Coke plant owners sign deal with 2 contractors

12/15/2006

Plans for building the proposed $600 million FDS Coke Plant on the East Toledo-Oregon border have a new pulse, but only because the group behind the project thought it was within hours yesterday of having its hard-fought and contentious environmental permit nullified.

Francis X. Lyons, a Chicago attorney representing U.S. Coking Group, told The Blade it was his understanding that the permit that would allow construction of the proposed plant would be nullified at the close of business yesterday if the project was not physically under way or locked down with signed agreements.

Groundbreaking has been pushed back until at least spring 2007.

But about 10 a.m. yesterday, Mr. Lyons - a Midwest regional administrator for the U.S. Environmental Protection Agency under former President Bill Clinton - notified the Ohio EPA via e-mail that U.S. Coking Group signed "binding agreements" with the project's two prime contractors.

Neither contractor was named.

One will serve as the project's main technical adviser; the other will be the chief builder, Mr. Lyons said.

U.S. Coking Group had 18 months to get the project started when the permit was issued on June 14, 2004, by the Ohio EPA. Last Dec. 14, the state regulator - agreeing there was a need for more time because of project modifications - granted U.S. Coking Group's request for a one-year extension.

A consortium of public officials plans to gather at 10 a.m. today at One Maritime Plaza to promote the project as a boon to the region's economy.

Those scheduled to speak include Toledo Mayor Carty Finkbeiner and Oregon Mayor Marge Brown, plus Tina Skeldon Wozniak, president of the Lucas County commissioners; James Hartung, president and chief executive officer of the Toledo-Lucas County Port Authority; William

Carroll, the port authority's vice chairman, and Mike Cicak, identified as an FDS Coke Plant principal and representative.

U.S. Coking has declined to reveal names of its investors.

Matt Sapara, the port authority's project development manager, said the port authority is not one of them. Its interest will be in leasing 80 acres of port land near the Maumee River's mouth to U.S. Coking Group. The land is now under lease to CSX Transportation, he said.

Mr. Sapara called the signed agreements the "last major regulatory hurdle" for a project that is to employ 150 people and take two years to build.

"The project is a go. A lot of people won't believe it until they see a building, but the project absolutely is a go," Mr. Sapara said. "We're obviously very excited about it."

The average salary figure for those jobs - $45,000 a year - was put in writing for the first time last night via a media advisory about today's event.

The advisory said there will be 1,200 to 1,500 construction jobs, too.

The Port Authority claimed total investment in the project could reach $800 million.

The plant began as a $300 million project.

Costs rose by millions of dollars in response to environmental controls that the Ohio EPA imposed for mercury and other pollutants at the request of the U.S. EPA, the Michigan Department of Environmental Quality, Environment Canada, and a slew of activists and area residents.

FDS Coke Plant will produce coke, a component of steel. Much of the U.S. steel production has been outsourced to other countries because of pollution associated with coke production.

The project's opponents were infuriated in 2004 when the Ohio EPA acknowledged that some of its agency staffers and those from the Toledo Division of Environmental Services worked nights and weekends to help U.S. Coking Group.

The applicant, with the help of state and local regulators, beat the federal EPA deadline for a tougher regulation for ground-level ozone, or smog, that went into effect in the summer of 2004.

Overtime costs were passed along to U.S. Coking Group, the Ohio EPA has said.

Last night, Dina Pierce, Ohio EPA spokesman, confirmed the agency was in receipt of the signed agreements between U.S. Coking Group and its prime contractors.

She said one of the Ohio EPA's lead attorneys believed that U.S. Coking Group might have had more time, given major modifications to the permit that were issued on Sept. 20, 2005.

That, conceivably, could have given U.S. Coking Group until March 20, 2007, Ms. Pierce said.

"The [original 18-month] clock would have started over," Ms. Pierce said. "I think the company was playing it safe."

U.S. Coking Group did not want to lose the permit and reapply. Doing so, officials have said, would have likely killed the project because of compliance costs associated with the new ozone regulation.

Contact Tom Henry at:

thenry@theblade.com

or 419-724-6079.