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Published: Friday, 4/15/2005

Lenawee eyes tax break for ethanol plant

BY GEORGE J. TANBER
BLADE STAFF WRITER

The beleaguered ethanol plant project in Riga Township, Michigan, received a boost this week when the Lenawee County commissioners approved the concept of a tax incentive package for the company.

Under the proposal, Great Lakes Ethanol LLC of Adrian will forgo paying township and county taxes for 12 years and state taxes for 15 years. The proposal has to be approved by the township trustees, who will vote on the issue next month.

Great Lakes Chairman Jeff Ehlert said he is hopeful the trustees will approve the measure.

"It would really help us get our feet on the ground," he said.

"We'll be able to do several more things during start-up to make the property more attractive and beneficial to the area."

Rusty Smith of the Clean Lenawee Environmentally Area Resources - a local group opposed to the plant - called the commissioners' vote unfortunate.

"I think the commission is going to rubber stamp anything that comes before them," she said.

The exact savings to Great Lakes has yet to be determined. But county Commissioner Dick Bailey said that by the 13th year, when the company will have to start paying taxes to the township and the county, its bill will be around $30,000 - much greater than the earlier years.

"They [should] be more than able to pay it then," he said. "It makes a whole lot of sense to do this because they need a break for the early years when they have to pay their investors and the banks."

Mr. Bailey said the plant is important to the area because it will create jobs and bring in a number of spin-off businesses.

Township trustees, who have supported the project from the start, could not be reached for comment.

Ms. Smith said it will be a difficult decision for the trustees to make.

"You're looking at a lot of years with no money being paid [to the township]," she said.

Last year, the trustees agreed to rezone a 136-acre site near Silberhorn and Cemetery roads, just south Blissfield and west of U.S. 223, from agricultural to heavy industrial to allow the plant to be built.

Supporters of the project cited the plant's estimated 60 permanent jobs as well as creation of another outlet where local farmers could sell their corn.

But Ms. Smith's group - expressing concern over the plant's expected environmental impact on their rural quality of life - gathered hundreds of signatures on a petition forcing a Feb. 22 referendum on the rezoning.

Great Lakes won the vote, and the project was a go again.

The ethanol project in Riga began in 2004 when Great Lakes was organized by a group of area farmers and businessmen led by Mr. Ehlert. Ethanol is a gasoline additive made from corn. It is distilled denatured corn alcohol. Its production leaves a byproduct called DDG, or dry distiller's grain, that is sought after as a protein-rich feed for livestock.

The plant's business plan also calls for capture of the food-grade carbon dioxide that also will be sold as a byproduct, likely to the soft drink industry.

The company set out to find a plant site, gain permits, win over residents, and raise the $30 million it needs to begin construction.

Mr. Ehlert said his company raised $15 million in its initial public offering. A second public offering was canceled because of the referendum. It will be reopened on May 1, and the company hopes to raise an additional $2 million to $3 million.

Mr. Ehlert said Great Lakes is close to signing a major investor, which he would not name, that could result in construction beginning June 1.

Ms. Smith said her group has not given up the fight to stop the plant.

"We still have lots of things going on," she said.

Contact George Tanber at:

gtanber@theblade.com

or 734-241-3610.



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