Baard options still open

EAST LIVERPOOL - The Columbiana County Port Authority has again extended a series of property purchase/option agreements for the Baard Energy project, but this will likely be the last time.

The port board on Monday extended until Dec. 31 the purchase agreements for 14 of the 17 properties whose option agreements expired June 30. The extensions for the remaining three property are under a different schedule.

This is the third time the port authority has extended the agreements since it was awarded a $4.5 million state loan in January 2009 to purchase 522 acres outside of Wellsville on behalf of Baard Energy, which intends to build a $6 billion plant that converts coal and biomass into synthetic jet and diesel fuel. The port authority has been forced to extend the option agreements because of Baard's inability to secure financing for the project.

The port authority had until June 30 to close on the loan and purchase the land, or return the $4.5 million, but the state granted a three-month extension to give Baard more time to secure enough financing for the project to go forward.

Port CEO Tracy Drake said Baard Energy made sufficient progress in obtaining private investors to convince the state to grant the loan extension. The port authority is prohibited from drawing down on the loan until Baard has sufficient private financing in place to begin the year-long site preparation.

"We've told Baard all along the port authority isn't willing to take the risk, to draw these monies down and be at risk while you decide what you are going to do," Drake said.

The loan converts into a grant if construction of the plant is completed within 24 months of the loan closing and Baard Energy meeting other goals. When this occurs, the port authority would no longer be required to repay the money.

The extension agreements granted Monday have two new clauses that provides additional benefits for the property owners. The first one requires the 14 landowners to be paid a combined $200,000 by Baard should the port authority be unable to act on the purchase agreements by the Sept. 30 state-loan deadline because of the company's failure to secure adequate financing by then.

The second change voids the requirement that the previous option payments be applied toward the purchase price.

"When the final purchase is done on the property, the money that had been paid heretofore on the options will not be counted toward the purchase, which is a pretty big deal for the property owners," Drake said, adding the option payments to date exceed a combined $700,000.

The combined cost of purchasing the 522 acres, including the options, was originally set at $6 million. In addition to the $4.5 million loan/grant, the state also contributed another $500,000 grant toward the property acquisition. Drake said Baard will pay the difference between the whatever the port authority applies toward the land acquisition and the final cost.

tgiambroni@mojonews.com