An ethanol production facility was recently sold to a Nebraska firm. Map via Google.
The musical-chairs ownership of a once highly touted ethanol production facility in Hopewell that was sold last month has left a trail of unpaid bills in its wake.
The 55-acre plant at 701 S. Sixth Ave., built in 2010 to convert corn and grains into ethanol as a fuel additive, is now on its third owner in five years after being purchased in late October by a Nebraska firm for $18.25 million.
Almost immediately after the sale, the previous operator and affiliate companies were sued at least three times in Henrico County for combined outstanding debts of nearly $2 million.
The cases were filed against Vireol Bio Energy LLC by Dominion Virginia Power, Southern Construction Utilities and West End Machine & Welding.
The most detailed of the three cases was Dominion’s 108-page suit, which claims it is owed $1.8 million from Vireol for electrical service and seeks to unwind the tangle of LLCs tied to the plant.
The power company also went to lengths to shine a light on the government financial incentives that Vireol was showered with in 2014 and alleges that it may still be trying to collect on some of that money, despite no longer operating the Hopewell plant.
Dominion, in its attempt to discern the status of the Hopewell site and collect on the unpaid power bills, states in its lawsuit that it made two surprise visits the Vireol facility last month. The company said it confronted Peter McGenity, Vireol’s CEO at the time, on Oct. 21 and he allegedly said Vireol “would not be dissolved until the first quarter of 2016 in order to receive an additional government grant of approximately $250,000.”
The Hopewell facility was built in 2010 as the Osage Bio Energy Plant. Court records and reports from the time say that more than $200 million was spent to construct the plant, only to see it sit largely idle for the next two years.
Then in 2013, Future Fuels bought the facility for around $13 million, leasing the plant to Vireol. The company began operations there in early 2014 to much fanfare, including announcements by Gov. Terry McAuliffe’s office celebrating the company’s plan to invest $26.2 million and add 70 jobs at the site. That plan was fueled by an incentive package for Vireol that included state and local grants and tax breaks. Among those was a $250,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund, to be distributed to the company through the city of Hopewell.
Little more than a year later, Vireol announced in late August that it would halt production in Hopewell and seek a buyer for the property. Vireol operated out of the facility until Oct. 23, three days before it was purchased by Green Plains Inc., out of Omaha, Nebraska.
It’s unclear how much, if any, of the government incentives were actually realized by Vireol. The status of the company, much of which seems to be based in the United Kingdom, is unknown. Email inquiries would not go through to the company.
McGenity, when reached by phone this week, said he was terminated by the company upon the facility’s sale.
The Hopewell Treasurer’s Office was closed Wednesday due to the holiday and did not respond to requests for comments. The governor’s office also did not respond by press time.
The property, which also holds the address 200 S. Main St., was most recently assessed by the city at $21.83 million.
Dominion in its suit also names Vireol Bio Energy Holdings and Future Fuels No. 1 LLP as defendants. Citing investor prospectuses distributed for Vireol last year, Dominion’s case shows that Future Fuels owned the ethanol plant in Hopewell and leased it to Vireol Bio Energy, which is owned by Vireol Bio Energy Holdings.
Dominion, represented by Stephen Baril and Gray Broughton of Kaplan Voekler Cunningham & Frank, argues that the various companies are all ultimately connected and therefore all responsible for the alleged debts.
Dominion Resources’ Chet Wade said the company had no comment beyond what’s stated in the lawsuit.
West End Machine & Welding, which also ties Vireol to Future Fuels, says in its lawsuit that it did work on the facility on two occasions and claims it is owed nearly $47,000. The company is represented by attorneys Andrea Gould and Andrew Mauck of Richmond law firm Mauck & Brooke. They declined to comment.
Southern Construction Utilities, based in Prince George, says in its suit it was contracted to do sewer work on the Vireol facility this year and claims is owed around $72,000. The company is represented by ThompsonMcMullan attorneys Christopher Malone and Neil Talegaonkar.
Attorneys in the case either declined to comment or did not respond by press time.
Vireol’s troubles aside, the new owner of the Hopewell plant, Green Plains, has big plans.
Company spokesman Jim Stark said it already has a group on the ground in Hopewell working to get the plant back up and running by the end of the year. He said about 42 former Vireol employees will likely be rehired to work the plant for Green Plains.
Stark would not comment on Vireol or the circumstances that led it to halt its operations.
Green Plains will look to invest $6 million to $7 million to upgrade the facility and make it more efficient.
The plant has the capacity to produce 60 million gallons of ethanol annually using 21.5 million bushels of corn, Stark said. The processing of corn for ethanol also produces what’s called dried distiller grains, which are used as livestock feed.
“Our goal is to acquire assets and do what we think we can to those properties to make them more profitable,” Stark said.
The facility is Green Plains’ 13th ethanol producing plant. The publicly traded company produces about $3 billion in annual revenue. Nine of Green Plains’ plants were built by previous owners.
“We have a fairly deep knowledge of how to acquire a plant and make improvements,” Stark said.
Stark said in addition to producing ethanol, the facility may also be used as a distribution point for Green Plains’ other plants, given its location near the East Coast.
Stark said the company is confident in its business model and is encouraged by low gas prices in recent months.
“Low gas prices are good because you’ve seen gas demand be the highest it’s been since 2007,” he said. “Every gallon of gas that’s sold has 10 percent ethanol in it, so if gas (consumption) is up, ethanol is up.”
