LA Company Buys Dinuba Biomass Plant

Dinuba - A Los Angeles based disposal company has purchased the 12 megawatt Dinuba Energy power plant where it expects to have a home for its combined loads of green waste and construction waste wood from the Southland.

Crown Disposal and its affiliate Community Recycling of Simi Valley have bought the facility from Fresno State University who has owned it for the past few years.

The plant had been gifted to the college from Yanke Energy who had operated the plant next to the old saw mill in Dinuba that has been closed for a number of years. Yanke will continue to run the plant for the new owner, says John Richardson, VP for Community Recycling. The new Dinuba plant will be called Community Renewable Energy Service and will sell the power to PG&E.

“We generate about 350 tons of material a day” collected from towns like San Bernardino that have contracts with the company, says Richardson. He says that other L.A. area recyclers generate about the same amount a day that is all hauled to the valley biomass plants to be burned.

“We supply material to biomass plants up and down the valley,” says Richardson. But with the recent uncertainty over the future of biomass - the state is considering withdrawing financial support to keep them running - Richardson said the purchase “could provide some stability and secure a market for our materials.”

Richardson says the cogeneration plant will continue to burn locally produced green waste at its current 30 to 40% of tonnage rate in the future. The state funds biomass plants based on requirements that they must burn locally produced green waste.

But the Valley Air District top official David Crow says the valley biomass plants have a key function - to burn locally produced green waste and wood material “ Importation of the material is less desirable from our point of view.” Crow says he was aware that a number of Los Angeles communities bring in material to burn at valley biomass plants motivated by the high disposal fees in the LA basin. “That motivation gets the materials to the gate of the biomass plants,” says Crow while farmers would otherwise do open field burning of orchards and green waste don’t have the strong motivation.

Cities throughout the state are under mandate to reduce the amount of materials going to their landfills by 50% and biomass material from urban areas can make up 30% or more of the tonnage.

This issue remains tops on the public agenda because of rising acknowledgment of our bad air and the role biomass plant plays in keeping our air from getting any worse.

The Air Board estimates that existing biomass plants in the valley prevent another 4.6 tons of Nox - a major precursor to smog - from entering our atmosphere. Biomass burning is said to be 96% cleaner than open field burning. A 1997 study found at one plant - Delano Energy - without the plant 7451 tons of pollutants would have been emitted from the material burned in the plant emitting just 262 tons of pollutants.

But the uncertainty over the future of these facilities remains very much in doubt.

Governor Gray Davis is seeking to cut the state budget where it can has proposed eliminating a $4 million subsidy to the plants like Dinuba, Terra Bella and Delano as of June threatening their viability. Because of the decline in energy prices, the power produced by biomass is not as competitive as it once was.

Some have argued that farmers must be prevented by ordinance from continuing massive open field burning providing an incentive to get the orchards chipped and material trucked to biomass plants where it can be burned far more cleanly.

Today there are some 30 biomass plants statewide - about half the number there used to be in the state.

Some air officials believe that biomass plants can play key roles but only if we see them as air scrubbers - not power producers. Structuring an incentive between the farmer, chipper, trucker and biomass operators must be in line - a sort of vertical integration of this business to insure a smooth operation.

Crow believes these biomass plants, that were after all creatures of federal energy policy back in the 80s, should be offered a federal tax incentive to keep them viable.

Crow says in a potential “tweek” of federal legislation with Senator Dianne Fienstein a decade ago there was a plan that could allow a tax credit to biomass operators if they collected material from the area in proximity of the cogen rather than the current law that says the materials have to grown on the site to qualify for the tax credit.

That little change in the law was never made.

Putting this twist on the current law could intensify the growth of woody materials by farmers near biomass plants providing some economic benefit for hard hit farmers. Biomass plants can also make renewable fuel like ethanol or biodiesel.

Crow says farm groups are meeting this month to discuss how they could reduce open field burning in a valley choking with heavy particulates already.

A recent study of the biomass industry in California suggests biomass materials from furniture, construction lumber and right-of-way tree prunings along with forest and woodland biomass is increasing as the state’s population grows. But of the 50 million tons of biomass generated in California biomass plants have used only 9 million tons. With the closure of a number of biomass plants the value of biomass used by the plants is down to 6 million tons creating a surplus of materials and driving down biomass fuel prices.

Biomass plants used to pay for materials as high as $40/BDT but now expect to receive feed stock for the plant for nothing.

So in the meantime, the biomass operators in the valley are happy to have LA’s waste trucked to their door, ironically becoming potentially a part of the problem of the valley’s air quality.

Richardson says purchase of the Dinuba plant does not include the 140 acre saw mill site that has been torn down now but is available for some other use held by Yanke.

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Porterville - Paso Robles based Pro Forms has purchased the vacant 176,000 sq. ft. former Standard Register building in Porterville. The 14 acre Plano St. property closed escrow December 31. The building would be Pro Forms largest plant by far, says president of the company Linda Keith. “We hope to fill it up” with machines and workforce that could reach 200, says Keith noting that initially they expect to hire about 50.

