment plant. The aquaculture company also planned to purchase land next to Southwest Virginia Community College. The vision was for the school to start a training program for aquaculture technicians, which the company would then employ.
Dominion Aquaculture's "Project Jonah" planned to raise and process fish on 123 acres next to the Richlands wastewater treatment plant in Tazewell County
Source: Tazewell County, Tazewell County GIS
The initial proposal was to raise tilapia, flash freeze the product, and sell directly to the region's Food City supermarket chain. The fish farm was designed to use a recirculating system similar to what Blue Ridge Aquaculture had demonstrated to be commercially successful. The vertically integrated approach used by Blue Ridge Aquaculture was also adopted, ensuring quality control throughout the process.
Company officials later suggested, as they struggled to attract more private investors, that salmon might be substituted for tilapia. Tazewell County officials traveled to Poland in 2015 to visit an AquaMaof fish farm. The success of the operation in Poland reassured officials that a large-scale project in Southwest Virginia was a viable proposition.
In 2020, Tazewell County approved another extension with the firm then called Dominion Aquaculture, a subsidiary of the Israeli fish farming company AquaMaof. The county's Industrial Development Authority had cosigned for $1.5 million in Tobacco Region Opportunity Funding between 2013-2015, and promised $1 million in county tax abatements.
The new extension included a deadline to spend at least $25 million within the county by the end of the calendar year. The long-term requirement was to provide 218 jobs and create $228 million in taxable assets within Tazewell County. The company committed that the average job (including the salaries/bonuses for top executives and veterinarians) would pay at least $59,000 per year, at a time when the average annual wage in Tazewell County was $36,000.
To ensure the county's loans were repaid, in 2019 it placed liens on the company's 120 acres plus equipment.3
Later in 2020, the proposal was being led by an international set of investors organized as 8F Asset Management and headquartered in Singapore. They raised over $350 million to invest in aquaculture through a company called Pure Salmon, which partnered with AquaMaof to obtain the necessary expertise in recirculating aquaculture system (RAS) aquaculture. The company owned a successful salmon-farming operation in Poland producing 450 tons of salmon annually, and planned to build more plants in Japan, France, North America, China, Southeast Asia, and Africa. The business model was based on creating brand recognition for "Pure Salmon," so customers no longer purchased just generic Walmart or Costco salmon.
Pure Salmon announced plans to spend the required $228 million and to complete building the "world's largest vertically integrated indoor aquaculture facility" by the end of 2023. The facility was projected to produce 20,000 pounds of salmon each year.4
the Pure Salmon project in Tazewell County initially planned to produce 20,000 tons of salmon annually
Source: Pure Salmon, Land-based salmon farmer secures $20 million funding
Though the facility was located in Tazewell County, Tazewell, Russell and Buchanan counties negotiated a revenue sharing agreement for each of them to share the economic benefits of the project.
Tazewell County agreed to spend almost $8 million to upgrade its water system to provide up to 400,000 gallons daily, with expectations that state/Federal grants would cover at least half and possibly all of the upgrade costs. The county's water system had been built to serve a higher population so it had excess capacity, but an interconnection was required to the water system in the town of Richlands for about half of the required amount. The initial stage of filling the tanks was expected to generate peak demand, since filtration and recirculation of the water was fundamental to Pure Salmon's design.
In 2021 Pure Salmon began advertising for local businesses to build and support the fish farming business. Pure Salmon made clear that it sought to spur the local economy in Southwestern Virginia:5
The Pure Salmon proposal was funded by an international set of investors, working through the private equity firm 8F Asset Management. When the Dutch feed company Nutreco announced it was an investor, Pure Salmon was headquartered in Abu Dhabi. It was constructing aquaculture operations in Japan and France, and had reached agreements to build facilities in Brunei and Lesotho.6
Virginia had to compete with South Carolina to retain Pure Salmon. In addition to already-established relationships with the company, Virginia's competitive advantage included low average annual temperatures, availability of water, a supply of workers, a commitment by the community college to provide training, and significant financial inducements.
The Virginia Coalfield Economic Development Authority committed $10 million. The Virginia Tobacco Region Revitalization Commission, together with local incentives, committed $1.5 million. The Commonwealth's Development Opportunity Fund committed $1 million. Local governments committed to a $900,000 machine and tools tax grant, and to waive real estate and personal property tax for three years. Through the Cumberland Industrial Facilities Authority, Buchanan, Tazewell, and Russell counties also committed to loan the company $1 million.
The almost decade-long delay between the initial proposal and groundbreaking in 2021 required regular reaffirmations of support, as the region's population and coal-based economy continued to decline. The chair of the Tazewell County Board of Supervisors commented in 2021 on how the project's title was appropriate:7
Pure Salmon's only investment in the United States is in Southwest Virginia
Source: Pure Salmon, About Us
Pure Salmon estimated that worldwide demand for fish protein would exceed the wild catch capacity, justifying construction of aquaculture facilities
Source: Pure Salmon