Keene aquaculture project never breaks ground
KEENE, N.H. — A proposed project similar to a failed venture in Brattleboro, Vt., didn't fare any better in the Granite State.
In a press release issued Jan. 17, Don McCormick, president and founder of the Local Farms Project LLC, announced that the company would withdraw its plans to develop the Keene Energy and Agriculture Project.
"After careful planning and consideration, the Local Farms Project and the City have been unable to meet these goals and have jointly decided to end plans to construct KEAP," McCormick stated, adding "over years of collaboration we have made great friends at the city of Keene and are grateful to city staff and leadership for the support and vision that they provided to us and to this innovative approach to sustainable local food and energy security."
Keene's transfer station, on Route 12 just north of town, was to be the location of a fish- and lettuce-growing operation and a 350kw generator connected to the grid.
"The real heart of the story," McCormick told the Reformer, "is the site was not viable."
At the time the project was announced, during a sweltering day in July at the landfill, Dean Lizotte, the CFO of KEAP had secured $2.5 million to construct a facility to grow 500,000 pounds of lettuce a year. Lizotte said KEAP has several investors for the project, including the New Hampshire Community Loan Fund, and that the Bank of New Hampshire is also supplying funding. He also said KEAP is the sub-recipient of the $500,000 Climate Showcase Communities Grant, which was awarded to Keene. The city of Keene also committed $225,000 in improvements to the site, which is on a hill overlooking the transfer station.
KEAP also received $480,000 in low-interest loans from a Community Development Block Grant administered by the Monadnock Economic Development Corporation. As repayment is made, $250,000 of the loaned amount will be routed into a revolving loan fund and investment program seeded with $250,000 donated by the Entergy Charitable Foundation.
"The proposal in Brattleboro was much different," said Lizotte at the time. "It was to be a model and training facility. And the investor group for KEAP is much different, too."
In Brattleboro, McCormick, who was president of the now-bankrupt Carbon Harvest, attempted a similar venture at the closed landfill on Ferry Road, receiving $40,000 from the town's revolving loan fund. When the project failed, Carbon Harvest paid back $26,000 of the total. The town of Brattleboro took a hit on the remaining $14,000, said Patrick Moreland, Brattleboro's assistant town manager, in July 2015. "We are pretty far down on Carbon Harvest's list of creditors. We did have a personal guarantee from McCormick, and reason to expect it would be honored, but, unfortunately, we lost out."
Carbon Harvest also took out $810,000 in loans from Vermont Economic Development Authority, which held the first lien on the company's equipment. The aquaculture/agriculture project at Windham Solid Waste Management District failed, said McCormick, after the major investor became the subject of a U.S. Securities and Exchange Commission investigation into insider trading. Much of its equipment — $270,000 worth — was sold off in the bankruptcy proceedings to a Portsmouth company.
Keene officials were aware of the failure in Brattleboro, but still went ahead with the project at the city's landfill.
McCormick told the Sentinel on Jan. 18 that cost, engineering and time were the major factors that led to the Keene project not moving forward. "We could have potentially solved the rising costs, but combining it with the time pressure made it difficult," he said. The project was required to break ground by the spring. "Our engineering was resolved, but it was necessary to engineer new infrastructure for the city, and that was taking considerable more time."
KEAP's proposal was to construct a 40,000-square-foot greenhouse with a 15,000-square-foot processing facility, bringing 25 "living wage jobs" to the Keene area.
Medard Kopczynski, Keene's city manager, said the city is scheduling a meeting with McCormick to create a settlement agreement. He said that while he had no other comment on the matter, "To my knowledge everything is OK."
Marty Cohn, a spokesman for Entergy Vermont Yankee, told the Reformer that Entergy's seed money was untouched. "The money will stay there. It's up to their discretion for disbursement."
Bob Elliot, MEDC's financial officer, told the Reformer that no money had been released to KEAP from his organization. A spokesman for the New Hampshire Community Loan Fund was unavailable for comment.
McCormick told the Reformer that he was quite disappointed that the venture failed.
"But at the same time, it is part of entrepreneurship to make decisions based on progress and risk."
While some of the private investors lost some money on the deal, McCormick said they told him they were happy with his attempts to make it a go and would like to be involved if he decides to push ahead somewhere else.
McCormick said $36,000 of the EPA grant had been spent, but he plans on repaying that amount.
"We've learned a lot. We've developed a model and a business plan and we have learned some lessons. There are challenges and it is a struggle to develop an innovate project in the existing food/energy climate."
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