PGP Appeals Ethanol Plant Appraisal, Court Rules in CASD’s Favor

CLEARFIELD – Pennsylvania Grain Processing LLC (PGP) appealed the tax appraisal of the former Bionol Clearfield LLC ethanol plant. However, Clearfield County’s appraisal has been upheld in court by the tax appeals board, according to Business Administrator Sam Maney of the Clearfield Area School District.

At Monday night’s Clearfield school board meeting, Maney said the former ethanol plant had an initial valuation of $168 million. Approximately one year ago, he said Clearfield County, Clearfield Borough and the school district had another appraisal performed after entering an agreement to share the costs.

At the time, he said they sought a more experienced outside firm, Industrial Appraisal Co. of Pittsburgh, rather than having it conducted in-house. He said the county had concerns over the ability of its tax assessment office to provide a satisfactory appraisal, as it didn’t have any experience with assessing that type of facility.

Maney said that the outside appraisal came in at $25 million and has since been appealed by PGP. He said PGP had its own appraisal performed and it assessed the former Bionol Clearfield LLC at $4 million. Under that assessment, he said the district would lose $375,000 to $400,000 annually.

He said the court upheld the county’s appraisal, but he wanted to make the district aware.

“The appeals board ruled in the district’s favor. I wanted to let you know because it might come back to court later,” said Maney. “If it goes to court, we’ll prepare to defend it.”

History & Background

Clearfield Bionol LLC initiated construction of the former ethanol plant in April of 2008. It started production at the $275 million ethanol plant early in its first quarter in 2010. However, in July of 2010, it announced that Getty Oil/LukOil would default its five-year contract to purchase the vast majority of the plant’s ethanol.

Bionol Clearfield LLC went into “hot idle” in June of 2011, before it, along with affiliates Bioenergy Holdings and Bionol Holdings, announced filing for Chapter 7 liquidation bankruptcy in July of 2011 in the U.S. Bankruptcy Court in Delaware. In August of 2011, Bionol Clearfield LLC won a $230 million arbitration award from Getty Petroleum Marketing Inc.

The former ethanol plant was purchased for $9.35 million at an auction this spring, according to the Ethanol Producer Magazine.

In May, PGP closed upon the purchase of the former ethanol plant for its grain processing facility and began production in mid-July. The facility can process up to 40 million bushels of grain per year into 110 million gallons of ethanol and 330,000 tons of dry distiller’s grain with solubles, according to a previous GantDaily.com report.

PGP is an affiliate of Zeeland Farm Services Inc. (ZFS), a 60-year-old, diversified agricultural and transportation company that’s headquartered in west Michigan. ZFS comprises four separate divisions: Zeeland Farm Services Inc., Zeeland Farm Soya Inc., Zeeland Freight Services Inc. and Zeeland Food Services Inc.

ZFS’ products and services include soybean processing, feed ingredients, grain marketing, a full-service elevator, ZFSelect® soybean seeds, Zoye® soybean oils, transportation and maintenance.

Another affiliate of ZFS, Nebraska Corn Processing LLC (NCP), owns and operates a facility that processes grain into ethanol and distiller’s grain in southwest Nebraska.

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