By Lewis Loflin
In 2009, NanoChemonics, a Pulaski County-based manufacturer of iron oxide coatings for videotapes, was announced as the anchor tenant for the Appalachia America Energy Research Center in Wise County, Virginia. The $7 million, 24,000-square-foot facility at Lonesome Pine Technology Park was intended to advance clean coal technologies and nanotechnology applications, such as removing sulfur and mercury from coal and managing fly ash byproducts. NanoChemonics was slated to occupy 14,000 square feet, with the remaining space reserved for future tenants.
Funding came entirely from public sources: $5 million in grants from the Virginia Tobacco Indemnification and Community Revitalization Commission and a $1.045 million grant plus a $955,000 loan from the Virginia Coalfield Economic Development Authority (VCEDA). The Tobacco Commission also pledged operating funds for the facility’s initial years. Press releases, including a Coalfield Progress article (October 2, 2009), projected up to 250 jobs over five years and partnerships with universities and energy firms.
The facility was promoted as a cornerstone of economic revitalization in Southwest Virginia, with an expected opening in mid-2010.
By April 2010, the Wise County Industrial Development Authority (IDA) confirmed that no contracts or agreements were ever signed with NanoChemonics. In response to public inquiries, Mr. Snodgrass of the IDA stated:
No agreements, contracts, etc. have ever been executed with NanoChemonics... It is presently unknown who will be the occupants of the center, and it is also unknown as to the number of jobs that will be created.
Key details from the IDA’s response included:
| Aspect | Status |
|---|---|
| Contracts with NanoChemonics | None executed |
| Construction Contractor | GRC Construction (Kingsport, TN), awarded as low bidder |
| Future Tenants | Unknown |
| Job Creation | Unknown |
| Private Sector Funding | Unconfirmed |
| Subsidies | State Enterprise Zone tax and job credits, if qualified |
The absence of binding agreements and tenants contradicted earlier promises. The construction contract was awarded to an out-of-state firm, and no private sector funding materialized, leaving the facility’s future uncertain. The lack of transparency and due diligence raised concerns about the decision-making process behind the project.
Concurrent with the Wise County project’s stall, NanoChemonics faced severe financial distress in Pulaski County. By January 2010, the company furloughed 29 of its 60 employees, citing a failed deal with a foreign client and declining demand for videotape materials. Reports from The Roanoke Times and The Southwest Times (March 2010) detailed further issues:
By March 2010, NanoChemonics’ Pulaski plant shut down entirely. Union representatives reported that a bank had seized the facility, and key executives, including the president, had departed. The United Steelworkers union noted a lack of communication from the company, leaving employees without clarity. A March 4, 2010, post on restorepulaski.com urged town officials to secure taxpayer funds, estimating a potential $500,000 loss.
NanoChemonics’ collapse not only derailed the Wise County project but also strained Pulaski’s economy, highlighting the risks of banking on a single company.
The NanoChemonics failure reflects broader challenges in Southwest Virginia’s economic development efforts. A 2008 Blue Ribbon Commission report by the Virginia Tobacco Commission noted that over $400 million spent on “regional transformation” projects since 2000 had failed to reverse population decline, high unemployment, and low educational attainment. By 2010, expenditures exceeded $700 million with minimal impact.
The Commission stated: “Despite this spending, population in the region continues to decline, wage rates still lag behind the rest of the state, there is persistent high unemployment and poor educational attainment is still endemic.”
Projects like the Appalachia America Energy Research Center often prioritize high-tech initiatives requiring advanced degrees, excluding much of the local workforce. The reliance on public funds without private investment, coupled with vague goals and limited accountability, has fueled skepticism. For instance, the center’s operating costs were taxpayer-funded, with no clear path to sustainability. Meanwhile, pressing needs, such as healthcare access highlighted by Remote Area Medical events in Wise County, remain underfunded.
Related articles provide further context:
The NanoChemonics project in Wise County exemplifies the pitfalls of speculative economic development. While no illegal actions are alleged, the $7 million facility’s failure to deliver jobs or tenants underscores the need for rigorous due diligence, private sector involvement, and alignment with community needs. Future initiatives must prioritize transparency, measurable outcomes, and inclusive opportunities to foster sustainable growth in Southwest Virginia.
Acknowledgment: I’d like to thank Grok, an AI by xAI, for assisting in drafting and refining this article. The final content and perspective are my own.
