In unanimously voting against payment, committee members express disappointment that the invoice from Egan Public Affairs was even submitted in the first place.
An advisory committee coordinated by the Crookston Housing & Economic Development Authority (CHEDA) to stay on top of things and consider various expenditures as Epitome Energy founder and CEO Dennis Egan works through the arduous air permitting process and other required environmental due diligence has unanimously voting against making a $10,000 payment to another Egan-owned firm, Egan Public Affairs, which submitted an invoice for payment to the committee.
CHEDA Executive Director Craig Hoiseth acknowledged that the “elephant in the room” was Egan requesting payment to his public affairs firm, the money for which would come from proceeds from a $250,000 loan previously approved to Epitome and Egan, a loan funded by both the City of Crookston and CHEDA.
Committee members voiced general displeasure and disappointment over receiving the invoice, submitted by Redwing, Minnesota-based Egan Public Affairs, which sought a $10,000 reimbursement for various costs related to numerous meetings Egan attended this past November and December related to the air permitting process for Epitome Energy.
“I have a hard time with this. He brought no money up here and now he’s billing us, essentially, for his project,” committee member Craig Buness said. “…We’ve got constituents we have to answer to. I’m just uncomfortable with it.”
The advisory committee makes various recommendations that are then considered and voted on by the full CHEDA Board of Directors. Even if the committee green-lighted the $10,000 payment, some committee members said they didn’t think the CHEDA Board would follow suit when they meet Jan. 28.
“I just don’t see it. It’s nothing personal, but if you’re going to be a player in this, where’s you’re contribution?” committee member Nick Nicholas said. “I know it’s real money for him, but I’m surprised he sent (the invoice).”
After talk in mid-2019 about a potential $1 million loan to Egan to help bring the estimated $225 million, 42-million annual-bushel soybean crush and biodiesel facility that would be built on around 50 acres of 106 acres of City-owned land on Crookston’s southern edge, the dollars were eventually dialed down and the City and CHEDA (the latter using some funds they received when Crookston Jobs, Inc. dissolved) OK’ed a $250,000 loan to Egan to help pay bills as the permitting process advanced.
Hoiseth told the committee this week that when the talks involved a $1 million loan to Epitome, there were discussions about Egan’s firm potentially being reimbursed for its work. But nothing was ever agreed to on that front, he noted, adding that when the amount of the loan was scaled back, there were no discussions about reimbursing Egan Public Affairs. Hoiseth noted, however, that the language in the loan agreement would not preclude Egan from submitting invoices for payment to his public affairs firm. That’s when he brought up the “elephant.”
In late 2019, the advisory committee approved the first bills that came in, totaling around $49,000, which were covered by loan funds. This week, the committee unanimously approved a $14,750 invoice to Industrial Process and Management Consultants, LLC of Erie, Pennsylvania for work related to the air-permitting process.
But they wanted nothing to do with the Egan Public Affairs invoice.
“I’m quite disappointed and I will relay that to (Egan),” committee member and CHEDA Board member Craig Morgan said.
“If he was rolling along and everything was going fine, possibly (he’d consider approving the invoice payment),” committee member and CHEDA Board President Kurt Heldstab added. “But the way everything is going right now, I’m dead-set against this. …We said we’d support him for the air-permitting and all that. This is part of his job, to get this thing into place.”
Committee member Don Cavalier, who made the motion to not make the payment to Egan Public Affairs, said the timing of the invoice made it all the worse. It’s been acknowledged that, due in part to the historically bad 2019 harvest, the Epitome Energy equity drive is off to a slower start than anyone hoped back in September 2019 at a celebratory open house at Valley Technology Park. Then, last week, the area’s legislative contingent in St. Paul, State Sen. Mark Johnson and State Rep. Deb Kiel, made it clear to City and CHEDA leaders that they had no interest in introducing at the 2020 session a $7 million bonding request on behalf of the City to cover around half the cost for the infrastructure necessary for the Epitome project as long as Egan or any other stakeholder wasn’t willing to put in writing that they’d be responsible for the other half of the cost.
Some committee members also noted the fact that the invoice wasn’t itemized; it simply lists who the meetings were with. But above the list of meetings are the words “Retainer November and December 2019.” That raised more eyebrows.
“Who’s retaining who?” committee member and CHEDA Board member Leon Kremeier wondered. “He came to us.”
Asked if he was expecting the invoice or if he was caught off guard, Hoiseth said he wasn’t surprised, while stressing that “in no way” did he agree previously to reimburse Egan Public Affairs with funds from the $250,000 loan.
“He’s doing a lot of work on air-permitting,” Hoiseth said. “It’s a big job, with a lot of meetings and a lot of details.”
“But that’s what you do,” Morgan said.
“That’s what you do,” Hoiseth responded.
It's likely that the full CHEDA Board when it meets next week will still discuss the invoice.