James Hardie Building Products Inc. is taking Public Water Supply District No. 12 to court in order to detach from the district and instead receive its water from Crystal City.
The litigation would lead to months more delays in development for the international home supply manufacturing company, said government relations director Mackenzie Smith Ledet, and so James Hardie is supporting a bill currently making its way through the Missouri Legislature that, if approved, would speed up the detachment process.
State and local officials announced in October 2022 that James Hardie is planning to build a 1.25 million-square-foot facility on and around the former Festus Municipal Airport property in Crystal City.
The facility, off Airport Road, is expected to generate about 230 jobs.
Smith Ledet said the facility was expected to open sometime last year or this year. However, delays in improvements to the ancillary roads leading to the facility, along with the issue of water supply, have severely delayed the project, she said.
State Rep. David Casteel of District 97 introduced the bill earlier this year. The bill, HB 1917, is currently being voted on and perfected in the House of Representatives and will likely be taken up for a vote in the Senate within the next few weeks.
Casteel said his bill fosters economic development in the county “and prevents local water districts from holding economic development hostage at the expense of ratepayers.”
Smith Ledet said James Hardie supports the bill because it “creates a fair, streamlined path” for landowners to separate from the geographic boundaries of a public water supply district that does not currently supply water to their property.
“Water is one of the four critical raw materials we need to manufacture our durable fiber cement, exterior siding and trim that’s installed on homes throughout North America,” Smith Ledet said. “Since we announced our project in Crystal City in 2022, we have not been able to make final decisions on who will provide the quality and quantity of water we need at the site due to the actions of the local water district.
“In short, PWD12 has been the obstacle – and continues to be the obstacle – in our journey to bring hundreds of millions of dollars and hundreds of jobs to Jefferson County and bring world-class products to our customers.”
Smith Ledet claimed that the water supply district has told James Hardie it “does not service our site, has never serviced our site and does not want to service our site,” leaving the manufacturer without a source of water for production.
At a Feb. 10 Senate committee hearing, Brad Bryant, the district manager of Public Water Supply District No. 12, said that’s not true.
Neither the water supply district nor Crystal City currently has infrastructure in place to pipe water to the manufacturing site, Bryant said, meaning no matter what entity James Hardie chooses, they would have to build out to the facility.
In early discussions with developers, Bryant said James Hardie would require about 1.2 million gallons of specially treated water daily for operations.
While Crystal City voted to annex the James Hardie property in 2022, Bryant said the property still lies within his water supply district’s geographic boundaries – along with about 17 other homes and businesses along Airport Road.
“We definitely want this project,” Bryant said. “My board of directors is 100 percent behind the project, but we feel like, because it’s our territory, that we should be able to provide the water to them.”
In a 2022 email from the water supply district’s lawyer to a lawyer representing Crystal City, provided to the Leader, the water district claims that James Hardie and the city appeared to have conversations much earlier, without the district, “in hope of cutting the district out of the project.”
“We attempted to partner with these parties, with Crystal City or both of us providing water and the district distributing the water to James Hardie within its territory in partnership with Crystal City, but neither James Hardie nor Crystal City would engage in those discussions,” Bryant said. “Once the district had knowledge of the project, our board of directors immediately invoked our federal right to protect our territory from encroachment and let Crystal City and James Hardie know that the district was the rightful water provider.”
City Administrator Jason Eisenbeis said Crystal City received a letter from James Hardie on April 30, 2024, stating that the company intends to use the city’s water supply for production. The letter states that the city meets James Hardie’s water quality specifications. Eisenbeis said James Hardie has not communicated further with the city about the water supply.
Loan, fee
More than a year ago, Smith Ledet said the water supply district sent a letter to James Hardie indicating it would like to service the site, but said the engineering and infrastructure costs would need to be paid by James Hardie. The company would then be required to deed the infrastructure to the water supply district to operate it.
Bryant said most rural water districts don’t have the capital to finance a project that a site like James Hardie’s requires, and it’s typical to have the developer handle the construction and then hand over operations to the water district.
As an alternative to this plan, Smith Ledet said the water supply district stated in its letter that James Hardie should pay a monthly fee to the district if it chooses to be supplied with Crystal City water. She said this fee would amount to approximately $1 million annually.
Casteel called the monthly fee proposal extortion.
“Do you, or anyone in the state, want to pay your local water district a fee for the rest of your life, even though they don’t provide you with water and have told you they don’t have any intention of providing you water?” he said. “That’s the type of scenario that HB1917 is trying to prevent by giving someone in that scenario another way to get out from under crooked water districts.”
“To our knowledge, the local water district can demand the fee because it holds debt guaranteed by the federal government alone, which, to my understanding, gives the legal rights to demand that monthly fee from James Hardie,” Smith Ledet said. “So, James Hardie, gratuitously, to the benefit of the local water district’s ratepayers, paid off that debt of the water district.”
Bryant said the payment felt like “an underhanded attempt to circumvent” the detachment process, already initiated by James Hardie at the time.
Bryant said a Husch-Blackwell lawyer, on behalf of James Hardie, sent a letter to their bank on June 26, 2025, purporting to act on the district’s behalf and claiming to elect to prepay the loan for the district.
Once the water district learned of this debt payment, which was about $150,000, Bryant said it was immediately returned to James Hardie.
“The fact of paying off the loan, that’s something that I really took exception to, because the way it was handled, we were notified about a week and a half roughly after it happened by the bank representative coming to our office and saying, ‘Here’s your papers for your paid off loan,’” Bryant said. “That’s the first we heard anything of it.”
“Many small, rural water districts across the state rely on that territorial protection to keep municipalities from eating them up, basically,” he added. “If you remove that protection by allowing someone to basically buy you out, on principle, I don’t think that’s a fair thing to do.”
HB 1917, in addition to allowing James Hardie to detach from the water supply district, would make it so water supply districts cannot refuse monetary donations offered to pay down debts.
Numerous local officials spoke against the bill at a House committee hearing earlier this month.
David Haug, Jefferson R-7 superintendent, said the bill sets a dangerous precedent, benefiting corporations at the expense of local public water districts.
Erin DeVore, executive director of Public Water Supply District 1 in Arnold, said the bill would eliminate protections that water districts might have from encroaching municipalities.
Kenneth Weldele, general manager of Public Water Supply District 3 in Arnold, and Lynne Edwards, district manager of Public Water Supply District No. C-1, in Barnhart, also spoke against the bill.
“This in no way benefits the public located in those areas,” Edwards said. “We strongly urge (the Missouri Legislature) to go no further with this bill and stand with your constituents and defend the small rural water systems in Jefferson County, Missouri.”
Community impact
State Sen. Mary Elizabeth Coleman of District 22 is the Senate sponsor of the bill. At a recent committee meeting, Sen. Mike Henderson of District 3 spoke on behalf of Coleman, who was absent. The edge of Henderson’s district is only miles away from the proposed James Hardie plant, and Henderson said he’s spoken with many people in Jefferson County about the importance of the development.
“James Hardie Building Products could have picked anywhere in North America for its latest manufacturing facility, but they chose Jefferson County,” he said. “What we don’t want to have happen is this business be held up because they can’t get water there.”
Smith Ledet said the Crystal City location is the 12th in North America for the Irish company. She said it has now been four years since James Hardie announced plans to build in Crystal City.
“We need clarity and certainty on our water supply before we can understand our future in Crystal City,” she said. “We are absolutely committed to this site and the people of Crystal City, and we must create a path forward for the viability of this project.”