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Mon., 7:03am: State wants repaid for defunct Baard energy project

May 6, 2013
Tribune Chronicle | TribToday.com

LISBON - The Columbiana County Port Authority is being told by the state to repay $305,500 awarded the agency for the defunct Baard Energy project.

The Ohio Development Services Agency (DSA), formerly the Department of Development, awarded the port authority the money in 2007 to help secure options on land in Yellow Creek Township for Baard's proposed coal-to-liquid fuel plant. The multi-billion-dollar project was expected to have a dramatic economic impact that extended into Mahoning and Trumbull counties.

The grant was tied to the creation of 200 jobs, which never materialized after Baard ran into financing problems and eventually sold out in 2011 to Planck Trading, an investment firm that proceeded to use its money to acquire the remaining 400 acres. Nothing has happened since with the project.

Tracy Drake, the port's chief executive officer, disputes the claim on several counts. In a letter to the state dated Dec. 13, Drake wrote that the 2007 grant was for $157,500 and required Baard, not the port authority, to create 200 jobs. He noted that agreement expired in 2010.

Drake said they entered into a second grant agreement with the state in 2008 for an additional $148,000, and this agreement held the port authority responsible for the project creating the required jobs.

Although the port authority accepted the second grant, Drake said they objected to being on the hook for creating jobs when it was not their project and it made no sense for the state to hold them responsible. Besides, the project may still go forward under Planck, he wrote, which stated it would use natural gas instead of coal as its fuel source.

Last week, DSA chief legal counsel Diane Lease wrote Drake indicating they were holding to the $305,500 figure but would delay seeking reimbursement if the port authority secures a new job-creation commitment for the property by Dec. 31 and "enter into a revised agreement with the (DSA) to reflect the new job creation commitment ..."

Lease told Drake they were willing to compromise because the port authority "is in discussions to develop portions of the land with two private firms that are currently working to secure the appropriate financing. While you anticipate both projects will result in some new job creation, it is too early to determine the timing and reasonable estimate of the number of new jobs,"

The port authority was required to sign off on the new deal by May 5 or the state would take action to collect the $305,500, while also withholding approval for any other pending funding applications before the DSA.

Drake followed up with a letter dated May 1 to Lease's boss indicating the deal was unacceptable, saying they continue to dispute whether they are required to repay the money. He also described the five days given to make a decision as "arbitrary and unreasonable."

"The threat to withhold (DSA) approval for other assistance is contrary to our mutual mission and could result in failure to complete ongoing projects at the Wellsville Intermodal Facility (where millions of dollars have been invested by out-of-state companies)," he wrote.

Drake closed by urging the parties to continue to work together on a "reasonable compromise."

He also sent copies of his letter Jason Wilson, director of the Governor's Office on Appalachia, state Rep. Nick Barborak, D-Lisbon, and state Sen. Joseph Schiavoni, D-Boardman.

 
 
 

 

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