City settles tax bill with Osage after UK firm purchases plant

By Holly Jessen | March 29, 2013

News that a United Kingdom company purchased the 65 MMgy ethanol plant in Hopewell, Va., with plans to ship at least some equipment overseas is just another chapter in a continuing ethanol story for the community, Michael Bujakowski, mayor of the city told Ethanol Producer Magazine. 

Appomattox Bio Energy, a barley-to-ethanol plant built by Osage Bio Energy, was mechanically complete in August 2010. However, the plant never reached full production after a September 2010 explosion during start up.

Hopewell, which had been working to collect back taxes, announced March 21 that it had collected more than $1.9 million for payment in full of all taxes, penalties, interest, attorneys’ fees and other costs. In exchange, the city dismissed a lawsuit filed in Hopewell Circuit Court because the Osage didn’t file a letter of credit to cover taxes, a requirement in the project’s development agreement. As authorized by the Hopewell City Council in October 2012, the city attorney proceeded with the sale of the property due to nonpayment of taxes for 2010 and 2012. Reports are that Future Fuels purchased the plant, although Ethanol Producer Magazine has been unable to confirm that to date.

“Collecting the back taxes is nothing to celebrate as this was money owed the city,” Bujakowski said. “I/we will celebrate once the new owners make their best business decision, then decide on what to do with the property and find a use or new owner who will return that property to a position of adding to our city tax base.”

Right now, city officials have a lot of questions and not many answers. Hopewell never had any ownership of the property and wasn’t part of the sales discussions, Bujakowski said. Although the understanding is that the company that purchased the plant intends to send ethanol plant equipment overseas, it isn’t known how much of the plant will be dismantled or how much equipment will be left on the site. “Is it enough to have a functioning entity of some degree or does it need to be removed and then the property sold?” he asked.

Christina Luman-Bailey, Ward 1 councilor, was also thinking ahead to possible future industrial uses of the site developed for the ethanol plant. Like Bujakowski she said she doesn’t know how much of the process equipment will be used at the overseas ethanol facility. However, she indicated the equipment could be used to produce ethanol from barley, as was intended to be the main feedstock for the plant in Hopewell. “However, the new owners are very much interested in the pending (U.S.) EPA barley ruling for advanced biofuel,” she told EPM. “Economics associated with a positive ruling will be evaluated and considered in determining plant status going forward.”

Efforts to contact Future Fuels have been unsuccessful. However, on March 28, Vireol agreed via email to answer Ethanol Producer Magazine’ questions when their CEO is back in the office after travel. According to its website, Vireol is working toward operating a wheat-to-ethanol plant in England in partnership with Future Fuels. A possible link between the U.S. and UK projects is the technology utilized. In May 2012, Vireol said that the proposed England plant would utilize Katzen International process technology, also the designer of the Appomattox Bio Energy plant.