We all want a better St. Joseph. Economic growth is a prominent and genuine initiative on the minds of many within the community. It is also on the minds of those advancing this initiative, and is a major motivation to many that are opposing this project.
There are many important questions about this that have yet to be answered. Questions that others have brought to our attention. Questions that Tuning Fork has for those involved in this project. Questions that are still left unanswered.
Tuning Fork doesn’t have a strong opinion on how the City Council should vote in this matter. We have simply come across a series of facts and questions that raise flags. In a city that takes every step possible to ensure transparency within its political infrastructure, this initiative feels oddly out of place due to it’s lack of information.
Also, Tuning Fork has been made aware of an effort to come up with a better location with the rail access for this project that would be a win for all involved.
We’re reporting on this as it unfolds, and we encourage you to follow along with us as we present new facts and the questions that our city deserves to have answered.
The Facts We Know So Far
The St. Joseph City Council meets 7 p.m. Monday, September 24, 2018 in regular session to consider numerous agenda items including a Bill for Passage (#180-18) vacating Monterey Street between 6th through 8th streets through and including the Chicago Burlington Northern Railroad (Burlington Northern Santa Fe) tracks, or the successor owner of said railroad tracks, and closing the existing at-grade crossing across the same. This Bill is prompted by a proposed biodiesel refinery project at 1201 S. 6th Street. Tuning Fork opposes this proposal in its entirety – and we’re not alone.
Planning Commission Endorsement Despite Red Flags & Strong Opposition
The St. Joseph Planning Commission unanimously endorsed this proposal at their August 23 meeting, even though city staff, in a Planning Commission Staff Report recommended “DENIAL of the request” for two principal reasons (as quoted in the report):
- The proposed street vacation is believed to be detrimental to adjacent properties, uses, and surrounding neighborhood; and
- The street vacation would have a significant impact on the street network and emergency response times.
Others in opposition at the planning commission meeting included representatives of the St. Joseph Fire Department, the St. Joseph Police Department, the city’s Department of Public Works and Transportation – plus the St. Joseph Traffic Commission previously rejected the proposal unanimously. The St. Joseph Ecumenical Eco-Justice Committee (EEJ) announced its opposition on September 11, with EEJ member Diane Waddell writing, “There are many reasons for concern including the possibility of explosion of the proposed biodiesel refinery and the fact that train cars carrying biodiesel have 1.5 times the flammability of cars carrying crude oil. We note the relative proximity of Head Start, Carden Park, Patee House, Patee Hall and the Pony Express Museum, Judah House, the Haven, and other public sites to the proposed biodiesel refinery site.”
Reason for Concern
We find the concerns expressed by the planning staff, public safety and transportation groups and the EEJ to be valid:
- The project applicant, Geoffrey Hirson/St. Joseph Renewable Fuels, is long on promises and short on demonstrated or quantifiable performance.
- If this project has the endorsement of the St. Joseph Chamber of Commerce (the organization receives city funding to undertake economic development tasks on behalf of the City), why hasn’t this project provided a more visible and transparent presentation to the community,
including a business plan and thorough explanation of the project’s financing, well in advance of an October 30 deadline? Why are there threats to take the project to one of four other cities – one of which is a body of water in Louisiana and another an undisclosed location in Southern California?
- We find no evidence to date that Mr. Hirson’s various companies and previous project proposals elsewhere in the US have resulted in an on-going operation – and at least one ended in TWO Federal lawsuits targeted at the City of Terre Haute, IN.
1.) Decision – Highland TH, LLC v. City of Terre Haute, US District Court, Southern District Indiana
2.) Complaint – OVERSEAS LEASE GROUP, INC. v. PLOCHER CONSTRUCTION COMPANY, INC. et al
- Finally, there is the issue of committing to a major infrastructure build and street closure (with all the resulting transportation complications and variables) in an area currently under study and review through the I-229 overpass issue and the recently-funded Riverfront Development study.
What do we know about Geoffrey Hirson?
Before we get to the questions, here is was we know regarding Geoffrey Hirson’s latest venture:
The proposed $250 million renewable biodiesel fuel project, and the request to vacate portions of Monterey Street to accommodate new BNSF rail infrastructure, has been made by Geoffrey Hirson of Orange County, California. Mr. Hirson’s Linkedin profile indicates he has real estate development experience as president of G & J Investment Company from 1996 to 2007; Coal Combustion to Steam Energy System experience as president of USA Green Energy Group, LLC since 2009; and biofuel manufacturing experience as president of Powerdyne, Inc. since 2011. Mr. Hirson’s profile states, “Powerdyne has also developed and patented a renewable drop in diesel and jet fuel process using its own designed gasification and a Fischer Tropsch gas liquification process.”
The United States Department of Energy (DOE) notes that Fischer-Tropsch Synthesis is a process dating to the 1920s and named for German inventors, Franz Fischer and Hans Tropsch. The process was deployed to yield hydrocarbon fuels critical to the Nazi war effort during WWII and both hydrocarbon fuel and chemical requirements of Apartheid-era South Africa. DOE also states the process “in the United States would probably only successfully emerge in the case of concurrent and sustained high oil prices and high natural gas prices.”
