After delaying a decision for three days, Alpena Municipal Council voted 3-1 to approve a renewable energy renaissance zone on property currently owned by Decorative Panels International.
Atlanta-based American Process Inc. and San Antonio-based Valero Energy Corporation plan to form a new company - now being called Alpena Prototype Biorefinery LLC - that would process DPI's waste water and turn it into ethanol fuel and sodium acetate - a deicing agent.
DPI would sell the land needed for the plant to Alpena Prototype Biorefinery, and sell the new company it's waste water.
The renaissance zone allows the company to operate without paying the Michigan business tax, and real and personal property taxes for 15 years, with taxes being phased back in at 25 percent per year over the last three years of the tax exemption period.
The council delayed a decision during Monday's meeting because members wanted more time to investigate the situation and talk to residents.
Councilman Shawn Sexton represented the only opposing vote to the creation of the zone, and had several questions for Valero representative Theodora Retsina, who communicated with the council via webcam.
Sexton said he would like to see the company use the city's local bidders preference for contract work on the facility. The policy entails bidders based in the City of Alpena to match a low bid if their bid is within 7 percent of that bid. Bidders in Alpena County are offered the same benefit if they are within 5 percent.
Sexton said the city is giving up a lot in the form of taxes and potentially air quality by allowing the zone, and having the companies honor the bidders preference is a reasonable request in return.
"The way the local bidders policy is written, I don't think it's too much to ask," he said.
Retsina said Valero doesn't use those policies because it causes non-local bidders to be less aggressive in their bids, but she did say the company has been proactive in getting bids from local contractors.
Sexton also asked if there could be an agreement between the city and the new company to ensure if there are any odor or emissions problems, they would be remedied by the company.
Because the new plant will reduce usage of DPI's lagoon system, Retsina said odors should be reduced, and said the company would work the city if odor issues arose - but said they couldn't enter an agreement at that time because odor issues are subjective.
"It is not prudent at this moment to sign a legally binding agreement," she said.
Sexton also asked if infrastructure could be impacted by the new plant.
City Engineer Rich Sullenger said there is an existing truck route to the facility.
"I don't see it being a detriment. The log trucks that are going in there now are probably more significant," Sullenger said.
Had his vote been the difference between the creating the zone or not, Sexton said he may have voted for the measure.
The plant is expected to produce about 930,000 gallons of ethanol and about 2,000 tons of sodium acetate per year - and cut DPI's water treatment costs.
A $4,000,000 state grant has been received for the project, and Valero has committed $8,000,000 to the project. A U.S. Department of Energy grant is being sought for the $23,000,000 project, and any shortfall will be covered by loans or bonds.
The plant is expected to create 10 full-time jobs, which Retsina said likely would be hired locally with training to be done at Alpena Community College.
Councilman David Karschnick said the plant offers Alpena the chance to be on the cutting edge of new industry, which he said is increasingly important since local manufacturers are laying employees off.
"You've got to start somewhere, and I think this is a great start," Karschnick said.
Retsina stressed this was a green project, saying noise, air and water pollution will be decreased compared to the current rate at the site.
Dennis Werblow, director of environmental affairs at DPI, also said the biorefinery will allow DPI to reuse some of the water it uses.
"This is an environmentally responsible project and a forward-thinking project," Retsina said.
The city will now send paperwork showing their support for the renaissance zone to to the state. The Commission of Agriculture and Michigan Strategic Fund board must approve the zone before the state administrative board gives final approval.
If all of that happens, the zone would go into effect on Jan. 1.
Sean Harkins can be reached via e-mail at sharkins@thealpenanews.com or by phone at 358-5688.