The facility has been vacant since Standard Register closed its forms plant in 2001. “The setup was ideal,” says Keith being a printing plant with a high degree of security.

Security is really the business of Pro Forms who plans to change their name soon to Pro Document Solutions, says Keith being that the company concentrates its efforts on producing security documents for customers world wide. “We do all the security documents for the country of Ukraine,” says Keith with lots of security features that remain hidden. “We do birth certificates and even labels on Vodka bottles,” says Keith who noted the company founded by George Phillips holds 27 patents on security designs. “After 911 security is a very big concern,” says Keith.

Keith says the company who has facilities in Visalia and Paso Robles also does many college transcripts to insure that a college not accept a grad student who is peddling a fraudulent transcript.

Government documents for Spain, Russia and Mexico are also customers.

The new Porterville plant is over three times larger than the current Paso Robles facility while the Visalia facility that employs 35 is some 33,000 sq. ft. All will continue operations.

“This plant essentially doubles our capacity,” says Keith who started with the company 18 years ago in the bindery department. “We’ve got some very big contracts pending and Porterville would do probably 65% of that work,” says founder George Phillipss. “They haven’t kicked in yet,” he says and the added work force depends on that.

While many printing companies and forms makers have been on the decline largely due to the popularity of the computer, this niche is a whole different ball game.

“There is a large skilled workforce in Tulare County” in printing, says Keith where companies have located and relocated in the past few decades. Unlike large urban areas its also not a union stronghold either but an area with lower costs than the coast region.

George Phillipss is “an old Porterville boy anyway,” says Keith and the company’s owner is still active in the business “still has nostalgia for the area.” Phillipss says he remembers the Porterville area fondly as a child and still goes camping regularly in Springville and Coffee Camp.

Keith says the company appreciates the welcome by Tulare County officials to the company’s plans including Tulare County Economic Development Corporation Linda Douglass and the City of Porterville’s Linda Wommack. She says Visalia plant manager Lonnie Marvin will manage the new Porterville facility.

One comparative website shows sales at Pro Forms hit $15 million in 1995.

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Hanford - Developers of a 25 acre shopping center anchored by a Walmart supercenter plan to formally file the center’s building plans with the City of Hanford the week of January 13. Both city sources and developer Bill Henry of Oakland based Henry and Associates confirm the filing although not the major anchor tenant.

“In a few days I will be able to talk about it,” says Henry who has worked on the project for almost a year. The center will be located right across the street from a new proposed Target anchored center being developed by Dave Paynter and the Hanford Mall across 12th Ave. The center will be at Mall Center Dr. and 12th Ave.

Unlike standard Walmarts, a supercenter features a full grocery store along with the usual general merchandise the existing Walmart store in Hanford sells. The company would reportedly leave their existing Hanford Walmart when the new 200,000 sq. ft. plus store opened.

Henry says the shopping center filing will begin the approval process that will require an Environmental Impact Report for the project. Henry says this process is likely to take only a matter of months to complete.

Walmart has announced an aggressive schedule to open at least 40 supercenters in California and has been scouring sites in communities up and down the valley for supercenter locations. In Bakersfield the company has acknowledged working on 3 sites for supercenters.

In Delano the company is working on a center on County Line Rd. In Visalia the company is working with a developer at a Demaree and Caldwell site. In Porterville the company is rumored to be working on a possible location at Jaye and Highway 190 across the street from the new Home Depot.

Supercenter plans are being monitored by existing grocery chains and their workers, a mostly unionized work force that feels threatened by Walmart. UFCW people are likely to show up at every community where a superstore is proposed to protest and attempt to derail the projects.

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Goshen - Western Pacific Meat Packing LLC - a start up firm planning a state-of-the-art slaughterhouse in Goshen - is giving up on its plan in Goshen this new year. The plan would have meant more than 200 well paying jobs for this economically depressed area. The project promised a payroll of $5 million annually expecting sales of $150 million a year.

“We’ve spent more than $300,000 and have nothing to show for it,” says company organizer Rod Balcao.

Last month the company had their day in court on a lawsuit brought by neighbors against the project’s EIR. The case was heard by Judge Paul Vortmann resulting from a challenge a year ago to the adequacy of the impact report filed on the project.

The suit brought under the California Environmental Quality Act (CEQA) allows lengthy challenges to projects delaying their start up and sometimes resulting in their demise. Western Pacific Meat Packing fought challenges at the Planning Commission, Board of Supervisors and now in Tulare County Superior Court for two years after two years of planning.

Once the Board of Supervisors approved the plan, the company bought 55 acres in Goshen which they will now put up for sale, says Balcao. Balcao is bitter over the experience.

But the company with a lawsuit hanging over their heads couldn’t raise the financing to do the big project that called for construction of a facility that could handle the slaughter of 800 to 1000 cows a day gleaned from the valley dairy farms. Balcao owns Chino Livestock Auction.

