Ohio plant receives tax break to restart

By Kris Bevill | September 23, 2010
Posted Sept. 29, 2010

Owners of the former Greater Ohio Ethanol LLC plant in Lima, Ohio, were recently approved for a 40 percent, five-year tax credit in exchange for a commitment to operate the 54 MMgy plant continuously for eight years and to create 22 full-time jobs that will pay an average wage of $27.67 per hour. The currently idle plant began operations in July 2008 but reportedly experienced numerous mechanical and operational difficulties and filed for bankruptcy in 2008. The facility stopped producing ethanol by the end of 2008. In March 2009, the plant was purchased for $5.75 million by PEA Lima, a wholly owned subsidiary of Paladin Ethanol Acquisition LLC, which is an investment group focused on acquiring "deeply discounted" ethanol plants, according to its website.

According to information released by the Ohio Department of Development, PEA Lima will invest approximately $34 million to retrofit the facility, purchase machinery and equipment and pay for other necessary site preparations and land investment. It is unclear when retrofits will begin at the facility. According to the development department, PEA Lima said it will not be able to begin the construction portion of the project and begin ethanol production until it secures a commitment for the balance of its funding requirements. PEA did not immediately return calls for comment. The tax break is scheduled to begin in January and will expire in December 2015.

In its project summary for the Lima plant, the Ohio development department said that the tax credit was a major factor in PEA Lima's decision to operate in Ohio. Michigan and Indiana were named as competing states for PEA's project.