Mr. Hirson’s EB-5 Investments Profile
Mr. Hirson’s EB-5 Investments profile enumerates his additional experience: “successes have been in a 600 unit trucking company, a foreign auto sales and service company franchisee with seven locations in Southern California and more recently in the power industry in the US and abroad. This included technologies in tar sands and development in the solar power industry. In a joint venture with the Navajo Nation, Geoff got the necessary approvals to build a 100MW concentrated solar farm with extensions to take it to 5000MW.” For some reason, perhaps Mr. Hirson can explain, the trucking company, the auto sales and service company and the company in the joint venture with the Navajo Nation are un-named.
During the August 23 Planning Commission meeting Mr. Hirson, represented himself, and through his application, as the “owner and developer of St. Joseph Renewable Fuels (82 Yorktown, New Port Beach, CA) … So, the application tonight is for St. Joseph Renewable Fuels,” and explained that his company produces renewable diesel and renewable jet fuel at a rate of 4,500 barrels each day. Mr. Hirson stated his project plans for a 24 – 26 month construction period with payment and performance bonding at a guaranteed price subject to an EPC, (EPC appears to be an energy efficiency rating in Great Britain applying to homes and buildings.) and said, “we have this big loan.” Mr. Hirson also cited NAES as an “operations company they bring in,” and states they are “investment grade. The idea of this whole project for us, to build something of this size, is to have everybody who is involved is investment grade So there’s very little chance of anything failing on a project of this size.”
Mr. Hirson told the planning commission that the necessity for the street vacation is to accommodate a unit train of roughly 100 cars approximately twice each month with a round-trip schedule of twelve days to make the shipment to California economically feasible. Mr. Hirson also said his capex and opex (capital and operating expenditures) were fully financed at $250 million and “ready to go;” the only roadblock being the transportation issue. Mr. Hirson stated, “our technology is Chevron technology.” Mr Hirson went on to claim that the fuel this plant will produce, in the case of diesel, can go directly into a vehicle, rather than be blended with petroleum products, and further claimed that they are in negotiations to provide jet fuel to airlines without blending. Mr. Hirson also claimed that “Chevron will take as much fuel as we can manufacture.”
Employment Impact Claims
As for employment impact, Mr. Hirson claimed the plant would create 55 – 60 jobs at an average salary of $65,000/yr. Mr. Hirson promised an all-new facility on land purchased from Performance Biofuels – Steve Gage, plus a long-term lease with “Burlington Rail.”
Mr. Hirson told the planning commissioners the feedstock will arrive primarily by rail, but also by barge at the nearby port; that this is a two-year planning project involving other national locations – which he later claimed were to be located Illinois, Louisiana and California, but that St. Joseph is the first because of the small existing biodiesel plant that will provide work to do while the new plant is being constructed. Finally, Mr. Hirson claimed his contract with Chevron had expired, but he was able to get it extended through October.
Important Questions (Chevron)
Tuning Fork asked Chevron Corporation to clarify Mr. Hirson’s various claims about his contracts and technology connections with their firm. Braden Reddall, Senior External Affairs Advisor for Downstream, Midstream and Corporate Affairs replied via email, “We appreciate you reaching out. I’ve looked into this and we are not in a position to comment at this point.”
Important Questions (BNSF)
Curiously, while Mr. Hirson was the only employee of his firm to present to the planning commission, three representatives from BNSF addressed the commissioners in support of the project. One representative presented information about infrastructure design, periodic street closure notification and duration as rail cars were being moved. He also alluded to financial incentives for the city in exchange for the road closure. Another representative explained that BNSF wants this project and is willing to do whatever it can to make it work. Finally, the other representative clarified for the commissioners that once Monterrey Street is vacated and the BNSF infrastructure is in place, there is no turning back regardless of whether the new biodiesel plant is built, and Monterrey Street could not be reopened.
Andy Williams, Director of Public Affairs for BNSF, is looking into Tuning Fork’s questions regarding the railroad’s formal connection to this proposal:
“OK. Let me reach out to those involved. I know and little about this project. We operate on 32,500 miles of track in 28 states and three Canadian provinces. Lots going on.”
Hefty Promises With Highly Questionable Track Record
Clearly Mr. Hirson, and his supporters, have made some big promises and successfully enticed the favor of the planning commission with visions of a $250 Million industrial plant and 65 new jobs. The track record elsewhere for one of Mr. Hirson’s proposals does not look so good.
As reported in the Terre Haute Tribune Star in 2015, for example, Mr. Hirson told Terre Haute, IN. his “plant will produce between 100 and 150 permanent jobs paying from $30 per hour up to $200 per hour. He also said the plant would take 24 months to build and would employ 1,000 workers in construction. As for the $3 million Mayor Duke Bennett has said Powerdyne will give Terre Haute as an upfront payment, Hirson called it a ‘concession’ payment and said that it would be given to the city when the plant ‘breaks ground.’ Hirson stated Powerdyne has a ‘pilot plant’ for two different kinds of technology but added: ‘We’re a private company. We hold our technology close to our chest.’ Hirson said his company, with the backing of a pension fund, has $1 billion at its disposal. After the meeting, he declined to identify the pension fund stating Powerdyne is a privately held company.”
