Business remains unsettled for agri-tech company AppHarvest following a Chapter 11 bankruptcy filing about one month ago. The bankruptcy announcement has affected local communities where AppHarvest is an important economic engine.
A few late comers approach vendors as they begin wrapping up their day at the Rowan County Farmers’ Market in Morehead. They’re here to buy cucumbers and tomatoes. However, these tomatoes are not produced by AppHarvest's 60-acre flagship farm in this Northeast Kentucky community.
Many were excited when the company opened up shop in Morehead, a small town with a population of slightly more than seven thousand people. One of those who was excited about the agri-tech's investment in Morehead was Governor Andy Beshear. In a video released with then AppHarvest CEO Jonathan Webb in 2021, the governor said this was an opportunity for the whole region.
“Now for decades, we have heard a lot of folks, including many politicians, speak about the urgent need for us to fulfill our duty to the people of Appalachia, to honor the legacy and labor of generations of service here and to provide a way forward for people who have not seen the opportunity that they deserve in far too long.”
The governor said AppHarvest's investment in Eastern Kentucky was important.
“While well intentioned, much of that has amounted to little more than lip service. Well, take a look around, this isn’t just talk, the most sophisticated operation of its kind, I believe, in the entire world is right here in eastern Kentucky, one of the largest buildings, I believe, is right here in eastern Kentucky.”
That excitement was shared by Morehead mayor, Laura White-Brown.
“When AppHarvest announced their entire concept, that it would be in Morehead, it was incredibly exciting. It’s a huge concept, a huge idea and they have a lot of their mission built around serving this part of the country, helping with world hunger. All of that is something I am passionate about and was really excited to see a project really come to fruition for those ideas behind it.”
Not only was it a big idea, but it is also a big help for the community. White-Brown said it has helped bring more attention to her town.
“It’s a huge employer for our county and so that is crucial to the workforce in this area, it has also brought a spotlight to our community as well and we’ve had a lot of community buy in with this.”
That sentiment is shared by Rowan County Judge Executive Harry Clark. He said AppHarvest has made it a point to reach out and become community partners.
“They have been really good to our schools, our surrounding schools with their portable grow facilities, if you will, but they have been really good to us and been good partners since the beginning.”
Clark said the partnership was also expected to bring in needed county revenue in the form tax dollars.
“It’s, pretty roughly about a million dollars a year, that’s in, that’s about 700-thousand dollars in property tax, about 170 thousand that’s in payroll and occupational tax and then there is other tangible tax and stuff, but it’s generally about a million dollars a year.”
Clark said now that AppHarvest's future is in question, there is concern about county revenue.
“Oh absolutely, it really is, when you take a million dollars out of your budget, I have a 21-million-dollar budget, so you pull a million dollars out and it’s a big deal.”
Clark said someone would have to pay the taxes, so his main concern would be for the employees.
“Because we get employees from the surrounding area, which is really good for us. Like any other county we struggle for workforce, so we have a lot of folks from surrounding counties. As long as the workforce is there, we’re still getting payroll and occupational tax, so, we just hope they restructure and find their way and continue operating as they had in the past.”
Officials are also concerned about who will replace AppHarvest and retain the eastern Kentucky connection. The founder, former CEO and current chief strategy officer Jonathan Webb is from Kentucky and his goal was to connect local communities. Clark said it could make things difficult if another company comes in.
“When you change from a vision to do things different in eastern Kentucky, and you bring an outsider in, they may not have that same vision, they may be absolutely business driven, but that will only get you so far and they’ll do that for a period of time but they they’ll realize you have to be a community partner, no matter what your business is, you have to have community partners you can’t do it on your own.”
Clark is optimistic that things will work out with AppHarvest and the company can stay in his county.
Back at the Rowan County Farmers Market, not everyone is concerned about what happens with the agritech company. Vendor Tracy Arnett sells a variety of produce and says AppHarvest has little impact on her or other vendors.
“I know dealing with the public and stuff and doing the local farmers market, the customers rather have the out in the garden or out in the field going instead of in the greenhouses, they have a totally different taste.”
She says business is good, especially with inflation keeping the price of food up at the grocery stores.
“I was told while ago, the heirloom that we sell are like seven dollars a pound at Krogers.”
AppHarvest officials said in a statement that they had the funds to keep the Morehead, Richmond, and Somerset facilities running for about sixty days. A little more than a month of funding appears to be left.
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