The Crookston Housing and Economic Development Authority (CHEDA) Advisory Board met on Tuesday morning and discussed the infrastructure bonding that the City of Crookston will work to get included in the Minnesota State Legislature’s Capital Bonding Bill. They were joined by Dennis Egan from Epitome Energy and Senator Mark Johnson.
Johnson suggested that the City of Crookston put together a “small” committee of about three to four individuals to regularly visit the State Capitol during the spring session and speak with legislatures in the spring similar to the committee put together by Thief River Falls for bonding related to the Digi-Key project. Johnson suggested the group could include Mike Skaug from Fertile, the Vice-President of the Minnesota Soybean Growers Association; Egan; CHEDA Executive Director Craig Hoiseth, and a representative of the City Council that can talk exactly about what the plans are. Johnson also said each member of the group should know the infrastructure investments (leverage) of the City of Crookston, and that of Epitome Energy as well as the return on investment the legislature would see from investing in the project.
The leverage of Epitome Energy and the City of Crookston will be key aspects in gaining support among the legislatures. Hoiseth said there are a number of options to be weighed and considered in creating the best possible leverage package. “Every time the legislature considers bonding bills, they like to see what the leverage, what the contribution is from the municipality and the surrounding area,” said Hoiseth. “Our region is certainly behind Epitome Energy and we want to demonstrate that we’ve created ample, significant leverage to go along with the request in St. Paul. That could come in the form of dollars, infrastructures, or TIF districts. All those types of things are on the table as we try to create the best leverage package that we can.”
Egan reiterated that Epitome Energy is committed to working side-by-side with the City of Crookston throughout the project. “I think one of the commitments that we made early on when we decided to come to Crookston was to be a part of the community,” said Egan. “Everything from the United Way to the chamber and we’ve got an opportunity to work with the capital investment committee on both the senate and house side to talk about what we’re doing here in Crookston bringing 80-100 jobs, $150 million project. Going back to our core values as to why are we looking at this, what is the impact to the local grower, region, and city. Will this financially be a wise investment for Epitome Energy and local equity players. In that process, the city is moving forward with a bonding request. There is the potential that there need to be some matching dollars. But we want, and what we said this morning, is that Epitome Energy will be with Crookston to look at what does that mean. What kind of financial commitments in Epitome Energy making to ensure the bonding dollars. Our commitment has been and will continue to be to work with city leaders and our legislators to ensure that we have the best possible opportunity to move this whole project forward.”
Johnson also said the facility in Crookston is considered one of the Top 3 projects in the State of Minnesota. Meanwhile, the City of Crookston has also been notified that the Senate Capital Investment Committee could be in Crookston next week and the committee discussed ways of ensuring they were prepared to make a positive impression on that group. Official notification of whether they will make it next week is expected later this week said Hoiseth. “We have been made aware that the Senate Capital Investment Committee is going to be making their tour of northwest Minnesota,” said Hoiseth. “It’s very possible they might make a stop in Crookston to evaluate the Epitome Energy project, site, and what we might be doing for infrastructure, and bonding request. Hopefully, we will be able to see that committee show up in Crookston next week and give them the information they need to make a reasonable decision on bonding for Crookston.”
Hoiseth also addressed comments made publicly about a forgivable loan with Epitome Energy. Hoiseth said that each piece is a negotiation and in this case the forgivable loan money is recaptured due to the negotiation on the value of the land in the option agreement. “We didn’t just give away that $250,000 – as a matter of fact we haven’t given away $1 of it at this point,” said Hoiseth. “But, what we did is we built-in value to the land which will help Epitome Energy with their balance sheet and that $250,000 is going to achieving over seven percent interest. Something that we wanted to do and Epitome Energy wanted to do to and negotiated a good position for the City of Crookston and for Epitome. So, forgivable loan grant is the nameplate on the agreement, but really we’re recapturing that money on the land value.”
Councilman Don Cavalier also said he had read about the threats to the project and was concerned. Adding that the advisory committee needed to be able to defend the things in the threat report. Egan says the Epitome Energy meets and evaluates risks on a weekly and sometimes daily basis. “We initially did a feasibility study and hired outside experts in the field of soybean crush and biodiesel to work with us to put that document together,” said Egan. “It is a living document. In that document, we went through the assessment of all the threats whether that is local competition or international competition because we are on a world stage. So, we understand what that means. It’s a living document because it changes. When we first started down this path three years ago, we didn’t have a tariff in place with China. The Chinese hog industry hadn’t collapsed. The team we put together on a weekly, if not a daily basis are looking and analyzing and ensuring that the project that we are moving forward is positioned to continue to go back to our four key principals. And one of them is will this project be around for 20, 30, 40, 50 years, and that means you change, you adapt, you look for opportunities, and you bring the right people onto your management team to ensure you’re doing those types of things. So, yes, that document is put together. We have a business plan that evolves and changes.”
Egan also confirmed that the information has been available to decisionmakers within the City of Crookston. “It’s available to those decisionmakers,” said Egan. “And to the city, we’re putting some things in place with Angel (Weasner, City of Crookston Finance Director) and Shannon (Stassen, City Administrator) as well to continue to share information and make sure they are up to speed. I had a one-on-one conversation with Shannon the last time I was up here. We continue to make those offers that if any elected official, any citizen that sits on one of these key boards if they need information, we are here to provide that information. We are here to provide our team to them so they’re not just asking a Dennis Egan, but they can ask a gentleman like a Joe Jobe. Joe was the executive director of the National Biodiesel Board. He helped put infrastructure in place, so we will make those people available for questions that come up.”
