The Crookston Housing and Economic Development Authority (CHEDA) advisory committee on Epitome Energy met on Tuesday morning during which they voted unanimously to recommend a $250,000 loan to the CHEDA board. They also received an update from CHEDA Executive Director Craig Hoiseth on the land option agreement negotiations and heard about Epitome Energy exploring increasing the size of their crush facility beyond their initial plans.
Initially, Epitome Energy had approached CHEDA requesting a $1.25 million-dollar loan in June to get a kickstart on their air permitting. Since then, discussions between CHEDA, the Department of Agriculture, and Epitome Energy led to another solution. A $250,000 loan with matching funds from the Department of Agriculture to be used as a down payment said Hoiseth. “What we were hoping to do is get that air permitting underway,” said Hoiseth. “We all realize that’s a nine- or ten-month process, so that brings us to next summer already. Before you can put any shovel in the ground, you have to have those permits there. We feel that this $250,000 matching with the Department of Ag can initiate that. The advisory committee today made a motion and approved the $250,000 request. That will move forward to the full CHEDA board, most likely with a special board meeting August 20 to deal with that issue.”
The Department of Agriculture has awarded a $1 million grant in 2020 to Epitome Energy that will cover the remaining costs associated with the permitting and testing. Additionally, Hoiseth had previously been given the direction to provide the land on the south end of Crookston to Epitome Energy for nothing if need be. But Hoiseth informed the board Tuesday that he has been working to negotiate a purchase price for the property since the last meeting. “The City Council and the CHEDA board together have me a lot of advice in terms of how to approach the land,” said Hoiseth. “And need be we would provide that land to Epitome Energy for nothing as an incentive for that development. But we are negotiating with them on the land valuation. As you remember, nine or ten years ago, we purchased that land for about $600,000. We want to recapture some of that asset value if we can. So that negotiation is going on, and hopefully, in the next few weeks we can come to a reasonable conclusion on that.”
During the last meeting, the advisory committee asked Hoiseth to calculate what Epitome Energy’s facility would mean for Crookston. A similar, but smaller, facility was built in Brewster (Nobles County) in 2003. Hoiseth worked with the tax assessors in both Nobles and Polk County. He said that after compiling all the data, they could confidently say they expect the facility to provide $1 million in new property taxes once complete. “At the last advisory committee meeting they asked me to delve into what Epitome Energy would mean for Crookston,” said Hoiseth. “There are the 100 direct jobs and a couple of hundred indirect jobs. And you realize that brings in families with students to our school district, and other types of revenue to our hotels, housing and things like that. But the property tax value would be such that we’d see the City of Crookston realizing at least $300,000 of new revenue. The school district would get about $150,000 and the county about $250,000 a year in new revenue. So, we see there is a lot of upside to getting this facility here. We do recognize that there is going to be a necessary TIF District to be established. But once that tax increment financing is complete, we’d see that flow of new revenue to the taxing authorities.”
Hoiseth also informed the board that Epitome Energy has been entertaining the idea of increasing the crushing capacity from their original proposal of 21-million bushels to 42-million bushels. “There are a lot of moving parts, a lot of dynamics, to a project of this size and scope,” said Hoiseth. “Certainly, there is a lot of beans in this area. If we’re going to do some maybe, we can do more making the facility more profitable and make our producers that much more viable. What we are talking is permitting for a 42-million-bushel crush facility rather than the 21 million that was initially discussed. But all that is under discussion and evaluation for the pro forma of the company.”
The biodiesel side of the facility is also being designed with expansion in mind. But Hoiseth said that a crush expansion wouldn’t necessarily trigger an initial biodiesel expansion as the excess soybean oil could be sold separately. “We’re developing this site where there could be an expansion of both,” said Hoiseth. “In the beginning, we’re talking about still a 30-million-gallon biodiesel facility whether the crush is 21 million, 42 million or somewhere in between. It all remains to be seen.”
