Developers looking to build $125 million ethanol plant in Cherry Point area
If a local developer succeeds in his plans to create Whatcom County’s first ethanol plant, it could also be the first of its kind in Washington state.
Bill Grant, President of Gold Star Resorts, has begun a feasibility study with his group, Vitality Fuels, to look at opening an ethanol plant near Cherry Point that could cost $125 million, employ 80 workers and produce up to 110 million gallons of ethanol fuel per year.
Currently, there are no ethanol plants operating in Washington, although several proposals for plants in various stages of development exist around the state, said Tony Usibelli, assistant director for the Community Trade and Economic Development’s Energy Policy Division. Grant, whose company developed The Sandcastle and WorldMark resorts in Birch Bay, said he has become more interested in biofuels since President Bush began encouraging national ethanol production in the last few years as an alternative to importing oil.
“It’s an area that interests me because it allows you to feel good about a business you’re investing in because it assists in offsetting global warming,” he said.
Grant said he’d like to have the feasibility study completed by the end of April, and based on that information, have the plant up and running by 2008. He said the plant would likely take about 18 months to complete.
The group is looking for 10 to 40 acres of land in the Cherry Point area for the plant. Grant said the area would allow for close proximity to rail and water supply in an industrial area, as well as being close to a potential purchaser like BP.
The feasibility study will examine three scenarios for the plan: a plant that produces 10 million gallons per year, 25 million gallons per year, or 110 million gallons per year. Grant said the group would like to achieve the latter scenario, which would cost about $125 million to finance and employ about 80 workers.
Financing would come from a combination of equity and debt, Grant said — about $25 to $30 million coming from public trading or an immigration fund, which allows foreign investors to qualify for a green card. Grant said he is in contact with several potential foreign investors interested in the project.
The size of the project would depend on the amount of raw materials available to produce the fuel, Grant said.
The project’s primary bottleneck, he said, is figuring out where the plant could get enough feed stock to produce the ethanol. Initially, Grant said, the plant would use corn, possibly from farms in lower British Columbia, but then change over to fibrous plants like poplar trees and switch grass that are more widely available.
Grant said the group, which includes a finance specialist, construction engineer, chemical engineer, and an organic farmer, have informed county planners of their plans for the project.
Tower put on hold
Developers of the proposed seven-story, mixed-use building on East Chestnut Street and Cornwall Avenue, known as Chestnut Park Condominiums, have put the project on hold.
Developer David Hovde said an increase in the cost of building products, such as concrete, steel and copper, has played a part in putting the building on hold. He said the developers still intend to build on the site in the future, but currently have no time frame.
Last summer, the developers announced a reduction in size for the project’s plans, from 11 stories to seven stories, and 58,000 fewer square feet of total space, with the idea that slimming down the project’s size would increase interest from financiers.
The developers received verbal agreements from several banks to finance the project, Hovde said. But when material costs went up, the developers decided not to move ahead with financing.
Hovde said he is currently working to revive the project, but did not choose to say how.
“Hopefully, this would get it back on track,” he said of his current efforts.
So far, none of the recently proposed high-rise condo towers in Bellingham have broken ground. Here are updates on the status of those projects:
• Bay View Tower: Robert Howe, the new project manager for the proposed 23-story tower at 1217 N. State St., said the developers hope to break ground on the project this summer instead of this spring, as former project manager Will Honea said in December. In terms of financing, Howe said the project has several interested parties, but nothing official yet.
“I think (financing) is just challenging to get. It’s a large project, so you need a large financial institution to finance it,” Howe said. “We’re going into new territory and it’s taking lenders a long time to get interested in this market.”
Honea said in December that about 85 percent of the condos were reserved. However, Howe said some of those people have backed out of their reservations, making only 70 percent of the condos currently reserved.
“I think they’re waiting for an announcement that we’re going to start construction,” he said.
• Morse Tower: Developer Rick Westerop said he still plans to move ahead with his proposed 18-story tower on the corner of East Maple Street and Railroad Avenue; he said he hopes to break ground on the project this summer.
• Cornwall Place: Developers for the proposed 15-story Cornwall Place project on the corner of Cornwall Avenue and East Maple Street are continuing to work on the design stage of the project, said Chris Benner, vice president of Cabochon Construction & Development.
Developer, city planners at odds
The City of Bellingham has allowed Fairhaven Harbor developers Ted Mischaikov and Rick Westerop to resubmit a new design-review permit for the project without relinquishing their existing one.
However, if the developers choose to pursue a new application that includes a building height of more than 85 feet, they must include a revised SEPA checklist, which includes conditions that Mischaikov contends are unfair.
If the city removes those conditions, Mischaikov said, he and Westerop would resubmit a design-review permit for the slimmed-down version of the project.
“If we could remove the nonsense associated with a revised design, that’s clearly the desire and goal of Rick and I,” he said. “We will pursue a continued effort with the city and with the neighborhood to arrive at tenable conditions for development of the (slimmed down) project.”
In February, the city stated it could not issue a design permit for the developer’s most recent, slimmed-down version of the project that featured plans for a 102-foot tower and more green space because the original environmental review for the project was only good for an 85-foot tower — a mistake on the city’s part. The developers had already received a design-review permit for plans that featured a 110-foot tower and a larger footprint.
The city’s decision gave the developers four options: to move forward with the project with the tallest building reduced to 85 feet, and lose the existing permit; to resubmit a new application with a new SEPA and lose the existing permit; to appeal the decision and lose the existing permit; or to withdraw the existing application to amend the design and proceed under the original design-review permit, according to Mischaikov’s attorney, Doug Robertson, and the city’s assistant attorney, Alan Marriner.
Mischaikov responded later that month, saying they would pursue the last option — to move ahead with the existing permit for a larger tower.
However, Robertson sent the city a letter soon after requesting a code interpretation for its decision — a formal process that asks the city to clarify what the code means, he said.
In response, the city said the developers could reapply for a brand new design-review permit without giving up their existing one, with the new SEPA requirement.
The developers wanted to ensure they had the existing permit in case the new design-review application was not approved, Robertson said, or was faced with another appeal similar to one made by developer David Ebenal and two Fairhaven residents last spring, which the hearing examiner overturned.
The developers can have two design review permits, but they must choose one before applying for building permits, Marriner said.
The new SEPA checklist would include an examination of the project’s impacts upon view, shading, wind and historic preservation.
Marriner said this condition was added to evaluate the effects of any building taller than 85 feet on that property. He said these conditions were not required for the project’s previous SEPA checklist because it was for a building less than 85 feet.
Mischaikov said he thinks it would be more appropriate to compare a new design to the project’s existing permit.
“For example, how is it impacted if we build a skinny tower versus a fat tower? It’s important that they recognize our new SEPA should compare with our existing rights,” he said. “We don’t want it compared to raw land, because we know they don’t want our building, and they are going to take every possible step to hurt us through the new checklist.”
Mischaikov said the new SEPA conditions were esoteric.
“We have no idea how you measure wind, glare, and shade. How do you measure the environmental impact of wind?” he said.
He added that requiring an examination of historical relevance in a SEPA checklist was inappropriate, especially since the project is not within Fairhaven’s historic design-review core.
Mischaikov said the developers’ original budget for entitlement was less than $500,00 for the project that they proposed in December 2004, and to date it has exceeded $1 million.