City officials have approved bonds for a biodiesel plant they hope will pump jobs into the local economy.

The City Council voted 6-2 Monday to issue up to $25.5 million in Chapter 100 industrial development bonds to Terra Bioenergy/Blue Sun Biodiesel.

Pat Jones and Barbara LaBass voted against the bonds, while Mayor Bill Falkner abstained because his plumbing company has performed work at the plant.

Blue Sun announced in October its plans to finish construction on the biodiesel production facility Terra Bioenergy broke ground on in 2008 at 5701 Stockyards Expressway.

Blue Sun officials explained their relationship with Terra to the council. In simple terms, Terra owns the property and Blue Sun operates the plant.

Blue Sun will receive varying levels of personal property tax abatement throughout the life of the bonds. In year one, the company will receive an 85 percent abatement, dropping to 80 percent in years two through five, 60 percent in year six, and 50 percent in years seven through 10.

Council member P.J. Kovac expressed concern that the city could face problems if the project falls through, as Chapter 100 bonds require the city to take title of the property and lease it back to the company.

City Manager Bruce Woody said the risk fell to Terra and Blue Sun, not the city.

“There is no liability to the city on the bonds whatsoever,” Mr. Woody said.

The agreement requires Blue Sun to create at least 30 jobs by Dec. 31, 2014, with an average salary of $41,600 per year, plus benefits.

Clinton Thomas can be reached at clinton.thomas@newspressnow.com.