For more information, read: Tribstar.com
Regarding Mr. Hirson’s proposal to the City of Terre Haute, the Tribune Star also reported , “Two groups of Rose-Hulman Institute of Technology engineering students who studied the proposed Powerdyne biodiesel project have come to the same conclusion: If the city moves forward with its sludge-to-diesel plan, it stands to lose – at minimum – hundreds of millions of dollars over the next 20 years. That loss could reach, one team’s report states, nearly $2 billion.”
Previous Endeavors Result in Lawsuits
The Terre Haute plant was never built. Tuning Fork can find no evidence of a “pilot plant.” The City of Terre Haute received no payments, and ultimately had to defend itself in at least two Federal lawsuits.
Though not joined as a defendant, Powerdyne (a company Mr. Hirson has claimed presidency of) is named as a “non-party” in the current Federal litigation. In part 22 of John H. Daniels, Esq.’s pleadings filed September 7, 2017, on behalf of his clients Overseas Lease Group, et al. v. Plocher Construction Company, Inc., Scott Plocher, The City of Terre Haute, et al. Counsellor Daniels refers to Mr. Hirson’s company,
“Similarly, non-party Powerdyne at the time it executed the Underlying July 2014 Agreement through its President, Geoffrey Hirson (“Hirson”), was a shell entity with no business, no assets, few, if any employees, and no capacity or reasonable expectation of any capacity to fulfill its putative commitments under the contract. In effect, Powerdyne like Terre Haute and the municipal agencies was a participant in a contract and transaction which the parties knew was a sham at the time they created it.”
Tuning Fork visited with Paul Batista, Esq., the lead plaintiffs attorney in the lawsuit about the statements made pertaining to Geoffrey Hirson and Powerdyne in the complaint. Counselor Batista told us these statements reflected the direct experience of his client, Mr. Badcock with Mr. Hirson and Powerdyne.
Counselor Batista noted that Mr. Badcock had been a client of some 35 years and in that time Mr. Badcock had always provided accurate information — “beyond reproach.” “To say he (Badcock) would be a fan of Mr. Hirson would be a mistake, the counselor added.
Counselor Batista also suggested that if the municipality (St. Joseph) or Tuning Fork’s readers had concerns about Mr. Hirson’s project, then due diligence should be undertaken. “He (Mr. Hirson) could be T. Boone Pickens; could be Joe on the street,” Counselor Batista added.
Counselor Batista said that if Mr. Hirson was aggrieved by the statements made in the Federal complaint, he could hire a lawyer to ask that they be stricken, but told Tuning Fork that hasn’t happened. We expressed curiosity as to why Mr. Hirson had not been joined among defendants in the suit. Counselor Batista remarked, “You don’t sue someone who doesn’t have a dime, even if they may be culpable.”
Tuning Fork has been unsuccessful in identifying or locating any operating plant associated with Powerdyne, Inc., Powerdyne Renewable Fuels, USA Green Energy Group, LLC, or any other firms Mr. Hirson claims presidency of or association with. Regarding the four additional “Project Locations Under Development” presented by Mr. Hirson to the St. Joseph Planning Commission, little substance regarding the operational viability of these sites exist.
Mayor Mark Bolander of Newton, IL. told Tuning Fork that while “several conversations” have taken place between Newton and Mr. Hirson, his office does not have an understanding of Hirson’s capabilities.
Bill Gruen, City Manager of Salem, IL told Tuning Fork that while conversations with Mr. Hirson have occurred over the past two years, and his city has been asked for incentives, no proposals have been made by Mr. Hirson.
Tuning Fork attempted to reach out to officials in Crystal Lake, Louisiana, but discovered Crystal Lake was, in fact, a lake in Washington Parish. Our call to Parish President Richard “Ned” Thomas has yet to be returned. Tuning Fork confesses Mr. Hirson’s “Southern California” location under development was just too vague – one can’t go bananas over these things.
While Tuning Fork is still curious about this whole economic development process, this newspaper urges the St. Joseph City Council to ask questions of Mr. Hirson and his advocates:
- Can Mr. Hirson clarify Chevron’s role in his technology deployment.
- Can Mr. Hirson clarify his financing? Is the $1 billion backing via an undisclosed pension fund for the Terre Haute project available and in play for the St. Joseph project?
- Can Mr. Hirson show us the contracts associated with this project?
- Is this project to be managed by locally-sourced talent or EB-5 entrepreneurs?
- Where is the location of the “pilot plant for two different kinds of technology” as presented before the Terre Haute, IN. City Council February 12, 2015?
- Can Mr. Hirson explain who negotiated and vetted this proposal on behalf of the City?
More to Read on This Issue
For the full picture, check out our other stories as we try to uncover and piece together what’s going on city’s “Economic Development Team“.