Slow start for Toledo-Oregon coking factory draws ire

7/14/2008

On paper, construction of a multimillion-dollar coking works on the Toledo-Oregon border near the Port of Toledo began months ago, to preserve regulatory permits for the project that otherwise would expire.

But in reality, not a shovelful of earth has been moved and officials working on the project now say that won't happen until late next month at the soonest.

The drawn-out process to resolve remaining issues could intensify a rift between the city of Toledo and the Toledo-Lucas County Port Authority. Mayor Carty Finkbeiner has complained in writing that he hasn't been kept updated on the project, but a port authority official responded that mayoral meddling was impeding progress.

"The project sponsors have related to me several very uncomfortable and heated discussions with [the mayor's] office," wrote Matt Sapara, development director for the port authority. "Due to these actions, I have been instructed by the project sponsors to not share detailed information with the city of Toledo."

The debate over the coking works arises during a time when relations between the mayor and the port authority are strained.

Mr. Finkbeiner last week asked the board to conduct an investigation and suspend port authority President James Hartung over allegations he had an extramarital affair with a lobbyist.

Mr. Sapara, in an interview with The Blade, said though the coking works project appears to be moving forward, there's still a chance it will die on the vine.

"It's very small, but there's a risk, absolutely," that the plant won't be built, Mr. Sapara said.

"It's not a done deal until it's a done deal," Mr. Hartung said. "This is a big project, and in big projects there are a lot of moving parts and complexity. The public sector is not always privy to what's going on behind the scenes. At our end, we're ready to go."

Among the issues remaining to be settled, a project representative said, is lining up the full package of investment needed to build the $800 million FDS Coke LLC plant; finalizing the developers to handle the actual construction, and completing the regulatory approval process for a related power co-generation plant that will use coke-oven heat to make steam to generate electricity.

"We're on target to meet our financing schedule, and expect to have a construction bond issuance in mid-October, or at least by Thanksgiving," said Lance Traves, president of Labyrinth Management Group, Inc., the project's technical adviser.

"With today's economy, with everything going south, everyone's being real careful and financing's been tough," said Tom Kovacik, a consultant on the project.

"When you're talking about $800 million to $1 billion, you need some big investors. But I'm 99.9 percent sure there will be a groundbreaking in the fall," he said.

Mr. Traves added that Ohio Power Siting Board approval for the co-generation plant proposal is a prerequisite for any financing.

A 60-day public comment period for that permit application began last month.

The FDS plan calls for construction on 51 acres owned by the port authority near the Port of Toledo and the Maumee River's mouth.

FDS officials have promised about 150 jobs at an average salary of $45,000, while critics have argued that the payroll won't be worth the pollution such a plant would emit.

But since last winter, when planners said construction would begin by early spring, FDS has issued no new ground-breaking target dates.

That lack of visible progress led to a terse note to the port authority on June 24 that Mr. Finkbeiner and his Oregon counterpart, Marge Brown, co-signed complaining that they had "heard virtually nothing regarding the coke plant for months" and requesting a status report.

In a memo to Mr. Hartung that he, in turn, forwarded to the mayors, Mr. Sapara wrote that he had provided updates to Mrs. Brown earlier in June and in "candid conversations" on previous occasions to Mr. Finkbeiner's office.

"Perhaps with the best of intentions, those candid conversations were then used to impact the project in a manner that caused additional delay," Mr. Sapara wrote.

In his cover letter, Mr. Hartung added that he had been "led to believe from other sources that Mayor Finkbeiner has been meeting regularly, in private, with two investors in the project. I would surmise they are a source of information superior to that of the port authority."

In response, Mr. Finkbeiner sent another letter to the port authority saying he and Mrs. Brown remained uninformed about the project's status.

"As we are expected to provide incentives for same, we both expect periodic updates on this important project," Mr. Finkbeiner wrote.

Mrs. Brown was not available for comment Friday.

Contact David Patch at:

dpatch@theblade.com

or 419-724-6094.