An ethanol production facility was recently sold to a Nebraska firm. Map via Google.
The musical-chairs ownership of a once highly touted ethanol production facility in Hopewell that was sold last month has left a trail of unpaid bills in its wake.
The 55-acre plant at 701 S. Sixth Ave., built in 2010 to convert corn and grains into ethanol as a fuel additive, is now on its third owner in five years after being purchased in late October by a Nebraska firm for $18.25 million.
Almost immediately after the sale, the previous operator and affiliate companies were sued at least three times in Henrico County for combined outstanding debts of nearly $2 million.
The cases were filed against Vireol Bio Energy LLC by Dominion Virginia Power, Southern Construction Utilities and West End Machine & Welding.
The most detailed of the three cases was Dominion’s 108-page suit, which claims it is owed $1.8 million from Vireol for electrical service and seeks to unwind the tangle of LLCs tied to the plant.
The power company also went to lengths to shine a light on the government financial incentives that Vireol was showered with in 2014 and alleges that it may still be trying to collect on some of that money, despite no longer operating the Hopewell plant.
Dominion, in its attempt to discern the status of the Hopewell site and collect on the unpaid power bills, states in its lawsuit that it made two surprise visits the Vireol facility last month. The company said it confronted Peter McGenity, Vireol’s CEO at the time, on Oct. 21 and he allegedly said Vireol “would not be dissolved until the first quarter of 2016 in order to receive an additional government grant of approximately $250,000.”
The Hopewell facility was built in 2010 as the Osage Bio Energy Plant. Court records and reports from the time say that more than $200 million was spent to construct the plant, only to see it sit largely idle for the next two years.
Then in 2013, Future Fuels bought the facility for around $13 million, leasing the plant to Vireol. The company began operations there in early 2014 to much fanfare, including announcements by Gov. Terry McAuliffe’s office celebrating the company’s plan to invest $26.2 million and add 70 jobs at the site. That plan was fueled by an incentive package for Vireol that included state and local grants and tax breaks. Among those was a $250,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund, to be distributed to the company through the city of Hopewell.
Little more than a year later, Vireol announced in late August that it would halt production in Hopewell and seek a buyer for the property. Vireol operated out of the facility until Oct. 23, three days before it was purchased by Green Plains Inc., out of Omaha, Nebraska.
It’s unclear how much, if any, of the government incentives were actually realized by Vireol. The status of the company, much of which seems to be based in the United Kingdom, is unknown. Email inquiries would not go through to the company.
McGenity, when reached by phone this week, said he was terminated by the company upon the facility’s sale.
The Hopewell Treasurer’s Office was closed Wednesday due to the holiday and did not respond to requests for comments. The governor’s office also did not respond by press time.
The property, which also holds the address 200 S. Main St., was most recently assessed by the city at $21.83 million.
Dominion in its suit also names Vireol Bio Energy Holdings and Future Fuels No. 1 LLP as defendants. Citing investor prospectuses distributed for Vireol last year, Dominion’s case shows that Future Fuels owned the ethanol plant in Hopewell and leased it to Vireol Bio Energy, which is owned by Vireol Bio Energy Holdings.
Dominion, represented by Stephen Baril and Gray Broughton of Kaplan Voekler Cunningham & Frank, argues that the various companies are all ultimately connected and therefore all responsible for the alleged debts.
Dominion Resources’ Chet Wade said the company had no comment beyond what’s stated in the lawsuit.
West End Machine & Welding, which also ties Vireol to Future Fuels, says in its lawsuit that it did work on the facility on two occasions and claims it is owed nearly $47,000. The company is represented by attorneys Andrea Gould and Andrew Mauck of Richmond law firm Mauck & Brooke. They declined to comment.
Southern Construction Utilities, based in Prince George, says in its suit it was contracted to do sewer work on the Vireol facility this year and claims is owed around $72,000. The company is represented by ThompsonMcMullan attorneys Christopher Malone and Neil Talegaonkar.
Attorneys in the case either declined to comment or did not respond by press time.
Vireol’s troubles aside, the new owner of the Hopewell plant, Green Plains, has big plans.
Company spokesman Jim Stark said it already has a group on the ground in Hopewell working to get the plant back up and running by the end of the year. He said about 42 former Vireol employees will likely be rehired to work the plant for Green Plains.
Stark would not comment on Vireol or the circumstances that led it to halt its operations.
Green Plains will look to invest $6 million to $7 million to upgrade the facility and make it more efficient.
The plant has the capacity to produce 60 million gallons of ethanol annually using 21.5 million bushels of corn, Stark said. The processing of corn for ethanol also produces what’s called dried distiller grains, which are used as livestock feed.
“Our goal is to acquire assets and do what we think we can to those properties to make them more profitable,” Stark said.
The facility is Green Plains’ 13th ethanol producing plant. The publicly traded company produces about $3 billion in annual revenue. Nine of Green Plains’ plants were built by previous owners.
“We have a fairly deep knowledge of how to acquire a plant and make improvements,” Stark said.
Stark said in addition to producing ethanol, the facility may also be used as a distribution point for Green Plains’ other plants, given its location near the East Coast.
Stark said the company is confident in its business model and is encouraged by low gas prices in recent months.
“Low gas prices are good because you’ve seen gas demand be the highest it’s been since 2007,” he said. “Every gallon of gas that’s sold has 10 percent ethanol in it, so if gas (consumption) is up, ethanol is up.”