AEP gets extension on land option
Published 9:21 am Wednesday, June 27, 2007
PCS Phosphate gives ethanol plant till the end of the year
By EUGENE L. TINKLEPAUGH
A land-purchasing option set to expire Saturday was extended to the end of 2007 to give an ethanol-production company more time to finance its $200 million project.
Agri-Ethanol Products, a Raleigh-based group, has been working to develop land near Aurora as North Carolina’s first alcohol-grade fuel production facility. Some of the land the company wants to build on is owned by PCS Phosphate.
PCS Phosphate agreed to sell the property to AEP and has extended the deadline on the option four times since the agreement.
Mike Gwynn, a spokesman for PCS, said Tuesday the option has been extended until Dec. 31, 2007.
AEP officials did not return multiple calls from the Daily News.
Air- and water-quality permits are in place, and the company had brokered a land deal with the county. But AEP has held off on purchasing the property until it could secure the financing to build the plant.
Tom Thompson, the county’s chief economic developer, said some investors had backed out, but that the company was “working diligently to see the project through,” and wants the project fully financed before breaking ground.
Early estimates set the project cost around $188 million.
That was before construction prices “went through the roof,” Thompson said.
AEP is working to get competitive construction prices, Thompson said.
Hooker and his siblings own 82 acres of the 164 privately owned acres that AEP is seeking. The Beaufort County Committee of 100 has a land-purchasing option on that tract.
Under the county’s agreement with AEP, the Committee of 100 would take out a $1.6 million loan to purchase the property, the county would pay off the loan over a period of four years, and AEP would pay back the county the $1.6 million.
Hooker, his two brothers and sister own 125 acres in that area.
The additional 100 acres of the 264-acre proposed site is owned by PCS.
AEP’s top officials initially announced in December 2005 that Aurora would be seeing signs of construction on the first coastal ethanol plant last summer.
That groundbreaking was delayed when the scope of the Aurora project doubled in size and the development group expanded its plans from one plant to 20 facilities along the East Coast.
Gwynn said the new industry would be a good thing for the county and for other businesses in the area.
The last conversation the county commissioners had regarding AEP “left open the county’s arrangement on the purchase of land,” County Manager Paul Spruill said in an earlier interview. Under that agreement, the county would be responsible for the interest on a loan that would be used to purchase the property.
Under agreements approved in April 2005 by Beaufort County commissioners, the county would extend $400,000 a year for four years — or $1.6 million total — to the Committee of 100.
The nonprofit economic booster would use the money to pay down any loans issued to buy the land and deed the property to AEP.
AEP would repay the county $400,000 a year for the life of the agreement.
The county would be responsible for interest payments on the loan and also refund AEP the amount of property taxes paid by the company over four years. That amount isn’t known because the property hasn’t been acquired and the plant hasn’t been built.
The plant is projected to bring about 90 jobs to the Aurora area. Once investors pushed for the plant to start off with double the capacity originally planned, the number of jobs grew from 43 to 65 at the ethanol facility. An adjacent carbon dioxide facility to be built in the second phase of the construction plan will add another 25 to 28 jobs to the region, according to an AEP spokesman.