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Posted on  

July 21, 2003

Ethanol plant construction begins

Plant must be up and running by set date to qualify for tax credits

By Tracy Overstreet

It didn't take 30 minutes after an air quality permit was issued this week for construction to begin on a new ethanol plant in Central City.

"We received the air permit on Tuesday and we started construction yet that day," said Tim Morris, chief operations officer for Fagen Management, LLC, a subsidiary of ethanol plant owner Fagen, Inc. of Granite Falls, Minn.

"We got the permit at 3:30 p.m. and poured (concrete) at 3:50 p.m.," Morris said. "We poured 16 truck loads, 160 cubic yards, before the end of business.

"We were primed and ready to go," he said.

The impetus to get going on construction is a drop-dead June 30, 2004, deadline the plant must met in order to be eligible for state-approved tax credits funded by corn check-off dollars.

Not only does the plant need to be built, but also have churned out 8,330 gallons of ethanol by that deadline.

Because it takes just more than a week to process the corn-based, environmentally-friendly fuel, Fagen needs to have the plant done by June 17, 2004, -- a mere 11 months away.

"We've never built a plant in less than 1212 months," Morris admits. "This will be the first."

And being the first means construction will go on at all costs.

If buildings aren't enclosed by the time snow flies, tents will be erected to shield workers and the ground will the thawed, Morris said.

"We can't wait until the end," to make up for lost time, he said. "We can't afford to get behind."

So foundation work is underway now.

About 20 workers were on site last week. The number is expected to grow to 40 this week and increase by about 10 to 20 a week until reaching 140 where it's expected to stay until spring.

"There's a temporary boost in the economy with a lot of outside money coming in," during construction, said Central City Economic Development Director Cliff Mesner.

Then come the long-term advantages of using local corn, which is expected to increase per bushel prices by two to five cents; a $1.8 million annual payroll; $400,000 in real estate taxes; $600,000 in personal property taxes; and a sharing of utility costs with the City of Central City.

Once the plant is operational, it's expected to generate another 60 to 90 off-site jobs relating to trucking, maintenance and supply, Morris said.

Although final decisions are yet to be made on water, sewer, gas and electric service, the city is expected to receive about $1 million in tax-increment financing on the project for water and sewer line extensions to the plant site east of town, Mesner said.

Another $2.5 million of tax-increment financing, an incentive that uses property taxes to pay for improvements, will be used for on-site upgrades such as a new road.

Gas negotiations are underway with Kinder Morgan, Morris said, and Southern Public Power District is providing electricity during construction.

Fagen and Central City have also worked out a deal to use clean discharge from the city's wastewater treatment plant to meet the ethanol plant's 300,000 gallon a day demand for processing water.

"We're just happy to be moving forward at this point," Mesner said. "We've got things ahead of us now and we know what we have to do we can control our own future."

Morris is equally excited about having the project into the construction phase.

"We are excited by and impressed by Central City and what they've done," Morris said. "They've done a great job and supported us during the permitting process. The luster hasn't worn off."

He's also looking forward to having the $60 million plant done and utilizing 15 million bushels of corn a year to produce 40 million gallons of ethanol.

"We're excited to put Nebraska corn in gas tanks around the country," Morris said.



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