Because of Aspen Aerogels’ decision to abandon its mostly built but never opened Bulloch County plant, Statesboro City Council on Tuesday terminated the city’s role as guarantor of a $750,000 May 2023 state grant used to extend water and sewer lines to the plant. Aspen was expected before the day was out to repay the city government $741,000 it spent.

The city, in turn, was set to forward that $741,000 back to the Georgia Department of Community Affairs, or DCA, as spelled out in the “termination of guaranty” agreement. City Manager Charles Penny said Aspen Aerogels would also repay about $11,000 used to prepare the grant application, but that separate amount wasn’t mentioned in the printed agreement

The DCA awarded the $750,000 to the city and Bulloch County on May 1, 2023 as an Employment Incentive Program, or EIP, grant, a type of Community Development Block Grant, from federal money allocated to the state. As an EIP grant, it came with job creation expectations, and its specific purpose was for the water and sewer improvements for Aspen Aerogels Georgia LLC. The project was handled through the city government as an extension from its water and sewer mains that years earlier had been built out to Bruce Yawn Commerce Park, which is owned by the Development Authority of Bulloch County and where the city also had already placed a water tower.

The overall cost to install infrastructure specifically for the Aspen plant was nearly $1.7 million, with the company paying a portion and the city a portion, Penny reminded the council Tuesday.

“So this (the $750,000) was an important part of that,” Penny said. “A few weeks back they announced that they were not moving forward with the project in the Bruce Yawn Commerce Park, so in effect we always have a … claw back part of our agreement, and in this case, Aspen Aerogels had responsibility to repay the grant funds since we were not going to create the jobs.”

The $741,000 is the amount the city had drawn from the grant, “and then (Aspen) will pay about $11,000 additional to cover the grant preparation with consultants,” he told the mayor and council, asking them to “finalize the termination agreement.”

“The funds will be electronically transferred today,” Penny said during the 9 a.m. April 1 meeting, “and then we will turn around and send that money straight back to DCA, because if we don’t, it could jeopardize our eligibility for certain grants, so this is an important step.”

The council’s vote was 5-0, on a motion from District 5 Councilmember Shari Barr, seconded by District 1 Councilmember Tangie Reese Johnson authorizing Mayor Jonathan McCollar to sign the agreement.

“So, it sounds like we’re going to get the money back but the infrastructure’s still there,” Barr said before offering the motion. “So whoever comes in, we’ve already had that done. It’s an advantage in the long run, and it’s thanks to the attorneys who know how to word these things that get those claw backs in.”

Aspen Aerogels Inc., which makes and markets aerogel insulating materials, including some used to protect petroleum pipelines as well as a more recent product line used as thermal barriers for electric vehicle batteries, had first announced the project in February 2022 to build a $325 million plant and create 250 manufacturing jobs at the commerce park off U.S. Highway 301 at the I-16 interchange. But after a 2023 “reset in EV demand expectations” as the corporation phrased it in one report, Aspen slowed development of the “Statesboro” plant and instead “ramped up … external manufacturing capacity” by outsourcing.

In a Feb. 12, 2025 investor and public relations statement, Aspen Aerogels Inc. acknowledged that it had halted construction of the plant altogether.