City Council okays Epitome Energy letter of intent after clarification
Crookston City Council ultimately approved a letter of intent with Epitome Energy LLC at this week’s meeting, but not first without hesitation and the need for clarification from the city’s attorney on what it meant. In the first round of votes, council members Clayton Briggs and Dylane Klatt voted against approving the letter and Kristie Jerde abstained stating she needed more information and felt there had been “a lot of moving goal posts.” The resolution failed to pass and Mayor Dale Stainbrook stepped in to say it was just a letter of intent and that nothing was “written in stone” with Epitome.
City Attorney Corky Reynolds came to the podium to explain that Epitome’s letter of intent simply meant that terms of the future development agreement were up for negotiation between the proposed soybean crush facility and the city.
“The letter of intent is that you agree to negotiate, it does not bind anybody to do anything other than negotiate,” he explained. “Those negotiations may break down, they may never happen; this letter of intent is based on those timelines set by Epitome Energy and we will have an agreement by December 31 or we have nothing.”
Epitome’s land option agreement, which was also on the meeting agenda for approval, also set a deadline of December 31, 2021 and Reynolds told the council if they didn’t approve the letter of intent then the land option agreement would not make sense.
“I understand hesitancy, this project needs more definition,” Reynolds added. “We can’t get every little specificity and we need to negotiate. There are some very tight timelines for Epitome, essentially four months.”
Jerde told the other council members and city staff that, for her, Epitome CEO Dennis Egan has not instilled confidence in the project and added later that’s it’s “better to over promise than under deliver.”
City Administrator Amy Finch told the council that Egan’s team had drafted the letter and agreed with the city’s changes. The letter was dated for August 23, 2021 and said “Except for the requirement of the parties to enter into negotiations, this LOI is not binding on the Parties; it is only an expression of the basic terms and conditions that the Parties presently intend to negotiate and incorporate into a formal written development agreement which will govern the Project.”
Before Briggs, Klatt and Jerde each asked for a reconsideration of their vote and changed it to approve the letter, Reynolds said the $300 million dollar project with “exceptional” work by the city and state was a “very big deal” and that the developer’s agreement would set some specificity in the parameters. He emphasized the importance of allowing the negotiations to happen so that an analysis of the city’s position could be done. Council member Steve Erickson told the members with reservations to “keep an open mind” with the whole process as “it doesn’t just happen over night.”
“At the end of the day we almost threw this out the window,” Erickson added. “We’re not very inviting with the city if we don’t welcome this letter of intent.”
Council member Wayne Melbye agreed with Erickson saying if someone needed more information they should have gotten a hold of Finch so she could get Egan to attend or appear over Zoom so they don’t stall the project.
LETTER OF INTENT
In connection with the project, Epitome’s obligations include the land purchase, building the soybean crush facility (30 million bushel a year), obtaining all state and local permits and variances, providing job opportunities to the surrounding community, meet monthly with representatives of the city and/or CHEDA regarding the project, and schedule/facilitate community meetings on a needed basis.
Requests by Epitome of the city include creating a 9-year Tax Increment Financing district for the project, upgrade the southern road accessing the facility to a 10-ton road, extend the existing agricultural innovation road to handle truck and employee traffic to and from the facility, reduce water and sewer rates for the facility by 50% for at least five years, grant vacation along South Front Street for the purposes of expanding rail tracks to service the facility, make necessary introductions and assist Epitome in obtaining an easement over or purchasing property along the southern edge of the project site for private road access, and work with Epitome, state and federal agencies to obtain necessary infrastructure funding related to the project.
Tentative proposed timelines for the project include:
• Obtain MPCA Air Permit by June 30, 2022
• Close on project financing by September 30, 2022
• Break ground by September 30, 2022
• Start-up of facility by first or second quarter 2024