Dairy broker John Grimmius says the company tried to raise money from local dairymen who might supply the animals but says existing packing houses who have the business lined up now may have been a major hurdle to the new project. “There is fierce competition out there,” says Grimmius.

Critics claim the project would impact traffic and possibly draw a plume of pollution from the Visalia landfill into Goshen as it drew down water supplies from a well.

Already the company had to scoure the project area for endangered species forced to hire consultants at every turn to complete the process. Balcao tried to buy the neighbors property because of their objections but to no avail.

“This is a classic case of not-in-my backyard - using the CEQA process to drive away a bonafide company who no longer wants to pay the legal costs of fighting it,” says local engineer Mike Lamp.

Judge Vortmann is expected to rule on the case February 21, perhaps in WMP’s favor. “We may very will still win the case,” says Balcao, that would award a permit to the location making the land more valuable for another applicant. But Balcao says he has had enough of trying to do this in Tulare County even though this is the dairy capital of the US.

Dairy cow herds turn over every three years or so meaning there is lots of hamburger to be made here. WPMP’s business model was that what the area didn’t have was a modern slaughterhouse that had few outside impacts. Supporters expected if the plant had been built it would draw other food companies to use the meat for future processing of their own. Instead the For Sale sign on this land is going back up.

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Visalia - The City of Visalia and Kaweah Delta hospital are working on a possible trade of properties that could result in a new city fire station on Court at Noble - currently a KD parking lot. The city finalized a master agreement with the health care district this week that calls for a 30 acre hospital campus sprawling over 15 blocks in downtown over the next decade. That new campus will expand all the way to Johnson across the street from the city hall and police station.

Now comes word that the two sides are looking at a possible swap of the existing public safety property, Visalia Fire Station #1, for health care district land south of 198 on land that spans Court to Locust.

“It seems like an ideal location for a fire station,” says city council member Bob Link who worked on the master plan with Kaweah Delta. “Emergency vehicles can exit in any direction heading from there,” says Link.

The city has been looking to relocate the city hall and police and fire departments from the Johnson St. property and have suggested in the past few months at the likely use of the city hall block might be medical offices to complement the new $400 million regional medical campus.

Part of the agreement calls for closing off a number of streets in the KD master plan that could make it advantageous for city emergency vehicles to find a new home. The police department is working on a two precinct plan to disperse officers north and south including a new facility on NE Third expected to be in service perhaps a year from now.

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Visalia - The closure of the 94,000 sq. ft. House 2 Home and bankruptcy of the company last April has put a big hole in the Sequoia Plaza shopping center on South Mooney and a big hole in the center owner’s cash flow.

In November the lender on the center LaSalle National Bank filed a notice of default against the property owner listed as Glen Casper Trust for non payment back to August 2002 - an amount that has grown to $261,567.95 according to the notice as of Oct. 1, 2002.

The notice says that the property could be sold if the account is not brought current. Real estate sources say a notice of default sets in motion a 3 month timetable after which the property can be sold at auction.

But William Passo who heads up the management team that leases the center - Passo Realty - and set this deal up back in 1998 selling the asset to individuals seeking tax deferred investments - says the lender in this case “understands and has granted a one year forbearance agreement with the borrower” and that “no sale is pending” of the center that includes all the shopping center except for the Costco store that Costco owns.

“The lender doesn’t want this property and will grant us time to repopulate the center,” says Passo. That means finding a tenant for the vacant store a wall away from the Costco store.

Passo says he believes the coming of the big Packwood Creek Shopping Center “should be a positive thing for the area if it brings more traffic to Mooney Blvd.” He confirms many months of discussions with Costco over possible expansion into the House 2 Home space - formerly Home Base.

“There’s a 3-way discussion going on with the city, ourselves and Costco and now that the Holidays are over I’m hopeful something could develop,” says Passo. He says Costco’s desire to have a gas station on the property is something that could be accommodated at the center.

Still Costco - say knowledgeable sources - is in no hurry to make a deal even though they continue to explore their options including a site with the Orosco project or even a second location in town, says another local developer.

Kmart Woes

The fate of Kmart in the valley is another big retail question mark that could have some sort of answer later this month. Kmart closed many valley locations last year including all 3 in Fresno after it went into bankruptcy. Hanford, Madera, Merced and Porterville are all gone.

Now sources say a second wave of closures is in the works. Although stores like Lemoore, Visalia, Coalinga and Tulare reportedly do well for the company, the small numbers spread over the region could make these few stores ripe for closure.

If Kmart doesn’t have enough reason to shut down here, Walmart is trying to give them an additional push with their own valley expansion plan.

In Delano Walmart wants to locate on County Line Rd. across the street from Kmart. The site has caused some controversy in Delano since they will have to share the sales tax with the County of Tulare.

Kmart’s stock was deleted from the NY Stock Exchange after 84 years because its value fell below $1 - today selling at 35 cents a share.