Beatrice Biodiesel: No bites from potential buyers By Art Hovey/Lee Enterprises Monday, Apr 27, 2009 - 09:44:38 am CDT
It was designed as a $50 million investment capable of producing 50 million gallons of soydiesel fuel a year.
But two years after the first shovel of dirt was turned -- and months after the last of hundreds of construction workers walked away -- the Beatrice Biodiesel plant might remind you more of a glorious mansion where nobody ever lived.
Shiny metal tanks and tubing glisten in the sun and every obvious detail of operational readiness is in place. That includes freshly painted signs that mark the handicapped parking stalls in front of the business office and the 10 mph speed limit posted for the trucks that never arrived.
A red pickup and a security guard who declined to give his name are the only signs of human presence at what once appeared likely to become Nebraska’s first major foray into the biodiesel business.
You can bet that Lincoln attorney Rick Lange, trustee for the company’s Chapter 7 bankruptcy, would like to be able to announce that Beatrice’s most expensive business property has a prospective buyer.
As of late April, he can’t.
“When we have a proposed sale, it will be filed with the court,” Lange said, “and it will be public record.”
Should seven months of silence on that point be taken as a sign of lack of interest?
“I wouldn’t reach that conclusion,” he said.
Reaching any conclusions at all about where the biodiesel industry is headed isn’t easy.
The wealth of possibilities for mixing soybean oil and diesel fuel for use by highway trucks, buses, farm tractors and other equipment is in a poverty-stricken phase.
The National Biodiesel Board has 176 entries on its list of commercial-scale plants, but spokesman Mike Frohlich estimated at least a third of them are idle. In Nebraska, regularly the nation’s fifth most productive soybean state, only the relatively small plant at Scribner is operating.
“The biodiesel industry is certainly going through some growing pains, if you will,” Frohlich said.
Robert Byrnes, who operates his Nebraska Renewable Energy Systems consultant business from Oakland, Neb., said the souring of the ethanol economy has gotten a lot more attention.
“When big brother took a hit,” Byrnes said, “little brother took a hit. And nobody seemed to notice.”
He sees that disparity even though the economic challenges are much the same: Rising input costs, falling prices for the finished product, tight credit.
“You don’t need to be a math major to figure out that doesn’t work,” he said.
A checklist in the bankruptcy file suggests it will take a long time to sort out the demise of Beatrice Biodiesel, which has both Canadian and Australian ownership connections.
The boxes checked put the estimated number of creditors between 100 and 199 and estimated liabilities between $10 million and $50 million.
Many of the businesses still owed money are based in Beatrice. But Rita Hydo of Lammel Plumbing and Deanne Caspers-Moon of Caspers Construction sound patient and even optimistic about where things go from here.
“I don’t think they started out thinking they were going to fleece a bunch of people in this little town,” Hydo said.
Despite $40,000 in unpaid Lammel bills, “they had every intention of doing something wonderful for the community,” she said. “And it would have been.”
As project manager on buildings at the construction site, Caspers-Moon spent a lot of time in the northwest industrial park. The $60,000 unpaid Caspers tab could have been a lot bigger, she said.
“We got paid almost everything. I think we were fortunate that the buildings were up fairly early in the construction process -- before they ran out of money.”
All things considered, “we had a great experience working there.”
The city of Beatrice is listed as a holder of one of the 20 largest unsecured claims against the bankrupt company.
But City Attorney Tobias Tempelmeyer said there is no financial risk attached to the city’s role in providing tax increment financing.
Meanwhile, potential buyers come and go, Tempelmeyer said.
“We’d love to see it happen, but as far as a timeline, we don’t know.”
Rita Hydo sounded more excited than perturbed about a $50 million asset gathering dust.
“I don’t know if it will be a biodiesel plant or if it can be something else,” she said. “But I think somewhere along the line it will be priced so attractively that somebody will come in and do something with that.”
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