Consortium dumps Schneider trash-to-ethanol deal
By Carrie Napoleon Post-Tribune correspondent March 26, 2013 7:00PM
Updated: April 28, 2013 7:04AM
The deal to transfer ownership of the long-delayed trash-to-ethanol plant in Schneider has been scrapped.
SMC LLC, the local construction consortium established to purchase the technology rights and contract for the proposed project, cited an inability to obtain adequate funding — the same issue that earlier plagued Powers Energy of Indiana LLC.
In a letter to the Lake County Solid Waste Management District, Merrillville attorney George Carberry, who is representing SMC, writes: “SMC has been engaged in a comprehensive due diligence review of the feasibility of taking over from Powers the development and funding of an advanced bioenergy facility. … As a result of this review, it has become apparent that SMC is unable to generate the financing necessary to advance the project to its satisfaction.”
Carberry writes SMC is unwilling to proceed further with the purchase transaction with Powers and has terminated its contractual arrangements pertaining to the development and funding of the project with the company.
A statement on behalf of the Solid Waste Management District, provided by attorney Clifford Duggan, notes the matter regarding the trash-to-ethanol plant was already scheduled for discussion at the April 18 district board meeting.
The board had agreed to give SMC until the end of the first quarter to see if the first waste-to-ethanol plant in Vero Beach, Fla., would begin producing commercial-grade ethanol. The date that plant was to be online has been delayed more than 10 months.
“Pending District Board action, and in light of the legal issues which may arise from this matter, there will not be any public comment other than the District Board action itself,” the statement reads.
The LCSWMD board previously had found Powers Energy to be in breach of contract for failing to meet numerous specified deadlines for the acquisition of funding and launch of the project.
When reached Tuesday, Griffith’s representative on the board, Rick Ryfa, who has repeatedly been opposed to extending the contract for the project after the Powers breach of contract, said he was not aware SMC had decided to quit. He deferred comment until he could review the letter and speak with Duggan.
Schneider Town Council President Richard Ludlow said he was surprised by the news. As recently as last week, Ludlow said, he had received optimistic input from SMC.
“I’m extremely disappointed they pulled out. I don’t know exactly what it means yet,” Ludlow said, adding he would have to discuss the matter with the town’s attorney. SMC’s departure leaves the contract with Powers in limbo.
“It throws it back on Powers and the board is not very happy with him,” Ludlow said.