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Ethanol group faces 2-day, $2 million deadline

July 18, 2006|by DON AINES

CHAMBERSBURG, Pa. - Penn-Mar Ethanol has until the close of business Thursday to come up with more than $2 million or a 55-acre parcel in the Cumberland Valley Business Park on which the group planned to build an ethanol plant will be placed back on the market.

On Monday, the board of directors of the Letterkenny Industrial Development Authority, which runs the business park, took no action on a request by Penn-Mar to extend the closing date for up to a year, LIDA Executive Director John Van Horn said. The board went into executive session to discuss the request and upon reconvening, no motion was made to extend the closing date, he said.

Van Horn would not comment on what was discussed during the executive session.

The property has been off the market since Penn-Mar and LIDA entered into a sales agreement with Penn-Mar in February 2005.

Scott Welsh, the project manager for Penn-Mar, said the partnership requested a six-month extension on the closing date to Jan. 19, 2007, in exchange for $30,000. The letter to LIDA included a request for an additional extension, if necessary, for another $30,000 to extend the closing date to July 2007.

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The request "is primarily because of the court case still under consideration in (Pennsylvania) Commonwealth Court over the zoning issue," Welsh said. That issue has to be resolved before the York, Pa. -based partnership can get financing to purchase the land, he said.

"We're ready to make additional deposits to allow us time to get through this issue," Welsh said. "We're in the middle of a process that has gotten bogged down in court."

Welsh said he could not comment on what Penn-Mar will do before Thursday.

"We are extremely pleased the LIDA board has been listening to us and reading the materials we have given them," said DeEtta Antoun, director of Citizens for a Quality Environment, which has opposed the Penn-Mar plan since it was announced 18 months ago. "I'm glad they realize an ethanol distillery ... may not be a good investment in our community."

"I think we really did give them an overwhelming amount of evidence that Penn-Mar wasn't going to come up with the money," Antoun said.

When the agreement of sale was announced last year, Penn-Mar Ethanol officials said it planned to build an $80 million facility to produce up to 60 million gallons of ethanol from corn as a fuel additive, along with byproducts of distillers grain for animal feed and carbon dioxide. The plant would be the first ethanol plant in Pennsylvania.

The Greene Township Zoning Hearing Board last year ruled the ethanol plant was a permitted use in an industrial zone and granted a variance on township height limits for structures that would be part of the plant.

That zoning board decision was appealed to the Court of Common Pleas in Franklin County by Citizens for a Quality Environment and several individuals. Last fall, Judge Richard J. Walsh ruled that the zoning board erred in granting the variance and deciding that an ethanol distillery is a permitted use.

Penn-Mar Ethanol appealed Walsh's decision to Commonwealth Court.

Van Horn said Penn-Mar has paid LIDA $60,000 that is nonrefundable to keep the land off the market, including $20,000 for a previous extension.

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